Act of State vesting defeated estate duty claim where no proprietary right remained at death.

Property that had vested in the sovereign by an act of State during the merger of the Rajpipla State and Sagbara with the Province of Bombay did not pass on the deceased's death for estate duty purposes. Because the later restoration in 1958 was treated as a fresh grant, the deceased had no subsisting proprietary right or property capable of disposition at death. Section 5 of the Estate Duty Act applied only to property actually passing on death, and section 6 did not assist the Revenue where no such property remained with the deceased. No estate duty was payable.

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Issues: Whether any property forming part of the Sagbara Estate or the deceased's personal properties passed on his death so as to attract estate duty under the Estate Duty Act, 1953.

Analysis: The deceased's estate and personal properties were taken over in the course of the merger of Rajpipla State and Sagbara with the Province of Bombay. The takeover was treated as an act of State resulting in vesting of the territory and the properties in the acquiring sovereign, and the subsequent restoration in 1958 was held to be only a fresh grant. On the facts, the deceased had no subsisting proprietary right or property competent to be disposed of at the time of death, and section 5 of the Estate Duty Act applied only to property actually passing on death; section 6 did not assist the Revenue because no such property remained with the deceased.

Conclusion: No property passed on the death of the deceased, and no estate duty was payable.

Ratio Decidendi: Where property has already vested in the sovereign by an act of State and no enforceable proprietary right remains with the deceased at death, nothing passes on death within the meaning of the Estate Duty Act.

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