Interest on deferred estate duty requires interest terms to be fixed when instalments are granted, not imposed later.

Interest under section 70 of the Estate Duty Act could be imposed only when recovery of estate duty was validly postponed on terms fixed at the time of the instalment concession, including the rate of interest. Where instalments were allowed without specifying interest terms, and the assessed duty was later paid in stages, there was no legal basis for a subsequent levy after the demand had been discharged. The Gauhati HC held that the later order levying interest was without jurisdiction and quashed it.

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Issues: Whether interest could be levied under section 70 of the Estate Duty Act, 1953 after the assessed estate duty had been paid in instalments, and whether the Controller could impose such interest without having specified the rate of interest at the time of granting instalments.

Analysis: Section 70(1) permits postponement of recovery of estate duty where the duty cannot be raised at once without excessive sacrifice, and it contemplates payment of interest and such other terms as the Controller thinks fit. The power to grant instalments is therefore conditional upon fixation of the interest terms at the time of permitting deferment. On the facts, the petitioner was allowed to pay in instalments, but the rate of interest was not specified when that concession was granted. The entire duty was ultimately paid, though in stages, and no valid order for postponed recovery with specified interest had been made. In such circumstances, there was no legal basis for a subsequent levy of interest after the demand stood discharged.

Conclusion: The order levying interest was without jurisdiction and was liable to be quashed.

Ratio Decidendi: Interest under section 70 can be levied only when postponement of recovery is granted on specified terms, including interest fixed at the time of the concession; once the assessed duty has been paid without any valid prior order stipulating such interest, a later levy is impermissible.

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