Question of law on deductible trust liability in estate duty computation required reference to the High Court.

The High Court treated the deductibility of an alleged trust liability in estate duty computation as a question of law, holding that the Tribunal could not finally resolve the legal character of the liability without a reference. It found that the issue whether the liability was an existing deductible liability required the Tribunal to state the case and seek the Court's opinion. The applications were allowed and the Tribunal was directed to refer the formulated question of law.

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Issues: Whether the Tribunal was justified in law in refusing to refer the question whether a liability of Rs. 7,00,000 in respect of the trust was an existing liability deductible in computing estate duty.

Analysis: The Court treated the existence and deductibility of the alleged liability as raising a question of law. It found that the matter required the Tribunal to state the case and refer the formulated question for opinion, as the legal character of the liability and its effect on estate duty computation could not be finally resolved without a reference.

Conclusion: The applications were allowed and the Tribunal was directed to refer the question of law to the Court.

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