Discretion under estate duty recovery provision upheld; refusal of agricultural lands offer was found lawful and reviewable.

Section 52(1) of the Estate Duty Act, 1953 was construed as directory, not mandatory: the Central Government may accept property offered in satisfaction of estate duty, but the discretion must be exercised reasonably, fairly, honestly and on relevant grounds, and remains subject to judicial review. Applying that standard, refusal of the offer of agricultural lands was upheld because it was supported by the land ceiling law, restrictions on alienation of agricultural land, and the absence of administrative machinery to manage such property. The Court found no jurisdictional error, mala fides, breach of natural justice or perversity, so the refusal was lawful and the writ petition failed.

---

---

Issues: (i) Whether section 52(1) of the Estate Duty Act, 1953 is mandatory or only directory and whether the Central Government has discretionary power to accept or reject an offer of property in satisfaction of estate duty; (ii) Whether the refusal to accept the petitioner's offer of agricultural lands under section 52(1) was legally justified and whether the impugned order was liable to be quashed.

Issue (i): Whether section 52(1) of the Estate Duty Act, 1953 is mandatory or only directory and whether the Central Government has discretionary power to accept or reject an offer of property in satisfaction of estate duty.

Analysis: The provision uses the word "may" in conferring power on the Central Government to accept property offered by the accountable person, while the second part of the sub-section uses "shall" in relation to delivery of possession after acceptance. Reading the provision as a whole, along with the scheme of collection and recovery under the Estate Duty Act, 1953 and the related rules, the power to accept property is intended to operate as a mode of recovery in appropriate cases and not as an invariable obligation. The Court held that the legislative purpose was to provide relief in suitable cases, but not to compel acceptance in every case. The discretion conferred is statutory and must be exercised reasonably, fairly, honestly, objectively, and in accordance with natural justice, and is not absolute or immune from judicial review.

Conclusion: Section 52(1) is directory and not mandatory. The Central Government has discretion to accept or reject an offer under the provision, but that discretion is limited by law and remains subject to judicial review.

Issue (ii): Whether the refusal to accept the petitioner's offer of agricultural lands under section 52(1) was legally justified and whether the impugned order was liable to be quashed.

Analysis: The refusal was supported by relevant considerations, including the effect of the Andhra Pradesh land ceiling law, the prohibition on alienation of agricultural lands, and the absence of administrative machinery to manage such property. The order, though laconic, was backed by the record and the counter-affidavit, which showed that the authority had applied its mind to the merits of the case. The impugned communication was treated as an order of the Government of India through the Central Board of Direct Taxes, and no jurisdictional error, mala fide action, breach of natural justice, or perversity was made out.

Conclusion: The refusal to accept the offer was justified, and the impugned order was not liable to be quashed.

Final Conclusion: The writ petition was unsuccessful because the statutory power under section 52(1) was held to be discretionary and the refusal in the present case was found to be lawful and proper.

Ratio Decidendi: Where a taxing statute confers power using permissive language in a recovery provision, the authority must exercise a real, reasonable, and reviewable discretion on relevant grounds, and an offer may be refused for valid and justifiable reasons without rendering the decision illegal.

---