Appeal against penalty cannot be rejected for non-payment when no enforceable duty survives after appellate findings.

The appeal against the penalty order was competent because the wakf property had already been found, in the assessment appeal and on reference, not to pass under section 12 and not to form part of the dutiable estate. Once that finding operated, no legally enforceable estate duty survived in relation to that property, so non-payment of the disputed duty could not be used to reject the penalty appeal. The Appellate Controller was also required to consider whether delay could be excused in light of the stay granted during the assessment proceedings.

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Issues: Whether the appeal before the Appellate Controller against the penalty order was competent and could be rejected for non-payment of the demanded estate duty.

Analysis: The wakf property had already been held in the assessment appeal, and confirmed in reference, not to pass under section 12 and not to form part of the dutiable estate. Once that finding operated, there was no legally payable duty in respect of the wakf property. In that situation, the condition requiring prior payment of duty could not defeat the appeal against the penalty order. The Appellate Controller also ought to have considered whether delay could be excused in the light of the stay order granted during the pendency of the assessment proceedings.

Conclusion: The appeal was competent. The Tribunal was not justified in holding otherwise, and the reference is answered in favour of the accountable person.

Ratio Decidendi: Where the underlying duty demand itself is displaced by an operative appellate finding, an appeal against penalty cannot be rejected on the footing that the disputed duty was not paid, because no legally enforceable duty survived to be paid.

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