Estate duty assessments require proper notice, identified accountable persons, and independent valuation enquiry before liability is fixed.

In estate duty proceedings, assessment requires identification of all accountable persons and legal representatives, effective service of notice, and a fair hearing before liability is fixed. Where the record does not clearly establish who the accountable persons are, proceedings suffer from a procedural defect and cannot be safely sustained. The assessing authority must also independently ascertain the correct market value and underlying facts, rather than relying mechanically on the return. If the factual foundation and valuation enquiry are incomplete, the assessment is liable to be remitted for fresh consideration after due notice and proper enquiry.

---

---

Issues: (i) Whether the assessment could be sustained without properly identifying all accountable persons and giving them an opportunity of hearing; (ii) whether the assessment, based substantially on the return and without adequate enquiry into the correct market value and factual matrix, could be upheld.

Issue (i): Whether the assessment could be sustained without properly identifying all accountable persons and giving them an opportunity of hearing.

Analysis: The record did not clearly show who all the accountable persons were, whether notices were effectively served on them, or whether they were brought on record as parties. In an intestate estate, liability under section 53(1) of the Estate Duty Act, 1953 extends to the legal heirs and accountable persons in respect of the estate passing on death. The definition of legal representative under section 2(12) of the Estate Duty Act, 1953 also required proper enquiry into the persons representing the estate. In the absence of basic facts on identification and service, the proceedings suffered from serious procedural defects and violated the requirement of fair hearing.

Conclusion: The assessment could not be sustained on this ground and required fresh consideration after notice to all concerned accountable persons and legal representatives.

Issue (ii): Whether the assessment, based substantially on the return and without adequate enquiry into the correct market value and factual matrix, could be upheld.

Analysis: The assessing authority was bound to ascertain the real factual position and the correct market value of the properties under section 36(1) of the Estate Duty Act, 1953, rather than acting mechanically on the basis of the return. The material on record was inadequate to decide the valuation dispute, and the assessment order did not reflect a sufficient inquiry into the true state of affairs. Since the foundational facts were incomplete, the appellate order sustaining the assessment could not stand.

Conclusion: The valuation-based assessment was set aside and the matter was remitted for fresh disposal in accordance with law.

Final Conclusion: The matter was remanded for a fresh assessment after due hearing of all concerned persons, and the stay request became unnecessary in view of the remand.

Ratio Decidendi: In estate duty proceedings, all accountable persons and legal representatives must be identified and afforded a fair hearing, and the assessing authority must independently determine the correct market value and factual basis before completing the assessment.

---