Estate Duty penalty appeals could not be shut out for non-deposit when most of the demand had already been recovered.

Appeals against penalties under the Estate Duty Act were wrongly dismissed as not maintainable for non-deposit of the provisional demand, because a substantial part of the duty had already been recovered and the statutory scheme did not justify shutting out the matter on a technical ground in the circumstances. The earlier authorities were distinguished on their facts, and the penalties were viewed as harshly imposed in the peculiar factual setting. The dismissal was set aside and the matters were restored for fresh adjudication on merits after giving the accountable person a full opportunity of hearing.

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Issues: Whether the appeals against levy of penalties under the Estate Duty Act, 1953 could be dismissed as not maintainable for non-deposit of the provisional estate duty demand, and whether the matter required reconsideration on merits.

Analysis: The accountable person had sought recovery of the provisional demand from life insurance proceeds, and a substantial part of the estate duty had already been recovered by the departmental authorities before the appeals were dismissed. On these facts, the dismissal of the appeals as non-maintainable was not justified. The statutory scheme under section 62 contemplated consideration of delay and compliance in the appropriate circumstances, and the facts showed that the matter should not have been shut out on a technical ground when most of the demand had already reached the Government treasury. The earlier authorities relied upon by the parties were distinguished on their facts, and the penalties were held to have been imposed in a harsh manner in the peculiar circumstances of the case.

Conclusion: The dismissal of the appeals as not maintainable was set aside, and the matters were restored for fresh adjudication on merits after giving the accountable person a full opportunity of being heard.

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