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Issues: (i) whether the cash muafi held by the deceased was property within the meaning of section 2(15) of the Estate Duty Act, 1953; (ii) whether the muafi was held for the deceased's life only; (iii) whether the muafi passed on the deceased's death within the meaning of section 5(1) of the Estate Duty Act, 1953.
Issue (i): whether the cash muafi held by the deceased was property within the meaning of section 2(15) of the Estate Duty Act, 1953.
Analysis: A cash grant confers a right to receive money and therefore answers the description of property. The right created in favour of the deceased was an enforceable right to annual cash payment and was not merely an expectancy.
Conclusion: The cash muafi was property within the meaning of section 2(15) of the Estate Duty Act, 1953, in favour of the Revenue on this issue.
Issue (ii): whether the muafi was held for the deceased's life only.
Analysis: The origin and history of the grant showed that it was in the nature of a jagir or maintenance allowance. Such a grant is ordinarily for the lifetime of the holder and lapses on death unless a hereditary right is proved. The record disclosed no material establishing heritability, and the continuation in favour of the successor was treated as a fresh grant rather than succession by inheritance.
Conclusion: The muafi was held only for the deceased's life and was not heritable, in favour of the Assessee on this issue.
Issue (iii): whether the muafi passed on the deceased's death within the meaning of section 5(1) of the Estate Duty Act, 1953.
Analysis: Since the grant was not heritable and lapsed on the deceased's death, nothing capable of transmission remained to pass. A property that ends by lapse does not change hands on death within the meaning of the charging provision.
Conclusion: The muafi did not pass on the deceased's death within the meaning of section 5(1) of the Estate Duty Act, 1953, in favour of the Assessee on this issue.
Final Conclusion: The reference was answered by holding that the cash muafi was property, that it was held for life only, and that it did not pass on death, with the result that no estate duty was chargeable on that grant.
Ratio Decidendi: A cash grant may be property for estate-duty purposes, but where the grant is shown to be a non-heritable life grant that lapses on death, it does not pass on death within the charging section.
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