Estate duty interest is not automatic; liability arises only under a valid section 70 order, not by later demand.

Interest on estate duty under section 70 of the Estate Duty Act, 1953 is not automatically chargeable. The provision applies only where the Controller is satisfied that the duty cannot be raised at once without excessive sacrifice and makes an order permitting postponement on terms. In the absence of such an order, no statutory liability to interest arises merely on assessment or by operation of law. A later demand for interest, raised after the duty had already been paid, could not be sustained, and departmental correspondence warning of interest did not create liability or estop the taxpayer against the statute.

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Issues: (i) Whether interest on estate duty became payable under section 70 of the Estate Duty Act, 1953, in the absence of an order by the Controller; (ii) Whether the revenue could levy interest after the estate duty had been paid, where payment had been made by instalments and no prior order under section 70 had been made.

Issue (i): Whether interest on estate duty became payable under section 70 of the Estate Duty Act, 1953, in the absence of an order by the Controller.

Analysis: Section 70 contemplates that interest is payable where the Controller, being satisfied that the duty cannot without excessive sacrifice be raised at once, allows payment to be postponed on such terms as he may think fit. The Court contrasted this provision with sections 6(6) and 8(9) of the Finance Act, 1894, under which interest could run by force of the statute itself. The Estate Duty Act, 1953 contains no comparable provision for automatic running of interest. Accordingly, interest under section 70 does not arise unless an order under that section is made.

Conclusion: Interest did not become payable merely on assessment or by operation of law in the absence of a section 70 order.

Issue (ii): Whether the revenue could levy interest after the estate duty had been paid, where payment had been made by instalments and no prior order under section 70 had been made.

Analysis: The order demanding interest was made only after the assessed duty had already been paid and a refund had been granted on account of excess payment. Since section 70 was the only source for charging such interest, and no prior order authorising postponement on interest had been shown, the subsequent demand could not stand. The fact that the department had sent letters warning of interest did not create liability, and there could be no estoppel against the statute.

Conclusion: The post-payment demand for interest was invalid and the recovery proceedings could not be sustained.

Final Conclusion: The demand of interest on estate duty was quashed, and the petitioner obtained complete relief against the impugned recovery.

Ratio Decidendi: Under the Estate Duty Act, 1953, interest on estate duty is not automatically chargeable; it can be levied only when an order under section 70 is made in accordance with the statutory conditions, and a demand raised after the duty has already been paid cannot be sustained.

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