Beneficial construction of estate duty payment provision: agreed immovable property offer could not be refused without reasons.

Section 52 of the Estate Duty Act was construed as a beneficial mode of payment designed to ease hardship where an accountable person had immovable property but insufficient cash. On that reading, the expression "may" was treated as mandatory in substance once the price was agreed, so the Government could not arbitrarily refuse the offer. A bare rejection without reasons was held arbitrary and invalid, and later explanations in the counter-affidavit could not cure the defect. The rejection was quashed and the authorities were directed to reconsider the offer according to law.

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Issues: (i) Whether the word "may" in section 52 of the Estate Duty Act, 1953, conferred a mere discretion on the Central Government or imposed a duty to accept immovable property offered by the accountable person in satisfaction of estate duty when price was agreed. (ii) Whether the Central Board of Direct Taxes could reject the assessee's offer by a non-speaking and unexplained order.

Issue (i): Whether the word "may" in section 52 of the Estate Duty Act, 1953, conferred a mere discretion on the Central Government or imposed a duty to accept immovable property offered by the accountable person in satisfaction of estate duty when price was agreed.

Analysis: The provision was construed in the context of the scheme for collection of estate duty and the accompanying rules governing payment. The section was introduced as a relief measure to remove hardship where the accountable person had property but insufficient cash to meet the duty. Read as an additional mode of payment, the provision was held to be intended for the benefit of the assessee. In that setting, the Government could not arbitrarily refuse the offer if the price was agreed.

Conclusion: The word "may" was held to be mandatory in substance, and the Government was obliged to accept the property in satisfaction of estate duty where the price was agreed.

Issue (ii): Whether the Central Board of Direct Taxes could reject the assessee's offer by a non-speaking and unexplained order.

Analysis: The impugned communication merely stated that the offer was not acceptable and disclosed no reason. The Court held that such an order was arbitrary on its face. The reasons later attempted to be supplied in the counter-affidavit were treated as irrelevant to sustain the original decision.

Conclusion: The rejection order was held to be patently erroneous and invalid.

Final Conclusion: The petition was allowed, the rejection of the offer was quashed, and the respondents were directed to consider the assessee's offer in accordance with law.

Ratio Decidendi: Where a statutory provision for payment of estate duty is enacted as a beneficial additional mode of discharge and the price is agreed, the expression "may" can be construed as imposing a duty on the Government to accept the property, and a refusal must be supported by reasons rather than a bare non-speaking order.

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