1. ' NAIMUDDIN, J.-- Late Husein Ebrahim Jamal died in London on 7-6-1972. The deceased made a will on 3-6-1968 which was his last will and Testament, according to which, he bequeathed one-third of his estate in the proportions specified in the will to the petitioners.
2. ' The heirs of the leceased, respondents 3 to 10 filed Estate Duty Return in Form E.D.-1 on 30-5-1973 declaring net valuation of the estate of the deceased at Rs.53,14,027. Respondent No. 1 accordingly on 13-6-1973, made a provisional demand of Rs.23,58,199 under section 58(3) of the Estate Duty Act, 1950 (hereinafter called the Act), which was duly paid by the heirs. The heirs of the deceased on 4- 9-1973 supplied a copy of the will to respondent No.l.
3. ' Thereafter, respondent No.1 on 6-10-1973, served a notice on Abdul Latif Ebrahim Jamal, respondent No.5 under section 58-A of the Act, proposing the net valuation of the estate of the deceased at Rs.1,38,31,361, and invited objections.
4. ' It is the case of the petitioners, which is not disputed id the comments on the petition filed by respondent No.1 that a copy of the will was supplied to respondent No.1 much prior to the issuance of the notice under section 58-A of the Act but he did not issue any notice under section 58-A of the Act to the petitioners who are admittedly entitled to a part of the estate of the deceased and who, as stated in the petition were accountable parties under the Act.
5. ' Respondent No.6 claimed before respondent No.1 that under the will, one-third of the estate, left by the deceased was to be distributed among the various persons including a step-brother and two adopted daughters of the deceased and therefore, they had claimed the exclusion of the estate to that extent from liability to pay estate duty.
6. Respondent No. 1 rejecting the claim, observed as follows: "There is no provision in the Estate Duty Act regarding exclusion of any asset from the. Estate of a deceased person which was to be given to any person under a "Will" of the deceased. On the other hand it is provided in section 6 of the Estate Duty Act that "Property of which the deceased was at the time of his death competent to dispose shall be deemed to pass on his death." As would appear from the perusal of the said "Will" the deceased had reserved his right "to amend, modify and/or cancel the will at any time during his lifetime" and, therefore, the provisions of aforementioned section 6 are applicable to the whole Estate of the deceased. The claim of the Accountable persons in this regard is accordingly rejected."
7. ' Respondent No.1 thereafter, finalised the assessment without issuing any notice to the petitioners and without hearing them.
8. ' Against the assessm ent order, respondent Nos. 5 and 6 filed two separate appeals before Income-tax Appellate Tribunal, respondent No.2, which were heard and dismissed, by the order, dated 20-1-1975.
9. ' The petitioners have therefore, questioned the order, dated 2-4-1974, passed by respondent No.1 and the two orders passed on appeals, filed by respondents 5 and 6, in this Constitutional petition filed under Article 199 of the Constitution of Pakistan on 21-3-1975.
10. ' The only ground urged by Mr.Mohd Ali Sayeed, learned counsel for the petitioners in support of the petition before us is that aforesaid orders were passed without any notice to the petitioners and without hearing them.
11. 'It is an admitted fact that no notice was issued to the petitioners and the order by respondent No.1 was passed without hearing them.
12. ' However, the question of non-service of the notice of the proceedings on the petitioners was also raised in the appeals filed by respondents 5 and 6, before respondent No.2.
13. ' Dealing with this question, it was stated by the Income-tax Appellate Tribunal as follows: "The second legal objection arises from the validity of the service of notice issued and served under section 58-A of the Estate Duty Act. This objection briefly arises from the fact that after the death of the deceased, Mr.Latif Jamal, one of the Accountable persons applied to the Controller of Estate Duty for extension to submit the return etc., in respect of the estate left by the deceased. , The Deputy Controller of Estate Duty on 6-12-1972 had asked for all the accounts etc., but on 8-12-1972 he allowed the extension desired upto 31st March, 1973. The returns were however, filed by the Accountable persons on 30-5-1973. It appears from the records that on 28-3-1973 the 'Sharai' heirs comprising of the two brothers, two widows and four sisters of the deceased had filed a Power-of- Attorney in favour of M/s. Gangat & Co. and notices under section 58-A were issued on. 25-2-1973, and addressed to "Mr. Abdul Latif Jamal and others, were duly complied with by the Authorised Representative who also attended to further proceedings in the normal course. The appellant's, first leg of the objections is that the legatees of the will about whom full information was delivered to the Controller of Estate Duty also constituted the Accountable persons and these were not representated at any stage of the proceedings nor were appraised of the contents of the notice issued under section 58-A. It was stated that none of the legatees had signed the Power-of- Attorney in favour of the Authorised Representative who appeared. The second leg of the objections is that the notices were served on Mr.Latif Jamal alone although they were addressed to others as well. In these circumstances placing reliance on two reported decisions of the Tribunal cited as (1962) 5 i Taxation 112-Trib. and (1966) 14 Taxation 103-Trib. the appellants learned counsel argued that the service of the notices as well as further proceedings conducted were not valid.
14. Since no definition of the Accountable persons was available under the Act, the appellant sought to place reliance on section 53 of the Estate Duty Act to contend that the legatee was also an Account able person. As the legatees had a beneficial interest in possession and property passing, at the death of the deceased and no action could be taken under the Estate Duty Act to their exclusion. The department's case on the other hand is that returns were submitted by all the known Accountable persons and that the legatees of the will could not be treated as Accountable persons even within the meaning of section 53 of the Estate Duty Act. It is further stated that the notices were no doubt served on Mr.A.Latif Jamal but they were properly addressed to all the Accountable persons and the comliance therewith by the Authorised Representative would clearly establish the service of these notices on all. It is stated that no objection at any stage was taken by the Authorised Representative or by any other interested Accountable person including the Legatees to the proceedings that were being conducted allegedly to their exclusion. The Departmental Representative also asserts that the two cases relied upon are not on all fours with this case, because the ratio of these decisions related to the inclusion of the 'Shariat' heirs within the meaning of "Accountable Persons" which term has not been defined anywhere. Therefore the service of the notices as well as the subsequent proceedings were validly conducted after considering the factual position."
15. ' In conclusion, it was ordered as follows: "We are of the opinion that in the two appeals that have been filed before us none of the Legatees to the will, now sought to be brought in as Accountable Persons, has taken any exception to these assessm ents and it is not understood as to why the two Accountable persons who were fully associated with all the proceedings in this case are attempting to take this plea on behalf of absentee parties. If the Legatees adversely affected are not aggrieved, we see obviously no reason for the present appellant to contest this issue on their behalf. Moreover, we find that the admitted 'Shariat' heirs in this cake were the two brothers, two widows and four sisters and therefore, these persons could constitute a body of the Accountable persons. The position of the legatees under the Will in our opinion is like those of creditors who are outsiders totally, or interested parties having beneficial interest in possession in the property passing in some way or the other but such creditors cannot constitute themselves into Accountable persons under any of the provisions of the Estate Duty Act. Therefore, even on the. ratio of the decisions relied upon, the notices were properly issued and served on the Accountable persons and as all of them had authorised their representative to attend to these proceedings, the same were validly conducted before the Controller. This objection therefore, about the invalid service after due compliance of the notices issued, little lies in the mouths of any of the appellants. In our opinion, therefore, the noticed were properly issued, duly served as the compliance indicates and that the legatees have no status qua in the whole affair. The proceedings were therefore, properly conducted and the appellants must fail on this legal objection as well."
16. ' However, before us, it was submitted by Mr.S.Nazir Hyder, learned counsel for respondent No.1 that no notice was necessary to the petitioners as they were not Accountable persons. However, it is not his case that any notice was issued to the legatees much or less served on them.
17. ' Before considering this submission, we may state that the principle of audi alteram partem (no man shall be condemned unheard) is a well-settled principle.
18. ' This principle is not confined only to the Court and judicial proceedings, but extends to all proceedings by whomsoever held which may affect the person or property or other rights of the parties concerned in dispute and the maxim will apply with no less force to proceedings which affect liability to pay a tax or duty, See Commissioner of Income-tax East Pakistan v. Fazlur Rehman PLD 1964 SC 410.
19. 'Further this principle is presumed to be embodied in each an every statute in the absence of a provision to the contrary. (See: Province of East Pakistan v. Noor Muhammad P .L D 1964 SC 451.
20. ' We may also quote here a passage from the Book Fundamental Rights & Constitutional Remedies in Pakistan,p. 522, by Syed Sharifuddin Pirzada.
21. "Audi altenim partem literally means 'hear the other side'. The origin of this principle is alleged to be traceable to the dawn of time. Fortescue, J. in R. v. Chancellor of Cambridge 172 Medea 195: 1723 Fortesque. 202 suggests that the principle was invoked in the investigation of the first offence on record.
22. "The laws of God and man both give the party an opportunity to make his defence, if he has any. I remember to have .heard it observed by a very learned man upon such an occasion, that even God himself did not pass sentence upon Adam, before he was called upon to make his defence.
23. Adam (says God) where art thou? Hast thou not eaten of tree, whereof I commanded thee that thou shouldst not eat? And the same question was put to Eve also."
24. ' Murshed, C.J. says: PLD 1965 Journal Section 1, it would be a grievous mistake to think that this principle is of purely Hellenistic, Roman or Continental origin. It governs every civilized system of society. In Mishkat .Babul Qazaa' (Chapter on Justice), a Hadith of the Holy Prophet (p.b.u.h) is quoted from Tirmizi Abu Da'ood and Ibne Maajah, to the following effect.
25. Once the Prophet of God (p.b.u.h) appointed Hazrat Ali, in his early youth, to the judgeship of Yemen. Hazrat Ali pointed to his youth, and inexperience and confessed his lack of acquaintanceship with the intricacies and requirements of such a responsible undertaking. The Holy Prophet (p.b.u.h) replied 'God will guide you and give you strength in your pronounce ments, if in deciding issues between parties you will not decide in favour of one such party without hearing the other side. This is the very basis of justice. The doctrine of audi alteram partem is deeply embedded in the Shariat of Islam; it is riot mere carbon-impressed copy from the Institutes of Justinian.
26. ' The petitioners are accountable for the whole of the estate duty on the one-third estate passing to them on the death of the deceased. We say so on the authority of section 53(1) of the Estate Duty Act.
27. ' The word 'Accountable' has not been defined in the Act. However, under subsection (1) of section 53 of the Acx inter alia every person to whom any property passes on the death of the deceased is accountable for the whole of estate duty on the property passing on the death. Therefore the petitioners are accountable persons. Further, under sub section (3) every person accountable for estate duty under the provision of section 53 is required to deliver to the Controller within six months of the death of the deceased or such later time as the Controller may allow and verify to the best of his knowledge and belief, an account of all the property in respect of which estate duty is payable.
28. ' Under section 58-B of the Act in any case where no account has been delivered as required by section 53 or clause (a) of section 56, the ' Controller may call upon any person who in his opinion is accountable for payment of estate duty in respect of the property to accept such account, and if that person does not accept the account or his liability, the Controller may determine the estate duty payable by that person. We may here quote section 53 (1) and (3) and section 58 of the Act for ready reference: "53.-(1) Where any property passes on the death of the deceased, every person to whom such property so passes for any beneficial interest in possession, and also, to the extent of the property actually received or disposed of by him, every executor,, trustee, guardian, committee or other person in whom any interest in the property so passing or the management thereof is at any time vested, and every person in whom the same is vested in possession by alienation or other derivative title, shall be accountable for the whole of the estate duty on the property passing on the death: ' Provided that nothing in this section shall render a person accountable for duty who acts merely as agent or bailiff for another person in the management of property.
(3) Every person accountable for estate duty under the provisions of this section shall, within six months of the death of the deceased or such later time as the Controller may allow, deliver to the Controller and verify to the best of his knowledge and belief, an account of all the property in respect of which estate duty is payable."
29. 58-B.--In any case where no account has been delivered as required by section 53 or clause (a) of section 56 whether before or after the commencement of the Estate Duty (Amendment) Act, 1953, the Controller may cause an account of the property passing on the death of the deceased to be .prepared in such manner and by such means as he thinks fit and may call upon any person who in his opinion is accountable for the payment of estate duty in respect of the property to accept such account, and if that person does not accept the account or his liability, the Controller may determine the estate duty payable by that person."
30. ' Before respondents Nos. 1 and 2 a claim was made that one-third property receivable by the petitioners under the will on the death of the deceased should be excluded from the payment of estate duty.We have already quoted the relevant passages from the orders of respondents 1 and 2, who have held that the property bequeathed to the petitioners was liable to the duty. It therefore, follows that since the liability was sought to be imposed under the aforesaid provisions on the part of the estate passed to the petitioners they should have been given notice and a reasonable opportunity of being heard, which also seems necessary in view of the provisions of section 58-B of the Act. In our opinion the Tribunal was in error when it said that "if the legatees adversely affected are not aggrieved, we see obviously no reason for the present appellant to contest this issue on their behalf". But since no notice was issued to the legatees, therefore, the question of their being aggrieved by the demand could not arise. Further, notice served on respondent No.5 Latif Jamal could not be considered to be a notice t them for Latif Jamal was neither their attorney nor their representative in law or fact. It 'is not found as a matter of fact and indeed it is not claimed before us that any notice was served on the petitioners.
31. ' We therefore, declare the impugned orders so far as they relate to the property passed to the petitioners on the demise of the deceasedE to be without lawful authority and therefore of no legal effect.
32. ' Respondent No.1 may pass fresh order after notice and providing the petitioners a reasonable opportunity of hearing.
33. ' We however, leave the parties to bear their own costs.