Input:
Civil Appeals Nos.
797 799 (NT) of 1974.
From the Judgment and Order dated 30.4.1973 of the Punjab and Haryana High Court in Wealth Tax Reference Nos. 2, 3 and 4 of 1972.
B.B. Ahuja and Miss A. Subhashini for the Appellant.
Harish Salve, P.K. Ram and Mrs A.K. Verma for the Respondents.
The Judgment of the Court was delivered by TULZAPURKAR, J.
The common question of law that arises for our determination in these appeals 16: Whether on the facts and in the circumstances of the case, the right or interest of an assessee in an annuity policy is exempt from wealth tax under 8. 5 (1) (vi) of the Wealth Tax Act, 1957? The facts giving rise to the question are briefly these.
Yuvraj Arminder Singh and Princess Rupinder Kumari are individual assessees being assessed to wealth tax under the Wealth Tax Act, 1957 (hereinafter called the Act).
As regards the former the two assessment years are 1964 65 and 1965 66 for which the respective valuation dates 31.3.1964 and 31.3.1965, whereas the assessment year in the case of Princess Rupinder Kumari is 1965 66 for which the valuation date 18 31.3.1965.
The two assessees had purchased one annuity policy each and they claimed exemption in respect of the value of each policy in each one 's assessment to wealth tax under 8. 5 (1) (vi) of the Act.
The value of the annuity policy in the case of Yuvraj Amrinder Singh was Rs. 2,13,000 while in 570 the case of Princess Rupinder Kumari lt was Rs. 2,35,176.
Exemption in respect of such value was claimed under 8. 5 (1) (vi) of the Act inasmuch as the annuity policies fell within the expression" any policy of insurance" occurring in the said provision.
The Wealth Tax Officer rejected the claim and included the above mentioned amounts in the assessees ' net wealth for the concerned assessment years on the ground that the exemption was allowable only to insurance policy whereas the policy taken out by the assessee was an annuity policy whereunder the assessee had made lumpsum payment and he would be getting periodical returns after the lapse of a number of years and as such annuity policy could not be considered as insurance policy.
Aggrieved by the orders passed by the Wealth Tax Officer the assessees preferred appeals to the Appellate Assistant Commissioner who allowed their appeals holding them to be entitled to exemption under section 5 (1) (vi) as according to him annuity policies were covered by the term "any policy of insurance" used in the said sub section.
This view of the Appellate Assistant Commissioner was confirmed by the Income Tax Appellate Tribunal in appeals preferred by the Revenue.
In the three Wealth Tax References nos. 2, 3 & 4 of 1972 made to the High Court by the Tribunal at the instance of the Revenue the High Court confirmed the Tribunal 's view and Answered the question set out above (which arose in each Reference) in favour of the assessee.
The revenue has come up in appeals challenging the view taken by the High Court.
Since the question raised in these appeals concerns the proper construction of the expression 'any policy of insurance ' occurring in section 5 (l)(vi) of the Act read with the other connected provisions thereof in relation to the terms of the annuity policies purchased by the two assessees it will be desirable to set out the terms of the two annuity policies.
In each the annuitant is the proposer and each contains provisions for commutation, that is to say, neither is a non commutable policy.
It may be stated that the terms and conditions of both the annuity policies are the same and hence the terms and conditions of one (of Yuvraj Amrinder Singh) may be set out which are as follows: "Type of Annuity: Deferred annuity without profits guaranteed for 35 years.
Date on which the: Twenty second day of January, annuity vests: Nineteen Hundred and sixty four.
571 Even on the On expiry of 35 years calculated happening of which from the date on which the annuity annuity ceases or vests or at the death of annuitant, determines: if later.
To whom annuity To the annuitant payable: Dates when annuity On the stipulated due date of the payable 1st Annuity instalment and monthly thereafter.
Special provisions: (1) If the annuitant shall die before the date on which the annuity vests, the amount of the single premium paid but without any interest shall be returned to the proposer or in case he shall be then dead to his Proving Executors or Administrators or other legal representatives who should take our representation to his Estate or limited to the moneys payable under this policy from any Court of any State or Territory of the Union of India, or in case the Annuitant (provided he 18 also the proposer) shall have appointed any nominee to receive such money or executed any assignment in favour of any assignee to such nominee or assignee.
(2) In lieu of the payment of the annuity under this policy the proposer has the option to be exercised before the date on which the annuity vests to receive 8 cash payment of RS.
2,88,184 on 22nd January, 1964.
" Before dealing with the rival submissions made by the learned counsel for the parties the relevant provisions of the Act with which we would be concerned may be referred to.
Under the charging provision contained in section 3 of the Act wealth tax is charged, subject to the other provision contained in the Act, for every assessment year in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company, at the rate or rates specified in Schedule I. 'Net Wealth ' is defined in section 2 (m) as meaning (so far as is material) the amount by which the aggregate value of all the assets belonging to the assessee on the valuation date is in excess of the aggregate value of all the debts owed by the assessee on that date.
The expression 'assets ' is defined in s.2 (e) and the relevant part thereof runs thus : 572 2.(e) 'assets ' includes property of every description, movable or immovable property, but does not include (i) xx xx xx (ii) xx xx xx (iii) xx xx xx (iv) a right to any annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lumpsum grant; The next material provision is section 5 (1) (vi) with which we are directly concerned and it runs thus: Exemptions in respect of certain assets.
5.(1) Subject to the provisions of sub section (1A), wealth tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee (vi) the right or interest of the assessee in any policy of insurance before the moneys covered by the policies become due and payable to the assessee: Provided that in the case of a policy of insurance the premium or other payment whereon is payable during a period of less than ten years, the amount that shall not be included in the net wealth of the assessee under this clause shall be a sum that bears to the value of the right or interest of the assessee in the policy the same proportion as the number of years during which the premium or other payment on the policy is payable bears to ten; It may be stated that the above proviso was not there at the relevant time and it has been inserted by Finance Act, 1974 with effect from 1.4.1975 but since an argument was based on it we have thought fit to reproduce the same.
The next material provisions are section 5 (1) (vi a) and (vii) which run thus: " (vi a) the right of the assessee to receive any annuity payable by the Central Government under the provisions of section 280D of the Income tax Act; 573 (Inserted by Taxation Laws (Amendment) Act, 1970 with retrospective effect from 1.4.1965) (vii) the right of the assessee to receive a pension or other life annuity in respect of past services under an employer; Since a contention was raised that annuity policies of the type with which we are concerned in the case cannot be regarded as life insurance policies it will be necessary to refer to the definition of life insurance business" given in section 2 (11) of the .
Section 2 (11) runs thus: 2 (11) Life insurance business ' means the business of effecting contracts of insurance upon human life, including any contract whereby the payment of money is assured on death (except death by accident only) or the happening of any contingency dependent on human life, and any contract which is subject to payment of premiums for a term dependent on human life and shall be deemed to include (a) the granting of disability and double or triple indemnity accident benefits, if so provided in the contract of insurance, (b) the granting of annuities upon human life; and (c) the granting of superannuation allowances and annuities payable out of any fund applicable solely to the relief and maintenance of persons engaged or who have been engaged in any particular profession, trade or employment or of the dependants of such persons; At the outset we would like to dispose of the initial contention raised on behalf of the Revenue that a contract for deferred annuity is quite distinct from a 'policy of insurance ' the expression used in section 5 (1) (vi) since there is no element of insurance against any risk involved in such annuity policy a contention which found favour with the Wealth Tax Officer but was rejected by the Assistant Appellate Commissioner, the Tribunal and the High Court.
The contention is that in the case of a deferred annuity policy the annuitant, on payment of a lumpsum gets the right to the annuity equivalent in the shape of deferred h annual or monthly payments guaranteed for a certain period (in 574 the instant case for 35 years), that there is a date on which the annuity vests in the annuitant (here 22.1.1964), that usually there is a provision that in the event of the death of the annuitant before the date of vesting the single premium paid by him would be returned to the proposer, and that the proposer may have (as is the case here) the option, to be exercised before the date on which the annuity vests, to receive the commuted value in lieu of deferred annual or monthly payments and such provisions clearly show that the intention is that in essence the annuity contract is operative from the date on which the annuity vests and thereafter there is no element of insurance in the contract.
It is, therefore, urged that a contract for deferred annuity cannot be treated as a policy of insurance and as such the value thereof would not be exempt under section 5 (1) (vi) of the Act.
The gravamen of the contention is that there is no element of insurance covering any risk on human life involved in a deferred annuity policy.
The contention, in our view, proceeds on a misconception of the true or real nature of a deferred annuity policy.
It is well known that a contract of insurance based on human life can be effected in two ways, (a) the insurer, in consideration of payment of periodical premia, undertakes to pay the person for whose benefit the insurance is made a stipulated lumpsum upon the death of the person whose life is insured or the happening of any contingency dependant on human Life (e.g. usual life policies or endowment policies) and (b) the insurer, in consideration of payment of a gross sum premium, undertakes to pay the person for whose benefit the insurance is made annuity equivalent (either annual or monthly instalments) after a certain age on the happening of a contingency depending upon the duration of human life (e.g. deferred annuity policies).
In either case it is insurance against the risk of penury and as such is a contract of insurance.
That contracts of insurance based on human life are effected in one of the two ways mentioned above will be clear from the manner in which the concept of life insurance is understood in the legal and commercial world.
In Halsbury 's Laws of England, Fourth Edition Volume 25, page 13, the following passage occurs in para 7 under the heading 'Main types of risk ': 7.
Main types of risk.
For convenience the different types of insurance business may be classified as follows: (1) marine, aviation and transport insurance (2) ordinary long term insurance; (3) personal accident insurance; (4) property insurance; (5) liability 575 insurance; (6) motor vehicle insurance; (7) pecuniary 1088 insurance; (8) war risks assurance; and (93 industrial insurance.
Foot note 2 deals with 'ordinary long term insurance business ' and says 'ordinary long term insurance business ' means the business of effecting and carrying out contracts of insurance on human life or to pay any annuities on human life (A. 83 (2) (a) of Insurance Companies Act, 1974) In Bouvier 's Laws Dictionary (Rawle 's Third Revision) Vol. 2, at page 1619, the following passages occur under the caption 'Life Insurance ': LIFE INSURANCE.
The insurance of the life of a person is a contract by which the insurer, in consideration of a certain premium, either in a gross sum or periodical payments, undertakes to pay the person for whose benefit the insurance is made, a stipulated sum, or annuity equivalent, upon the death of the person whose life is insured, whenever this shall happen, if the Insurance be for the whole life or in case this shall happen within a certain period, if the Insurance be for a limited time An agreement by the insurer to pay to the insured or his nominee a specified sum of money either on the death of a designated life, or at the end of a certain period provided the death does not occur before, in consideration of the present payment of a fixed amount, or of an annuity till the death .
curs or the period of Insurance is ended.
The definition of 'life insurance business ' as given in section 2 (11) of our clearly includes, by a deeming provision, the business of granting of annuities upon human life within the expression 'life insurance business '.
In C.I.T. vs General Family Pension Fund, the Calcutta High Court has held that if the right to payment under annuity contract is governed by the happening of a contingency which depends in any way upon the duration of human life the business of effecting such a contract is life insurance business.
When the same case came up in appeal before this Court this Court confirmed that view by observing that where the 576 business of a company consists exclusively in granting terminable pensions or annuities dependent on human life in favour of the subscribers such business is life insurance business.
In Chandulal Harjiwandas vs Commissioner of Income Tax, Gujrat, while dealing with a policy called 'Children 's Deferred Endowment Assurance" issued by the Life Insurance Corporation of India in the context of the question whether rebate was allowable on the premia paid during the minority of the life assured under section 15 (1) of the Indian Income tax Act, 1922, this Court at page 631 of the Report has observed thus: "Life insurance in a broader sense comprises any contract in which one party agrees to pay a given sum upon the happening of a particular event contingent upon the duration of human life, in consideration of the immediate payment of a smaller sum or certain equivalent periodical payment by another party (Halsbury 's Laws of England third edition, volume 22, page 273).
In the instant case in each of the two annuity policies there is a term stipulating the event on the happening of which the annuity shall cease or determine and it states that the annuity shall cease or determine "on the expiry of 35 years calculated from the date on which the annuity vests (22.1.1964) or at the death of the annuitant, if later.
" In other words the monthly payments are guaranteed for a period of 35 years commencing from 22.1.1964 even if the death occurs before the expiry of the period but in case the annuitant lives beyond the said period of 35 years the monthly payments shall continue to be made till he dies.
In view of this provision which is to be found in each of the two annuity policies it cannot be gainsaid that the policies evidence a contract of insurance covering the risk of human life and such would fall within the expression a 'policy of insurance ' occurring in .
5 (1) (vi) of the Act.
The contention that no element of insurance covering any risk of human life was involved after 22.1.1964 (the date of vesting) was, in our view, rightly rejected by the AAC, the Tribunal and the High Court.
In the light of the above discussion the position becomes quite clear that annuities dependent on human life constitute a species of contracts of life insurance and would normally fall within the expression "any policy of insurance" occurring in a. 5 577 (1) (vi) of the Act.
The object of enacting the provision is the encouragement of thrift which element is present in both types of life insurance and hence the provision should be interpreted in such a manner as not to nullify that object.
Moreover, section 5 deals with exemptions in respect of certain assets and one of such exempted assets under sub clause (vi) of sub section
(1) thereof is "the right or interest of the assessee in any policy of insurance before the moneys covered by the policy become due and payable to the assessee".
It is quite clear that while granting chis exemption the legislature has used the expression "any policy of insurance" which is a very wide import.
The exemption is not confined to rights or interests in life insurance policies alone much less any particular species of life insurance policies but it extends to rights or interests of an assessee in other types of insurance policies also, such as a marine or a fire insurance policy, etc.
It cannot be suggested that the right or interest of an assessee in such other types of policies has no value or cannot be valued.
For instance, a marine or fire insurance policy may be for three or five years and in such a case the unexpired value of the premium could be one of the bases for determining the value of the assessee 's interest in the policy on the valuation date; similarly it is possible that the contingent event insured against has occurred, though the claim is pending determination on adjudication, and in such a case also the assessee would have a valuable interest in the policy.
In such case the assessee 's interest would be exempt under the aforesaid clause if the moneys under the policy have not become due and payable on The valuation date.
It is, therefore clear that the exemption contemplated by section 5 (1) (vi) covers interests of an assessee in all types of insurance policies and the expression 'any policy of insurance ' in the said provision would a fortiori attract within its ambit or scope a deferred annuity policy based on human life, it being a species of life insurance policies and, therefore, unless there is some warrant to cut down the ambit or scope of that expression the right or interest of an assessee in such a policy would be exempt from the charge of wealth tax unless of course any moneys thereunder have become due and payable to the assessee on the valuation date Counsel for the revenue urged a two fold contention in support of the plea that there is such a warrant to cut down the ambit or scope of the expression 'any insurance policy ' occurring in section 5 (1) (vi) and confine it to life insurance policies of the usual type where in consideration of periodical premia the stipulated lumpsum becomes payable upon the death or happening 578 of an event dependant upon duration of human life, that is to say the usual Life Policies or Endowment Policies.
In the first place it was urged that the proviso to sub clause (vi), though inserted by Finance Act, 1974 with effect from 1.4.1975, suggests that the legislature intended that the said expression should be so confined and annuities on life are excluded and in this behalf reliance was placed on Notes on Clauses accompanying the relevant Finance Bill as also the speech of the Hon 'ble Finance Minister while introducing the Bill.
Secondly it was urged that since non commutable annuities only have been excluded from the definition of 'assets ' given in section 2(e), the legislature could not have intended to exempt annuities based on human life under section 5 (1) (vi) by bringing them within the expression 'any policy of insurance ' used therein.
For the reason which we shall indicate presently there is no substance in either of the pleas pressed by Counsel for the Revenue.
The proviso to sub clause (vi) has been reproduced above.
It has the effect of cutting down the exemption contained in the sub clause to some extent.
It commences with the words "Provided that in the case of a policy of insurance the premium or other payment whereon is payable during a period of less than 10 years" and the argument is that the under lined words suggest that the expression "any policy insurance" in the main sub clause must mean.
a policy based on human life and that too where periodical premia are payable and as such annuity on life which consists of lumpsum investment followed by deferred annual or monthly payments is excluded.
It is impossible to read the under lined words in the proviso in this manner which has the effect of unduly narrowing down the expression "any policy of insurance" used in the main sub clause, which as indicated earlier, is of very wide import covering all types of insurance policies like life, marine fire etc.
In the first place the main provision (sub clause vi) was enacted in 1957 and continued to operate for 17/18 years till 31.3.1975 without any qualification and as such it will be absurd to attribute to The legislature, because or the insertion of the proviso (containing the underlined words) in 1975, an intention of having used the wide expression "any policy of insurance" throughout all his period in a narrow sense as suggested.
Secondly if the main provision and the proviso are read together the underlined words do not suggest that any narrow construction, much less as urged, was intended and to say so would be missing the real object or purpose of the proviso.
In our view the proper way to read the proviso would be to treat the main provision as creating or granting an exemption and the 579 proviso carving out something from the exemption.
The main provision creates an exemption in respect of the assessee 's right or interest in any policy of insurance and the proviso seeks to cut down that exemption to a limited extent, namely whenever there is a policy of insurance in respect whereof periodical premia are payable for a duration of less than 10 years then in such a case a proportionate exemption specified therein will be available to the assessee irrespective of what type of policy it is; the proviso has no other effect.
That such was the object or purpose of inserting the proviso will be clear if regard is had to relevant part of notes on Clauses accompanying the Bill and the relevant portion of the speech of the Finance Minister while introducing the Bill.
We were taken through the relevant portions of Notes on Clauses [vide and the speech of the Hon 'ble Finance Minister while introducing the Bill vide and in our view far from supporting the contention of counsel for the Revenue these lend support to the view which we have just expressed.
The relevant portion of 'notes on Clauses ' states that under this amendment (the insertion of proviso) the value of the taxpayer 's right or interest in a policy of insurance will be exempt from tax only if the premia are payable over a period of ten years or more.
In cases where premia are payable over a period of less than ten years, only a proportionate amount of the value of the taxpayer 's right or interest in the policy of insurance will be exempt from wealth tax.
The Finance Minister 's speech though strictly not relevant as an aid to construction, substantially reiterates what has been stated in the 'Notes on Clauses ' accompanying the Bill.
On this account therefore, there is no warrant to put a narrow construction on the expression any policy of insurance occurring in sub clause (vi) of section 5 (1).
Similarly counsel 's reliance on the definition of 'assets ' given in section 2 (e) of the Act and particularly the exclusionary part contained in sub clause (iv) in relation to annuities for the purpose of giving a narrow construction to the expression 'any policy of insurance ' occurring in sub clause (vi) of section 5 (1) is of no avail.
We have already quoted above section 2 (e) (iv).
The definition of 'assets ' is in two parts; the first part defines assets as including property of every description, movable or immovable while the second part excludes certain items of property from falling within the expression 'assets ' and one of the item coming within this exclusionary part is: (iv) a right to any annuity in any case where the terms and conditions 580 relating thereto preclude the commutation of any portion thereof into a lumpsum grant .
In other words non commutable annuities only are excluded from 'assets '.
The contention for the Revenue is that if under section 2 (e) (iv) only non commutable annuities have been excluded from the definition of assets then the legislature could not have intended to exempt annuities based on human life from wealth tax charge under section 5 (1) (vi); in other words it is urged that it would be incongruous for the legislature to include commutable annuities on life within the expression 'assets ' under section 2 (e) on the one hand and at the same time to exempt such annuities from the charge by including them within the expression 'any policy of insurance ' under section 5(1) (vi).
The contention in our view, is entirely misconceived, for, in the first place it proceeds on a wrong assumption that the topic of annuities is exhaustively dealt with under section 2 (e) (iv) and secondly it ignores the scheme of the Act emerging from the relevant provisions.
It is obvious that the postulate of the so called incongruity that is being suggested on a reading of the two concerned provisions together must be that the topic of annuities has been dealt with exhaustively by section 2 (e) (iv).
but the postulate is non existent.
That clause (iv) of section 2 (e) is not exhaustive of all annuities is clear from the fact that at least 2 types of annuities are separately and specifically dealt with under section 5 (1) (vi a) and 5 (1) (vii) the former speaks of the assessee 's right to receive annuity payable by the Central Government under section 280D of the Income tax Act and the latter speaks of the assessee 's right to receive a pension or other life annuity in respect of past services under an employer.
If that be so, the argument based on any incongruity arising from reading of section 2 (e) (iv) and section 5 (1) (vi) together must fall to the ground.
Further a careful analysis of the two relevant provisions shows what is the general scheme of the Act.
Section 2 (e) defines 'assets ' to include property of every description; it however excludes certain items from the purview of the charge by excluding them from the definition of 'assets ', while section 5 (1) (vi) on the other hand exempts certain assets from the tax by declaring that tax will not be payable in respect of such assets.
In other words in order to be covered by the exemption under section 5 (1) (vi) a property must in the first instance be an asset under section 2 (e).
The question of exempting commutable annuity policies of insurance arises only because they are not excluded from the definition but because they fall within the definition of 'assets '.
It is therefore, fallacious to contend that because commutable annuity policies fall within 'assets ' they should not be exempted under section 5 (1) (vi).
581 We have already pointed out that a reading of section 2 (e) together with section 5 (1) (vi a) and 5 (1)(vii) negates the view that legislative intention was to deal exhaustively with annuities under section 2 (e) (iv).
Now, a commutable life annuity received from an Employer would undoubtedly be exempt from the charge of wealth tax under section 5 (1) (vii).
If section 2(e) is construed as confining, by implication, the exemption from wealth tax to non commutable annuities alone, then there would be an obvious conflict between section 5 (1) (vii) and section 2 (e).
Therefore, a harmonious reading of section 2(e) (iv) with section 5 (1) (vi) and s.5 (1) (vii) would be that while non commutable annuities are wholly outside the purview of the wealth tax, commutable annuities are exempt under s.5 (1) (vi) and 5 (1) (vii) to the limited extent mentioned in each.
It is well settled that when such a harmonious construction is possible and which furthers the object of the Act namely to promote thrift and channelise private savings for national use, the same must be preferred to the construction which leads to a conflict between s.2 (e) (iv) and s.5 (1) (vi).
The contention that a narrow construction should be placed on the expression 'any policy of insurance ' occurring in section 5 (1) (vi) of the Act, has, therefore to be rejected.
In other words commutable annuities on life like the ones in the instant case, would fall under s.5 (1) (vi) of the Act and the value thereof would qualify for the exemption from the charge.
In the result we decide the point raised in the appeals in favour of the assessees and confirm the view of the High Court.
The appeals are therefore, dismissed with costs.
A.P.J. Appeals dismissed.

Output:
The two assessees are individually assessed to wealth tax under the Wealth Tax Act, 1957.
They had purchased one annuity policy each, and claimed exemption of the value thereof under 8. 5 (1) (vi) of the Act, alleging that the annuity policies fell within the expression "any policy of insurance" occurring in that provision.
The Wealth Tax Officer rejected the claim and included the value of the annuity policies in the assessees ' net wealth on the ground that the exemption was allowable only to insurance policy whereas the policy taken out by the assessee was an annuity policy whereunder the assessee had made lumpsum payment and he would be getting periodical returns after the lapse of a number of years and as such annuity policy could not be considered as insurance policy.
The Appellate Assistant Commissioner allowed the assessees ' appeals holding that the annuity policies were covered by the term "any policy of insurance" and, therefore, they were entitled to exemption under section 5 (1) (vi).
This view was confirmed by the Appellate Tribunal in appeals and in Reference by the High Court.
In the appeals by the Revenue to this Court it was contended: (1) that a contract for deferred annuity is quite 566 distinct from a "policy of insurance"; an annuity contract is operative from the date on which annuity vests and thereafter there is no element of insurance in the contract covering the risk of human life and, therefore, a contract for deferred annuity cannot be treated as a policy of insurance and the value thereof would not be exempted under section 5 (1) (vi) of the Act; (2) that the ambit or scope of the expression "any insurance policy" occurring in section 5 (1) (vi) should be confined to the usual life policies or endowment policies; (3) that the proviso to sub clause (vi) suggests that the legislature intended to confine the expression "any insurance policy" to the exclusion of annuities on life and that since non commutable annuities only have been excluded from the definition of 'assets ' given in section 2 (e), the legislature could not have intended to exempt annuities based on human life under section 5 (1) (vi) by bringing them within the expression "any policy of insurance" and (4) that it would be incongruous for the legislature to include commutable annuities on life within the expression assets under section 2 (e) on the one hand and at the same time to exempt such annuities from the charge including them within the expression "any policy of insurance" under section 5 (1) (vi).
Dismissing the Appeals, ^ HELD: 1.
Commutable annuities on life, like the ones in the instant case, would fall under 8.5(1)(vi) of the Wealth Tax Act 1957 and the value thereof would qualify for the exemption from the charge.
[581 D] 2.
The exemption contemplated by 6.5(1)(vi) covers interests of an assessee in all types of insurance policies and the expression" any policy of insurance" in that provision would fortiori attract within its ambit or scope a deferred annuity policy based on human life, it being a species of life insurance policies and, therefore, unless there is some warrant to cut down the ambit or scope of that expression, the right of interest of an assessee in such a policy would be exempt from the charge of wealth tax unless my moneys thereunder have become due and payable to the assessee on the valuation date.
[577 E G] 3.
The definition of "life insurance business" as given in s.2(11) of clearly includes by a teeming provision, the business of granting of annuities upon human life within the expression "life insurance business".
[575 F] 4.
A contract of insurance based on human life can be effected in two ways, (a) the insurer, in consideration of 567 payment of periodical premia, undertakes to pay the person for whose benefit the insurance is made a stipulated lumpsum upon the death of the person whose life is insured or the happening of any contingency dependent on human life (e.g. usual life policies or endowment policies) and (b) the insurer, in consideration of payment of a gross sum premium undertakes to pay the person for whose benefit the insurance is made annuity equivalent (either annual or monthly instalments) after a certain age on the happening of a contingency depending upon the duration of human life (e.g. deferred annuity policies).
In either case it is insurance against the risk of penury and as such is a contract of insurance.
[574 D F] In the instant case, each annuity policy stipulate that the monthly payments are guaranteed for a period of 35 years commencing from 22.1.1984 even if the death occurs before the expiry of the period but in case the annuitant lives beyond the period of 35 years the monthly payments shall continue to be made till he dies .
Thus the annuity policies evidence a contract of insurance covering the risk of human life and as such would fall with in the expression "policy of insurance" occurring in s.5 (1) (vi) of the Act.
[576 D f] C.I.T. vs General Family Pension Fund, (1952) 22 Com.
Cas 89, approved.
Chandulal Harjiwandas vs Commissioner of Income Tax, Gujrat, , Halsbury 's Laws of England, Fourth Edition, Vol.
25, p. 13 and Bouvier 's Law Dictionary (Rawle 's Third Revision) Vol. 2, p. 1619, relied on.
The object of the provision in section 5 is the encouragement of thrift which element is present in both types of life insurance.
The provision should hence be interpreted as not to nullify that object.
Moreover, section 5 deals with exemptions in respect of certain assets and one of such exempted assets under sub cl.
(vi) in any policy of insurance before the monies covered by the policy become due and payable to the assessee".
While granting this exemption the legislature has used the expression "any policy of insurance" which is of very wide import.
The exemption is not confined to rights or interests in life insurance policies alone, but extends the rights or interests of an assessee in other types of insurance policies also, such as a marine or life insurance policy etc.
[577 A C] 568 6.
The proviso to sub cl.
(vi) has the effect of cutting down the exemption contained in the sub clause to some extent.
The main provision creates an exemption in respect of the assessee 's "right or interest in any policy of insurance" and the proviso seeks to cut down that exemption to a limited extent, namely, whenever there is a policy of insurance in respect whereof periodical premia are payable for a duration of less than 10 years then in such a case a proportionate Exemption specified therein will be available to the assessee irrespective of what type of policy it is; the proviso has no other effect.
That such was the object or purpose of inserting the proviso will be clear if regard is had to the Notes on Clauses accompanying the Bill and the speech of the Finance Minister while introducing the Bill.
There 18 therefore, no warrant to put a narrow construction on the expression "any policy of insurance" occurring in sub cl.
(vi) of 8. 5 (1).
[578 C; 579 A C; 579 E] 7.
The definition of 'assets ' in 8. 2 (e) of the Act is in two parts; the first part defines assets as including property of every description moveable or immovable, while the second part excludes certain items of property from falling within the expression 'assets ' and one of the item coming within this esclusionary part 18: "(iv) a right to any annuity in any case where the terms and conditions relating thereto preclude the commutation of any portion thereof into a lumpsum grant".
This excludes only non commutable annuities from 'assets '.
Clause (lv) of 8 2 (e) does not exhaustively deal with all type of annuities.
Two types of annuities are separately and specifically dealt with under 8. 5 (i) (vi a) and 5 (i) (vii).
Section 2 (e) defines 'assets ' to include property of every description movable or immovable excluding certain items from the purview of the charge by excluding them from the definition of 'assets '; while 8. 5 (1) (vi) exempts certain assets from the tax by declaring that tax will not be payable on them.
in order to be covered by the exemption under 8. 5 (1) (vi) a property must in the first instance be an asset under 8. 2 (e).
The question of exempting commutable annuity policies of insurance arises only because they fall within the definition of 'assets '.
It is, therefore, fallacious to contend that because commutable annuity policies fall within 'assets ' they should not be exempted under 8. 5 (1) (vi).
[579 ; 580 A H] 8.
A reading of 8. 2 (e) together with 8. 5 (1) (vi a) and 5 (1) (vil) negates the view that legislative intention was to deal exhaustively with annuities under section 2 (e) (iv).
A commutable 569 life annuity received from an employer would undoubtedly be exempt from the charge of wealth tax under 8 5 (1) (vil) If 8. 2 (e) 16 construed as confining, by implication, the exemption from wealth tax to non commutable annuities alone, then there would be an obvious conflict between 8. 5 (1) (vii) and 8. 2 (e).
Therefore, a harmonious reading of 8. 2 (e) (iv) with 8. 5 (1) (vi) and 8. 5 (1) (vii) would be that while non c .
mutable p annuities are wholly outside the purview of the wealth tax, non commutable annuities are exempt under 8. 5 (1) (vi) and 5 (1)(vii) to the limited extent mentioned in each.
[581 A C]


Input:
ition No. 397 of 1981.
(Under Article 32 of the Constitution) Mrs. Shyamala Pappu, M. section Mann, S Shukhar, Miss Raj Shree and Mrs. Indra Sawhney for the Petitioner.
section K. Gambhir and Vijay Hansaria for the Respondent.
82 The Judgment of the Court was delivered by CHINNAPPA REDDY J.
Shiv Prasad Bhatnagar is under preventive detention pursuant to an order made by the District Magistrate, Vidisha, Madhya Pradesh.
The order and the grounds of detention were served on him on November 28, 1980.
The District Magistrate made a report of the order to the State Government and the latter approved the detention order on December 2, 1980.
The approval was communicated to the detenu on December 5, 1980.
A representation was submitted by the detenu on December 13, 1980.
The Advisory Board constituted by the State Government met on January 3, 1981, considered the material placed before it by the detaining authority as well as the representation and the written arguments submitted by the detenu.
The detenu was also given a personal hearing.
The Advisory Board submitted its report to the State Government on January 4, 1981.
Thereafter the State Government confirmed the order of detention on February 3, 1981 under Sec.
12 (1) of the National Security Act.
The period of detention was stipulated as one year from the date of the order of detention.
The order confirming the detention was communicated to the detenu on February 12, 1981 and he was also informed that the Advisory Board had opined that there was sufficient cause for his detention.
Shyamla Pappu, learned counsel for the detenu made a number of submissions.
In the view that we are taking of one of the primary submissions, we do not think it necessary to consider the rest of the submissions.
The primary submission that we have in mind is that the grounds of detention suffer from the vice of either vagueness or staleness.
The first ground mentions that the detenu alongwith his friends, in the second week of November, 1980, indulged in filthy abuse of Muslims, threatened their lives and performed "mar pit ' '.
Details of incidents were given to substantiate the ground.
As many as six incidents were mentioned and in everyone of them it was said that the detenu alongwith his associates had indulged in this or that violent action.
No mention was made of the name of even a single associate.
The argument was that the reference to 'associates ' without naming even one rendered the ground vague and, therefore, vitiated it.
Similarly, it was said the second ground also referred to the detenu and his accociates without naming even a single associate and for that reason the second ground also was vague.
The further submission was that the incidents enumerated in second ground were of the years 1974, 1975, 1977 and 1978 and could by no means be said to be proximate 83 enough to sustain an order of preventive detention.
The second ground was to the effect that the detenu and his associates had terrorized the common man in the Vidisha area by their various criminal acts which caused disturbance to public peace and public safety.
Several incidents were narrated to substantiate this ground.
The first incident was of the year 1974, the second incident was of the year 1975, the next three incidents were of the year 1977 and the rest of the incidents barring the last one were of the year 1978.
A perusal of the incidents enumerated to substantiate the second ground show that apart from the vice of staleness from which they appear to suffer, the incidents are related to "law and order" and not to the maintenance of public order.
The incidents appear to bear a striking resemblance to the grounds of detention which were considered In Re: Sushanta Goswami & Ors., (1) particularly in the cases of Debendra Nath Das, Abdul Wahab, Anil Das, Dilip Kumar Chakraborty and Ashoka Kumar Mukherjee.
It is now well settled that grounds of detention must be pertinent and not irrelevant, proximate and not stale, precise and not vague.
Irrelevance, staleness and vagueness are vices any single one of which is sufficient to vitiate a ground of detention.
And, a single vicious ground is sufficient to vitiate an order of detention.
In the present case we are satisfied that the second ground of detention suffers both from the vice of staleness, because of the passage of time since the happening of some of the incidents and the vice of irrelevance because they relate to 'law and order ' and not to 'the maintenance of public order '.
The detenu is entitled to be released.
He is directed to be released forthwith.
The petition is allowed.

Output:
The petitioner was detained under section 12 (1) of the National Security Act on the grounds that he, alongwith his friends, in the second week of November, 1980 indulged in filthy abuse of Muslims, threatened their lives and performed "marpeet" and that he and his associates terrorised the common man in the area by their various criminal acts which caused disturbance to the public peace and public safety.
In support of the petition it was contended on behalf of the petitioner that the reference to associates without naming even one rendered the ground vague and, therefore, vitiated the order of detention and (2) that the incidents enumerated in the second ground related to the years 1974, 1975, 1977 and 1978 which could not be said to be proximate enough to sustain the order of detention.
Allowing the petition, ^ HELD: The detenu is entitled to be released.
It is now well settled that grounds of detention must be pertinent and not irrelevant, proximate and not state, precise and not vague.
Irrelevance, staleness and vagueness are vices any single one of which is sufficient to vitiate the order of detention.
[83 D] In the instant case the incidents enumerated to substantiate the second ground show that apart from the vice of staleness from which they suffer, they were related to "law and order" and not to the maintenance of public order.
They are stale because of the passage of time since the happening of some of the incidents; they are irrelevant because they related to law and order and not to maintenance of public order.
[83 E] In Re: Sushanta Goswami and Ors., ; followed.


Input:
Petition No. 1740 of 1984.
(For Directions) IN (Criminal Appeal No. 356 of 1983) 413 And (Criminal Misc.
Petition No. 2217 of 1984) (For Directions) IN (Criminal Appeal No. 356 of 1983) Ram Jethmalani, Ms. Rani Jethmalani, Naresh Jethmalani and J. Wad for the Petitioner.
A.K. Sen, M. N. Shroff and Dalveer Bhandari for the Respondent.
The Order of the Court was delivered by DESAI, J. Consequent upon the order made by a Constitution Bench of this Court on February 16, 1984 in the Judgment rendered in Criminal Appeal No. 356 of 1983 and Transferred Case No. 347 of 1983 alongwith Transferred Case No. 3/48 of 1983, Special Case No. 24 of 1982 and Special Case No. 3/83 pending in the Court of the Special Judge, Greater Bombay (Shri R.B. Sule) were withdrawn and stood transferred to the High Court of Bombay.
In compliance with the direction given in the same judgment, the learned Chief Justice of the High Court of Bombay assigned both the cases to Mr. Justice S.N. Khatri, a sitting Judge of the High Court.
The learned Judge called upon the parties to appear before him on March 12, 1984.
When the cases were taken up for hearing, certain preliminary objections were raised on behalf of the accused which we were told have been dealt with by the learned Judge in his order dated March 16, 1984.
In respect of two issues further consideration was postponed.
These issues turn upon the question of procedure to be adopted by the learned Judge in the trial of the two cases and who should be in charge of the prosecution.
In our opinion, if the judgment of this Court was read with care and precision, these two questions would have hardly arisen.
However, two misc.
petitions were moved in this Court for clarification of the judgment so as to thwart avoidable delay in the trial of cases.
The operative portion of the judgment which has a bearing on the question raised reads as under: "Therefore, Special Case No. 24 of 1982 and Special Case No. 3/83 pending in the Court of Special Judge, 414 Greater Bombay Shri R.B. Sule are withdrawn and transferred to the High Court of Bombay with a request to the learned Chief Justice to assign these two cases to a sitting Judge of the High Court".
In the penultimate paragraph of the judgment while allowing the appeal this Court directed as under: "This appeal accordingly succeeds and is allowed.
The order and decision of the learned Special Judge Shri R.B. Sule dated July 25, 1983 discharging the accused in Special Case No. 24 of 1982 and Special Case No. 3/83 is hereby set aside and the trial shall proceed further from the stage where the accused was discharged.
" Reading two directions together, it clearly emerges that the learned Judge has to hold trial according to the procedure prescribed in Chapter XIX B i.e. the procedure prescribed in Secs.
244 to 247 of the Code of Criminal Procedure, 1973.
To be precise, the learned Judge has to try the case according to the procedure prescribed for cases instituted otherwise than on police report by Magistrate.
This position is clear and unambiguous in view of the fact that this Court while allowing the appeal was hearing amongst others Transferred Case No. 347 of 1983 being the Criminal Revision Application No. 354 of 1983 on the file of the High Court of the Judicature at Bombay against the order of the learned Special Judge Shri R.B. Sule discharging the accused.
If the criminal revision application was not with drawn to this Court, the High Court while hearing criminal revision application could have under Sec.
407 Code of Criminal Procedure, 1973 transferred the Special case from which criminal revision application arose to itself for trial and in such a situation the High Court under Sec.
407 (8), Code of Criminal Procedure, 1973 would have to follow the same procedure which the Court of Special Judge would have followed if the case would not have been so transferred.
It is not in dispute that the learned Special Judge while holding the trial was required to follow the procedure prescribed by the Code of Criminal Procedure, 1973 for trial of warrant cases by Magistrates and in the facts of this case the procedure would be in respect of cases instituted otherwise than on police report.
The trial was to proceed further from the stage when the accused was discharged.
This in our opinion is obvious and needs no further clarification.
8(1) of the Criminal Law (Amendment) Act, 1952 as interpreted by this Court in Criminal 415 Appeal No. 247 of 1983 decided on February 16, 1984 makes this position unambiguous and abundantly clear.
The clarification in respect of the first point read with the judgment rendered in Criminal Appeal No. 247 of 1983 in which Sec. 8 (3) of the Criminal Law (Amendment) Act, 1952 had come in for interpretation, it follows as a corollary that if the cognizance of an offence is taken under Sec.
8(1) of the Criminal Law (Amendment) Act, 1952 and the trial has to be held according to the procedure prescribed therein, under Sec. 8 (3) the learned advocate engaged by the complainant to conduct the prosecution will be deemed to be a public prosecutor.
In such a situation, there is no question of the State appointed public prosecutor to conduct the prosecution.
It is, therefore, clarified which to some extent may appear tautologous in view of the aforementioned judgment, that it would be for the complainant to decide who would be the learned advocate incharge of the prosecution and the advocate so appointed would be deemed to be a public prosecutor.
Dr. Singhvi who appeared for the respondent accused submitted that in the guise of a petition for clarification, it is a covert attempt to forestall or foreclose the decision on the aforementioned two points which are pending before the learned Judge before whom both the cases are pending.
There was no question of deciding the aforementioned two points afresh because the answers to them are implicit in the judgments referred to above.
Dr. Singhvi had nothing to say when invited by the Court about the clarification which the Court my offer in respect of the aforementioned two questions.
He left us in no doubt that he does not wish to make any submission on the question of clarification in respect of the aforementioned two questions.
We note that the Government of Maharashtra has entered appearance before us through Shri A.K. Sen and Shri M.N. Shroff but no submission were made by them.
Mr. Jethmalani, learned counsel for the complainant wanted this Court to consider prayers Nos.
(c) and (d) in the misc.
petition which we consider for the disposal of the misc.
petitions as irrelevant and we do not propose to deal with the same in these petitions.
In sum the clarification is that the learned Judge in the trial 416 of the two cases pending before him has to follow the procedure prescribed in Secs.
244 to 247 (both inclusive) included in Chapter XIX B of the Code of Criminal Procedure, 1973.
It is for the complainant to decide who should be his learned advocate incharge of the prosecution and there is no question of entrusting the trial of the two cases to a State appointed public prosecutor.

Output:
In compliance with directions given by the Constitution Bench of the Supreme Court, the Bombay High Court withdrew to itself Special Case No. 24 of 1982 and Special Case No. 5/83 pending in the Court of the Special Judge, Greater Bombay and assigned the said two cases to Mr. Justice S.N. Khatri a sitting Judge of the said court.
When the cases were taken up for hearing, two preliminary contentions were raised as to whether State should appoint a Public Prosecutor to conduct the trial and what should be the procedure to be followed and from what stage of the trial.
Hence the two applications for classification.
The Court; ^ HELD: 1.
The learned Judge has to hold the trial according to the procedure prescribed in chapter XIX B i.e., the procedure prescribed in section 244 to 247 (both inclusive) of the Code of Criminal Procedure.
To be precise, the learned Judge has to try the case according to the procedure prescribed.
for cases instituted otherwise than on police report by Magistrate.
The trial was to proceed from the stage when the accused was discharged.
[414D E] 2.
If the cognizance of an offence is taken under section 8( ') of the criminal law (Amendment) Act, 1952, and the trial has to be held according to the procedure prescribed therein, under section 8(3), the learned advocate engaged by the complainant to conduct the prosecution will be deemed to be a public prosecutor.
In such a situation, there is no question of the State appointed Public Prosecutor to conduct, the prosecution.
It is for the complainant to decide who should be his learned advocate in charge of the Prosecution.
[415B C]


Input:
ivil Appeal No. 4460 Of 1988.
From the Order dated 15.4.
1988 of the Customs Excise and Gold (Control) Appellate Tribunal New Delhi in Appeal No. E/Appeal No. 2225 of 1986 A. 3 V. Sreedharan, V.J. Francis and N.M. Popli for the Appel lant.
Ashok H. Desai, Solicitor General, Dalip Tandon and P. Parmeshwaran for the Respondent.
The Judgment of the Court was delivered by FATHIMA BEEVI, J.
This is an appeal under section 35L of the .
The appeal is di rected against the order dated 15.4.1988 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi.
The appellant is the manufacturer of Hacksaw blades and Bandsaw Blades failing under Tariff Item No. 51 A(iv) of the Central Excise Tariff.
The appellant filed a classification list as per Rule 173B of the Central Excise Rules 1944 on 26.3.1985 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effec tive rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The aggregate value of the clearance in the preceding year i.e. 1984 85 did not exceed Rs.75 lakhs.
In the case of first clearance upto an aggregate value not exceeding Rs.7.5 lakhs, the effective rates of duty is nil and in the case of next clearance of Rs.7.5 lakhs, the duty is 3.75% Ad valorem.
The Assistant Collector of Central Excise, Hyderabad, approved the Tariff rate 15% Ad valorem on 3.6.1985 instead of the above effective rates as the appellant did not claim the exemption as per Notification No.85/85 CE dated 17.3.1985 due to ignorance.
A revised classification list with the effective rates in respect of the products with retrospective effect from 26.3.1985 was filed on 31.10.1985.
The revised classification list was approved.
The appellant claimed that they had paid excess Rs.2,55,172.55 from 1.4.1985 to 31.8.1985 as excise duty.
They made an application for refund as per rule under sec tion 11B of the on 30.10.1985.
The Assistant Collector of Central Excise by his order dated 13.12.1985 sanctioned the refund claim only partly.
For the period from 1.4.1985 to 27.4.1985, the refund claim was rejected on the ground that the same was time barred.
The Assistant Collector held that the refund claim for the period 1.4.1985 to 27.4.1985 was time barred for the reason that under section 11B, the 'relevant date ' for preferring the claim for a case such as that of the appellant was the date of payment of duty and, according to him, the duty had been paid by adjustment in the personal ledger account as and when goods were removed.
The plea of the appellant is that mere debiting in the personal ledger account should not be taken as the starting point for 4 limitation and the relevant date should be the date on which RT 12 Returns which are filed on a monthly basis are as sessed.
The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
The further appeal to the Tribunal was also unsuccessful.
The question that arises for decision in the appeal is as to the starting point of limitation for filing an appli cation under section 11B of the .
Section 11B so far as it is material reads as under: "11B. Claim for refund of duty (1) Any person claiming refund of any duty of excise may make an application for refund of such duty to the Assistant Collector of Central Excise before the expiry of six months from the relevant date.
Provided that the limitation of six months shall not apply where any duty has been paid under protest.
Explanation For the purposes of this section (B) "relevant date" means, (a) to (d) . . . . . . . . (e) in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (f) in any other case, the date of payment of duty.
" The appellant 's contention before the authorities was that the date of assessment would be the date of payment of duty within the meaning of clause (f) above.
We agree with the learned Solicitor General that this argument is not tenable.
Where an assessee maintains a personal ledger account, duty is paid by way of debit therein and goes to reduce the amount of deposit paid by the assessee.
It is 5 not a mere adjustment entry; it is effective payment.
Before us, however, learned counsel for the assessee has raised an alternative contention.
According to the appellant it is clause (e) which is applicable in the case whereas the contention of the respondent is that clause (f) is attract ed.
To understand this argument, it is necessary to refer to 'Self removal ' procedure under which the appellant cleared the goods.
Chapter VII A of the Rules relates to removal of excise goods on determination of duty by producers, manufacturers of private warehouse licensees.
Under Rule 173B, every assessee shall file with the Proper Officer for approval a list in prescribed form showing full description of all excisable goods or products manufactured, the rate of duty leviable on such goods and such other particulars as the Collector may direct.
The Proper Officer shall, after such enquiry as he deems fit, approve the list with such modifi cations as are considered necessary and return one copy of the approved list to the assessee who shall unless otherwise directed by the Proper Officer determine the duty payable on the goods intended to be removed in accordance with such list.
All clearance shall be made only after the approval of the list by the Proper Officer.
Sub rule (2 A) of Rule 173B provides as under: "(2 A) All clearances shall, subject to the provisions of rule 173CC, be made only after the approval of the list by the proper officer.
If the proper officer is of the opinion that on account of any inquiry to be made in the matter or for any other reason to be recorded in writing there is likely to be delay in according the approval, he shall, either on a written request made by the assessee or on his own accord, allow such assessee to avail himself of the procedure prescribed under rule 9B for provisional assess ment of the goods.
" Where the assessee disputes rate of duty approved by the Proper Officer in respect of goods, he may have to give an intimation to that effect to such officer and to pay duty under protest at the rate approved by such officer.
When the dispute about the rate of duty has been finalised or for any other reason affecting rates of duty, a modification of the rate or rates of duty is necessitated, the Proper Officer shall make such modification and inform the assessee accord ingly.
Under Rule 173C, the assessee shall file with the Proper Officer a price list in prescribed form.
Prior ap proval of the price list by the 6 Proper Officer is necessary in the specified cases.
Here also, sub rule (5) of rule 173C provides: "(5) Subject to the provisions of rule 173CC, an assessee specified in sub rule (2) shall not clear any goods from a factory, warehouse or other approved place of storage unless the price list has been approved by the proper officer.
In case the proper officer is of the opinion that on account of any enquiry to be made in the matter or for any other rea sons to be recorded in writing, there is likely to be delay in according approval, he shall either on a written request made by the assessee or of his own accord allow such asses see to avail himself of the procedure prescribed under rule 9B for provisional assessment of the goods." Under Rule 173CC, assessee may remove goods in certain cases pending approval by the Proper Officer of the classi fication or price list.
Rule 173F provides that where the assessee has complied with the provisions of Rules 173B, 173D, and where applicable 173C, 173CC, he shall himself determine his liability for the duty due on the excisable goods intended to be removed and shall not, except as other wise expressly provided, remove such goods unless he has paid the duty as determined.
Under Rule 173G, every assessee shall keep an account current with the Collector.
This rule lays down the procedure which is to be followed by the assessee for payment of duty.
According to sub rule (3) of Rule 173G, within five days after the close of each month every assessee shall file with the Proper Officer a monthly return in the prescribed form showing the quantity of the excisable goods manufactured, duty paid on such quantity and other particulars.
The Proper Officer makes an assessment as provided under Rule 1731 on the basis of the information contained in the return and after such further enquiry as he may consider necessary assess the duty due on the goods removed and the assessment is completed.
The duty determined and paid by the assessee under Rule 173F shall be adjusted against the duty assessed and where the duty so assessed is more than the duty determined and paid, the assessee shall pay the deficiency by making a debit in the current account within 10 days of the receipt of copy of the return and where such duty is less, the assessee shall take credit in the account current for the excess.
This is the scheme for the payment of duty for clearance of goods by the manufacturers.
This procedure is known as self removal procedure.
There will be no time bar for refund if the duty is paid under 7 protest.
The period of 6 months is prescribed in other cases.
As we have already seen, section 1 1B says that the period of 6 months "in a case where duty of excise is paid provisionally under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof".
In this case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.1985.
From the provisions of Rules 173B, 173C and 173CC, which we have set out earlier, it will be seen that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in according the approval the officer can allow the assessee to avail himself of the procedure pre scribed under Rule 9B for provisional assessment of the goods.
In the present case between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
This is the procedure prescribed under Rule 9B except for the circum stance that no bond as provided in Rule 9B is required in a case where the personal ledger account is maintained for the clearance of the goods, since there is always a balance in the account current sufficient to cover the duty that may be demanded on the goods intended to be removed at any time.
In these circumstances, the clearances of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11B will be attracted.
In this case the RT 12 Returns for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11B will operate.
In the present case the refund application had been filed on the 30th of October, 1985.
It cannot, therefore, said to be time barred.
We, therefore, accept this contention of the appellant.
The appeal has therefore to be allowed holding the appellant is entitled to the full amount and there is no bar of limi tation as found by the Tribunal.
We, therefore, allow the appeal.
In the facts and circumstances of the case there will be no order as to costs.
T.N.A. Appeal allowed.

Output:
The appellant was manufacturing Hacksaw blades and Bandsaw falling under Tariff Item No. 51 A(iv) of the Cen tral Excise Tariff.
On 26.3.1985 they filed a classification list as per Rule 173 B of the Central Excise Rules, 1944 in respect of their products furnishing the tariff rate of 15% Ad valorem by mistake instead of furnishing the effective rates of duty as per Notification No.85/85 CE dated 17.3.1985.
The Assistant Collector of Central Excise ap proved the classification list on 3.6.1985.
On 31.10.1985 the appellant filed a revised classification list with the effective rates of its products with retrospective effect from 26.3.1985 which was also approved by the Assistant Collector of Central Excise.
On 30.10.1985 the appellant made an application under section 11B of the for refund of excise duty claiming that they had paid excess excise duty from 1.4.1985 to 31.8.1985.
By its order dated 13.12.1985 the Assistant Collector of Central Excise allowed the claim only partly but rejected the claim for the period from 1.4.1985 to 27.4.1985 on the ground that the claim was barred under section 11B of the Act because the 'relevant date ' for preferring the claim for the appellant was the date of payment of duty and the duty had been paid by adjustment in the personal ledger account as and when goods were removed; The order of the Assistant Collector was confirmed in the appeal by the Collector of Central Excise (Appeals).
Appellant 's further appeal to the Customs Excise and Gold (Control) Appellate Tribunal was also unsuccessful.
In appeal to this Court under section 35L of the it was contended on behalf of the appellant (i) that mere debiting in the personal ledger account should not be taken as the 2 starting point for limitation and the, relevant date should be the date on which ART 12 Returns, which were filed on a monthly basis, were assessed: and (ii) that clause (e) of Explanation to Section 11 (B) was applicable to the case.
Allowing the appeal, this Court, HELD: 1.
The scheme for payment of duty of goods under which the appellant was clearing his goods is known as 'self removal ' procedure.
There will be no time bar for refund if the duty is paid under protest.
The period of 6 months is prescribed in other cases.
[6H; 7A] 2.
In the instant case, the classification list filed by the appellant for the period 1.4.1985 to 27.4.1985 was not approved till 3.6.85.
From provisions of Rules 173B, 173C and 173CC of the Central Excise Rules, 1944 it is clear that clearances can be made only after the approval of the list by the particular officer.
However, if there is likely to be delay in accordance with the approval the officer can allow the assessee to avail himself of the procedure prescribed under Rule 9B for provisional assessment of goods.
Between 1st April, 1975 when the classification list was filed and 3rd June, 1985 when the list was approved, the assessee was clearing the goods by determining the duty himself and debiting the amount of duty in his personal ledger account.
The amount of duty paid by him was obviously provisional and subject to the result of the final approval by the officer concerned.
In these circumstances, the clearance of goods made by the appellant between 1st April and 3rd of June, 1985 were in accordance with the procedure for provisional assessment.
In such a situation clause (e) of para (B) of the Explanation under section 11 B will be attracted.
The RT 12 Return for the month of April, 1985 was filed on 8.5.1985 and the same was assessed on 29.10.1985.
It is, therefore, only from the date of this assessment that time bar in section 11 B will operate.
The refund application having been filed on 30th October, 1985 cannot, therefore, said to be time barred.
[7B D; E F]


Input:
ition (Criminal) No. 1 45 1 of 1985.
(Under Article 32 of the Constitution of India. ) R.K. Jain and Yogeshwar Prasad, R.K. Khanna, R.K. Bha tt and Dalveer Bhandari for the Petitioner.
V.C. Mahajan, Tapas Ray, A.S. Nambiar, S.B. Bhasm e, Kapil Sibal, R.B. Misra, A. Subhashini, Y.P. Rao, Ms. section Janani, Ms. Urmila Kapur, D.K. Sinha, J.R. Dass, P.K. Man o har, Ms. section Vasudevan, M. Veerappa, Uma Nath, R.K. Mehta, V. Krishnamurthy, A.S. Bhasme, K.R. Nambiar, B.D Sharma, Ka i lash Vasudev, D.N. 62 Mukherjee, D. Goburdhan, Ms. Kamini Jaiswal, T.V.S.N. Char i, Mahabir Singh, Probir Chowdhry, M.N. Shroff, A. Subba Ra o, R.S. Suri, G. Probhakar, K. Ram.
Kumar, S.K. Bhattachary a, L.R. Singh, A.K. Sanghi, C.V. Subba Rao, R. Venkataraman i, Salman Khurshid, Gopal Singh, Mrs. Vimla Sinha and Mrs. H. Wahi for the Respondents.
The following Order of the Court was delivered: ORDER This writ petition filed in 1985 has been heard on different occasions and several orders and directions ha ve been made from time to time with a view to providing reli ef to delinquent children detained in jails.
On August 2 9, 1988, this Court made an order wherein so me such directions have been excerpted and it is not necessa ry to make any detailed reference to those directions now.
In 1986 the District Judges of the entire country in response to the directions made by this Court supplie d, inter alia, the particulars of under trial and convict ed children found in regular jails within their respecti ve jurisdiction.
On the basis of the said reports it was fou nd that in Assam, Bihar, Orissa, Punjab and West Bengal, t he number of such children in regular jails was 64, 247, 60, 63 and 437 respectively.
There was no such child in any regul ar jail of Gujarat but in varying numbers not exceeding 30 to 35 they were found in other States.
Thereafter some of t he States have filed affidavits indicating release from custo dy or transfer of such children from jails and have stated th at the position at present is very different and the number is either nil or negligible.
With the lapse of two years ' time since such reporti ng was done there is every likelihood of a change in th at position.
Even otherwise, in the intervening period t he Juvenile Justice Act, 53 of 1986, (hereinafter referred to as the 'Act ') has come into force in the whole of the cou n try excepting the State of Jammu & Kashmir with effect fr om 2.10.1987.
The Act provides for setting up of juveni le homes, special homes and observation homes by the Sta te Governments.
Chapter IV provides for dealing with delinque nt juveniles.
In this back drop it is necessary to get fre sh detailed reports from the District Judges and update t he figures as to the exact number of delinquent juveniles, as defined in section 2(a) of the Act, still detained in regul ar jails.
At the same time it is necessary that a report as to whether juvenile 63 Courts as required under section 5 of the Act have been set up and juvenile homes, special homes and observation homes ha ve been established as required by sections 9, 10, and 11 should be obtained.
Every District Judge is, therefore, directed by this order to report within 4 weeks from today to the Regi s try of this Court through the Registrar of the appropria te High Court as to the exact position obtaining on 28.2.
19 89 in regard to the particulars indicated above.
We would li ke to place on record that on the earlier occasion response to directions by this Court had taken more than six month s; repetitive adjournments had become necessary and complian ce was effected by indicating coercive steps.
We hope and tru st there would be no repetition.
Section 62 of the Act empowers the State Governments to make rules to carry out the purposes of the Act.
The sche me of the Act is such that it cannot be properly enforc ed unless apropriate rules are framed and brought into forc e. Counsel appearing before us for the different States are n ot in a position to make a definite statement that the Stat es they represent have framed rules and brought them in to force.
We, therefore, direct that the District Judges whi le making their reports shall also indicate whether rules ha ve been framed and whether such rules are already in forc e. Counsel appearing before us are also directed to inform t he Registry by written memorandum about the framing of rul es and bringing them into force in the respective States.
If such rules have not been framed in any State, by this ord er we direct such State or States to frame the same on or before 7th of April, 1989 and to bring them into for ce without any further delay thereafter.
Section 2(h) defines 'juvenile ' to mean: "a boy who has not attained the age of sixteen years or a girl who has not attained the age of eighteen years.
" Official reports indicate that 35 to 40 per cent of t he total population of the country would be covered by t he definition.
As such about 30 crores of young boys and gir ls come within the purview of the Act.
There can be no t wo opinions that these children of today are the citizens of tomorrow 's India and the country 's future would necessari ly depend upon their proper hygiene physical and mental.
T he problem is, therefore, gigantic; at the same time, there is demand for immediate attention.
Several counsel appeari ng before us have told us and we agree with their submissio ns that unless the importance of the matter is properly pe r ceived and the response is adequate both in 64 regard to sufficiency of actions and immediacy of attentio n, the purpose of the Act cannot be fulfilled.
Children requi re the protective umbrella of society for better growth a nd development as they are not in a position to claim the ir entitlement to attention, growing up, food, education a nd the like.
It is the responsibility of the society and is o ne of the paramount obligations of those who are in charge of governance of the country today to attend to the children to make them appropriate citizens of tomorrow.
We are of the view that in the setting indicated t he matter perhaps requires overseeing by the Court.
For coord i nation between the Union Government and the State Governme nt and between authorities within the State, at the initi al stage and it would be in the interest of children that t he matter is obverseen by this Court and when the machinery is properly geared the responsibility of overseeing may be entrusted to the respective High Courts.
With a view to working out the modality and to ma ke overseeing convenient, it is necessary that a scheme shou ld be evolved.
Counsel appearing before us have suggested th at a group of advocates should be entrusted with the work of making a draft scheme and place it before the Court for i ts consideration.
We accordingly nominate Messrs V.C. Mahaja n, Yogeshwar Prasad, R.K. Jain, Tapas Roy and Mukul Mudgal w ho are advocates appearing for some of the States to draw up a scheme and file it in the Registry of the Court by 7 th April, 1989.
As we pointed out earlier from the reports it has be en found that the number of children in regular jails were t he highest in West Bengal and Bihar.
Mr. Tapas Roy representi ng the State of West Bengal relies upon an affidavit fil ed before this Court to contend that the position has substa n tially changed subsequent to the reports and at prese nt perhaps the number of children in regular jails is eith er nil or very small.
He has personally undertaken to colle ct the particulars and furnish the same by way of the memora n dum to the Registry on or before 7th of April, 1989.
So f ar as the State of Bihar is concerned, Mr. Goburdhan is not in a position to make any statement.
From the analysis prepar ed based upon the report of the District Judges, it appea rs that there were 27 children in the District Jail of Deogar h, about 13 in the jails at Patna and 17 in the jails at Bh a galpur.
We are of the view that Mr. A.S. Nambiar, Sr.
Adv o cate of this Court should be appointed as Commissioner to visit these jails in the three districts of Bihar and co l lect the necessary particulars of juvenile delinquents 65 housed in those jails and report to this Court on or befo re 7th of April, 1989.
He shall be provided all facilities by the State Government and its officers as may be deem ed reasonable and necessary for implementing this direction.
He shall also be entitled to reimbursement of his expenses.
It becomes necessary that the Registry should ha ve appropriate funds to meet the expenses from time to tim e. We, therefore, direct that the Union of India shall depos it a sum of Rs.50,000 while each of the States of Bihar a nd West Bengal and Uttar Pradesh is directed to deposit a s um of Rs. 15,000.
Such deposits shall be made on or before 15 th of April, 1989.
The expenses have of course to be met by a ll the States but in due course an order directing other Stat es to pay to the fund and final apportionment, if necessar y, shall be ordered.
Notice be issued to the learned Attorney General to appear and assist the Court in this proceeding.
The directions indicated above must be worked out with in the time frame as we are fixing the case for further heari ng at 2.00 P.M. on 24th of April, 1989.

Output:
Pursuant to the directions made by the Supreme Cour t, with a view to providing relief to delinquent childr en detained in jails, in 1986 the District Judges of the enti re country supplied the particulars of under trial and convic t ed children found in regular jails within their jurisdi c tion.
With the passage of time and the coming into force of the Juvenile Justice Act, 1986 it became necessary to g et fresh detailed reports for updating the information.
The Supreme Court issued directions and, HELD: 1.
Children require the protective umbrella of society for better growth and development as they are not in a position to claim their entitlement to attention, growi ng up, food, education and the like.
It is the responsibili ty of the society and is one of the paramount obligations of those who are in charge of governance of the country tod ay to attend to the children to make them appropriate citize ns of tomorrow.
[64A B] 2.
Every District Judge is directed to report to th is Court the figures as to the exact number of delinque nt juveniles still detained in regular jails and whether juv e nile courts, juvenile homes, special homes and observatio ns homes as provied in the Juvenile Justice Act, 1986 have be en established.
[62H; 63A] 61 2.1 A Senior Advocate of this Court is appointed as Commissioner to visit the jails in the three Districts of the State of Bihar, viz. Deogarh, Patna and Bhagalpur a nd collect the necessary particulars of juvenile delinquen ts housed in those jails and report to this Court.
He shall be provided all facilities by the State Government and sha ll also be entitled to reimbursement of his expense section [64H;65A B] 3.
Section 62 of the Juvenile Justice Act, 1986 empowe rs the State Government to make rules to carry out the purpos es of the Act.
The scheme of the Act is such that it cannot be properly enforced unless appropriate rules are framed a nd brought into force.
The District Judges while making the ir reports shall also indicate whether rules have been fram ed and whether such rules are already in force.
Counsel for t he respective States are directed to inform this Court by written Memorandum about the framing of rules and bringi ng them into force in the respective States.
If such rul es have not been framed in any State, such State or States a re directed to frame the same and bring them into force witho ut any further delay.
[63C E] 4.
For facilitating the monitoring of the implementati on of the Juvenile Justice Act, 1986, a group of nominat ed advocates is entrusted with the work of making a dra ft Scheme and placing it before the Court for its consider a tion.
[64D E] 5.
The Registry of this Court should have appropria te funds to meet the expenses from time to time.
The Union of India is directed to deposit a sum of Rs.50,000 while ea ch of the States of Bihar and West Bengal and Uttar Pradesh is directed to deposit a sum of Rs.15,000.
[65B C]