Territorial limits of joint family abolition law: Kerala Act could not deny HUF status to an assessee assessed outside Kerala.

The Kerala Joint Hindu Family System (Abolition) Act, 1975 was held to operate only within Kerala and not extraterritorially to persons permanently resident and assessed in Tamil Nadu. The assessee's earlier presence in the area that later became Kerala, or ownership of Kerala property, did not affect income-tax status outside that State. The Act was therefore inapplicable, and the assessee remained assessable in the status of a Hindu undivided family.

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Issues: Whether the Kerala Joint Hindu Family System (Abolition) Act, 1975 applied to an assessee who was permanently resident and assessed in Tamil Nadu, so as to deny assessment in the status of a Hindu undivided family.

Analysis: The assessee had left the area that later became Kerala long before the enactment and had been permanently resident and assessed in Tamil Nadu. The Act was held to operate territorially within Kerala and not to govern persons outside Kerala merely because they were born there or owned some property in Kerala. The presence of Kerala properties did not alter the assessee's status for income-tax purposes outside that State.

Conclusion: The Act was inapplicable to the assessee, and the assessee was entitled to be assessed only in the status of a Hindu undivided family.

Ratio Decidendi: A State enactment abolishing the joint family system has no extraterritorial application to deny Hindu undivided family status for income-tax purposes to a person permanently domiciled and assessed outside that State.

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