Fiscal classification under the Expenditure-tax Act was upheld as a reasonable distinction, not an Article 14 violation.

The Expenditure-tax Act's classification of a Hindu undivided family as a separate taxable unit was upheld against an Article 14 challenge. Fiscal legislation permits wide legislative discretion in selecting taxable persons and drawing distinctions, so long as the classification is not arbitrary and has a reasonable relation to the statutory object. A Hindu family governed by marumakkattayam law continued to fall within the statutory description, while Mappilla undivided families in North Malabar were treated differently because of their distinct statutory history, smaller numerical strength, and consistent legislative practice. The fact that Parliament could have extended the same treatment to Mappilla families did not render the existing classification unconstitutional.

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Issues: Whether the charging provision of the Expenditure-tax Act, 1957, offended Article 14 of the Constitution by taxing a Hindu undivided family governed by marumakkattayam law as a distinct unit while not extending the same treatment to Mappilla undivided families governed by the same customary law.

Analysis: The classification was tested on the settled principles applicable to fiscal legislation, under which the State has wide latitude to choose taxable persons and fix different rates, provided the distinction is not arbitrary and bears a reasonable basis to the object of the law. The Act treated a Hindu undivided family as a unit of taxation, and a Hindu family governed by marumakkattayam law continued to fall within that description. The position of Mappilla families in North Malabar was materially different in view of their separate statutory history, smaller numerical strength, and the long legislative practice of treating them differently for taxing purposes. The mere fact that Parliament could have extended the same treatment to them did not make the actual classification unconstitutional.

Conclusion: The impugned classification was held to be valid and not violative of Article 14; the challenge failed.

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