1968 (10) TMI 40 - HC - Income Tax

High Court affirms Estate Duty Act provision validity for equitable taxation & prevents discrimination

The High Court of Madras upheld the application of section 34(1)(c) of the Estate Duty Act, 1953, in a case involving the devolution of assets of a ... Estate Duty Act, 1953 - Whether the Asst. Controller of Estate Duty was wrong in applying section 34(1)(c) to the case of Dayabhaga family - held that there is no discrimination whatever brought about by s. 34(1)(c) between members of a Mitakshara joint Hindu family and of a Dayabhaga family in the matter of application of rates of taxation - petition to quash the order, is dismissed Issues:1. Application of section 34(1)(c) of the Estate Duty Act, 1953 to the case.2. Constitutionality of section 34(1)(c) in relation to article 14 of the Constitution.Analysis:The judgment delivered by the High Court of Madras involved the case of a deceased individual leaving behind family members and the application of the Estate Duty Act, 1953. The petitioner, one of the sons of the deceased, challenged the provisional order made by the Assistant Controller of Estate Duty, Coimbatore, under section 57 of the Act. The petitioner sought to quash the order, arguing that the respondent erred in applying section 34(1)(c) to the case. The petitioner contended that the devolution of assets should be by succession rather than survivorship based on the Hindu Succession Act, 1936. The court held that such questions fall within the competence of the respondent to decide, and the petitioner could raise these issues during the subsequent stages of the proceedings under the Act. The court emphasized that matters under the Act should be dealt with through the remedies provided within the framework of the legislation, and declined to intervene at this stage.Regarding the constitutionality of section 34(1)(c) in relation to article 14 of the Constitution, the petitioner argued that the provision was discriminatory as it applied the principle of aggregation differently to joint Hindu families governed by Mitakshara law and Dayabhaga law. The court explained that the principle of aggregation in section 34(1)(c) aimed to prevent discrimination and ensure equitable taxation. It highlighted the distinction between the rights of descendants in Mitakshara joint families and Dayabhaga families upon the death of a member. The court illustrated that aggregation of benefits under section 34(1)(c) ensured uniformity in taxation treatment between the two types of Hindu families. Ultimately, the court dismissed the writ petition challenging the application of section 34(1)(c) and upheld its constitutionality, emphasizing that there was no discrimination between members of Mitakshara joint Hindu families and Dayabhaga families in the context of taxation rates. The petition was dismissed without costs.