TaxTMI 
TaxTMI 
1981 (4) TMI 2
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....ct 17 of 1939). He was assessed to wealth-tax for the assessment year 1957-58 on the net wealth of his tarwad considered as an individual under s. 3 of the W.T. Act, 1957 and on completion of the assessment a demand notice, dated July 16, 1958, was served on him for payment. On September 10, 1958 he filed a writ petition being 0. P. No. 674 of 1958 seeking to quash the said assessment and the demand notice on the ground of unconstitutionality of the W.T. Act, No. 27 of 1957 (hereinafter called " the Act "). Four other writ petitions were also filed by the karnavans of HUFs of Malabar and Cochin governed by the Madras Marumakkathayam Act, No. 22 of 1923, challenging the constitutionality of the Act. Since common questions of law arose for determination, the High Court disposed of the writ petitions by a common judgment. The constitutionality of the Act was challenged on two grounds -(a) that Parliament was not competent to include an HUF in the charging s. 3 of the Act in view of entry 86 in List 1 of the Seventh Schedule of the Constitution, and (b) that the charging, s. 3 of the Act was violative of art. 14 of the Constitution. The High Court repelled the first ground of challenge....
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....nt, deserved to be quashed justice Velu Pillai took the view that the legislative entries in a Constitution were to be widely and liberally construed but not the provisions of a taxing statute, that though the term " individuals " in entry 86 of List would be comprehensive enough to include a body or group of individuals like HUFS, similar construction of the expression " individual " in s. 3 of the W.T. Act so as to include non-HUFs like Mapilla Marumakkathayam tarwads was not warranted, that the term " individual " in s. 3 of the Act occurred in antithesis with the term " Hindu undivided family " and if all undivided families were included in the term " individual " there was no necessity to mention HUF as a distinct taxing unit. He, therefore, came to the conclusion that non-HUFs were not covered by the term " individual " and were, therefore, outside the charging section of the Act, but their exclusion from the charging section did not attract the vice of discrimination under art. 14 inasmuch as it had been established that there were only 22 Mapilla Marumakkathayam tarwads in the whole country and as such constituted an insignificant or microscopic minority and their exclusion....
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....learned judges repelled the challenge to the charging section based on art. 14 of the Constitution, the majority reached that conclusion by holding that Mapilla Marumakkathayam tarwads were outside the purview of s. 3 of the Act. It is this latter view which is being challenged before us by the department in this appeal. Counsel for the revenue urged two contentions in support of the appeal. In the first place, he supported the construction placed by Krishnamoorthy Iyer J., on the expression " individual " in s. 3 of the Act that it took in a body or group of individuals like a Mapilla Marumakkathayam tarwad for being assessed to wealth-tax. Secondly, he urged that such construction was in accord with the long legislative practice obtaining in the taxing scheme in the country under which Mapilla Marumakkathayam tarwads have always been treated and assessed in the status of individual a legislative practice that has been judicially noted by this court in the case of V. Venugopala Ravi Varma Rajah v. Union of India [1969] 74 ITR 49. On the other hand, counsel for the respondent assessee canvassed for our acceptance the view taken by Velu Pillai J., that the expression " individual....
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....t itself. The enactment is intended to provide for the levy of wealth-tax; the general scheme thereof is to assess all persons who happen to possess or earn wealth beyond a particular limit fixed by the statute to wealth-tax and since the Act imposes a general tax on the entire wealth of the community the presumption would be of equality of incidence rather than exemption of few. Secondly, the term " individual " under s. 13(2) of the General Clauses Act, 1897, can be read in plural and as such would include a body or group of individuals like a Mapilla tarwad. Thirdly, there is no warrant for suggesting that the two terms " individual " and " Hindu undivided family " have been used in antithesis with each other, for, s. 3 being the charging provision, is merely concerned with specifying different assessable units for purposes of assessment of wealth and imposition of the levy ; it cannot be disputed that the Legislature can select persons, properties, transactions and objects for the imposition of a levy and for that purpose classify as many different assessing units as it could reasonably think necessary and this is how three assessable units, namely, " individual ", " Hindu undi....