1967 (11) TMI 18

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....rs of the Hindu undivided family and consequently void and unenforceable ? The question referred is a composite one. When the case was stated, the Tribunal presumably acted on the dictum laid down by the Judicial Committee of the Privy Council in Raleigh Investment Co. Ltd. v. Governor-General in Council, namely, the Act contained effective machinery for the review of the assessment on grounds of law, including the question whether a provision of the Act was, ultra vires. Their Lordships of the Supreme Court have, however, departed from that view in K. S. Venkataraman & Co. (P.) Ltd. v. State of Madras. The law now is that a tribunal, which is a creature of a statute, cannot question the vires of the provisions under which it function....

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....e contention. It is now well-settled that although a taxation law cannot claim immunity from the equality clause of the Constitution, nevertheless, the legislature is competent to " classify " persons or properties into different categories and tax them differently (see Raja Jagannath Baksh Singh v. State of Uttar Pradesh). It follows, as necessary corollary, that if the classification thus made is rational, the taxing statute cannot be challenged merely because different rates are prescribed for different categories of persons or subjects. There is a rational classification of wealthy assessees into three distinct categories " individuals, Hindu undivided family and company ", and they are taxed differently because they are different....

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....ndividual is mitigated by special provisions granting a higher ceiling of deduction on account of insurance premia and by a larger initial margin of income exempt from income-tax. The Wealth-tax Act follows the same pattern and the rigours of a higher burden of wealth-tax is mitigated by a larger initial margin of wealth being made exempt from the payment of tax. When different classes of different taxpayers are subjected to different systems of tax in connection with a single type of tax, it cannot be said that the tax manifests a difference in treatment. The charge that a Hindu undivided family has been picked out for hostile discrimination does not appear to be correct. Other groups of individuals are taxed as " individuals " and the ....