TaxTMI 
TaxTMI 
1961 (1) TMI 98
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Madras Act XVII of 1939, with the result that the late Kunhamina as well as other members of the tarwad had no rights to claim a share in the tarwad properties. Thereupon, the Assistant Controller of Estate Duty called upon the petitioner to produce the record relating to the registration of the tarwad as impartible. This was apparently done. Thereafter, the Assistant Controller, seeking to examine the contention that on the death of a member of a tarwad registered as impartible, as stated above, no share in the tarwad properties passed to any other member, posted the case for hearing and directed the petitioner to appear before him. Owing to various reasons an enquiry was not conducted, and finally, on January 4, 1957, the Assistant Controller wrote to the petitioner to this effect: "I am not prepared to accept your contention that in the circumstances stated by you the deceased was not entitled to a share in the tarwad properties at the time of the her death. Even though the tarwad was registered as impartible estate under the provisions of the Moplah Marumakkattayam Act, it cannot be said that the members of the tarwad were deprived of their shares in the tarwad properti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....writ of prohibition should issue to restrain the respondent from taking any further proceedings under the Act. The contention of the petitioner broadly stated is that the incident upon which duty becomes chargeable under the Act, viz., the passing of property on the death of a person dying after the commencement of this Act, has not happened in this case. It is claimed that Kunhamina under the Marumakkattayam law governing such tarwads, has been specifically made impartible by an order of the Collector made under section 20(1) of the Moplah Marumakkattayam Act(Madras Act XVII of 1939). A member of a Moplah tarwad governed by the Marumakkattayam law was at no time entitled to partition as a matter of right, and that position has been statutorily confirmed in certain proceedings taken by the members of a Moplah tarwad in this particular case under the above said Act. The claim proceeds that the late Kunhamina, accordingly, never possessed a share in the properties, either factual or notional, a share which could pass on her death to other persons. The next argument is that no member of a tarwad is competent to dispose of the tarwad property. On these contentions the applicability of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....need for the common consent of all members of the tarwad was thus statutorily done away with, and for the first time a right was created whereby an individual members of the tarwad could claim partition and obtain his or her share of the properties therein. This act also codified the other features relating to the Moplah tarwad, its management by the Karnavan, the rights and duties of the karnavan, the prohibition against alienations and the like. The right of a junior member to sue the karnavan for malfeasance, neglect of duty, misappropriation and even for his removal was also recognised by section 11 of the Act. Chapter III of the Act provided for partition of tarwad property and, as has been stated earlier, every individual member of the tarwad was given such a right. In order, however, to maintain the family as an impartible unit, where the members desired to have it so, section 20 provided that if within a year after the passing of the Act, not less than, two-thirds of the major members of the tarwad presented a petition to the Collector to have the tarwad registered as impartible, it could be so registered, and on such registration, the provisions of Chapter III relating to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eeing to have such a partition. Even if this bundle of rights of a junior member is "the property" which he possesses in the sense of an interest in the property of the tarwad, obviously, such rights as these are individual and personal to a member of the tarwad, and it is not this bundle of rights which could pass on the death of that member. It seems to us, therefore, that the liability to estate duty in a case of this kind does not fall to be considered under section 5 of the Estate Duty Act. Not only does the definition of "tarwad" in the Act indicate that all the members have community of property; but section 13 of the Madras Act which provides for a partition refers to the properties as those over which the "tarwad" has power of disposal. That this is the real position has been recognised in numerous decisions. In Chakkra Kannan v. Kunhi Pokker 1916] I.L.R. 39 Mad 317, Srinivasa Ayyangar J. observed [1916] I.L.R. 39 Mad 317: "In India it is not uncommon for groups of person though not incorporated to hold properties as if they were corporate entities. Castes and sub-castes hold property as such, so also village communities. But the more c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere being no right of compulsory partition and therefore no right to have the interest separated for separate enjoyment. Nevertheless, the interest is proprietary and a vested interest though joint." These authorities, in addition to the provisions of the Marumakkattayam Act referred to and the extract from the treatise of Sundaram Iyer, clearly establish that an individual member of an impartible tarwad has no doubt an interest in the property in the sense of his being entitled to certain benefits arising from the property. He has no share therein. Nor can his interest be equated to one of ownership over the whole of the tarwad property which can be said to pass on his death. Indeed, it is difficult to see how in such incident there can be any passing at all. In Nevill v. Commissioners of Inland Revenue [1924] A.C. 385; 2 E.D.C. 219 (H.L.)., the provisions of the United Kingdom Finance Act of 1894 were considered. This act also deals with estate duty, and Haldane L.C. observed that "passes" may be taken as meaning "changing of hands". If the property is owned by the tarwad and this tarwad has the power of disposal over the property the death of a single m....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., her interest in the property ceased, and in such an even section 7 of the Act provides for the levy of estate duty, on such interest ceasing on the death of the deceased, it being deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the cessor of such interest. The first part of the section is in these terms: "7. (1) Subject to the provisions of this section, property in which the deceased or any other person had an interest ceasing on the death of the deceased shall be deemed to pass on the deceased's death to the extent to which a benefit accrues or arises by the cesser of such interest... Had this section stopped there, there would perhaps be very little scope for the argument that on the death of a person who forms a member of a family, of the nature we have earlier described, the cesser of the interest which the deceased person had in the property would by the very cesser thereof result in an enhancement or the enlargement of the benefits of the other members of the family in those properties and a benefit could therefore be held to accrue or arise by reason of the cesser of the interest of the deceased person. But the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a joint family. Sub-sections (2) is however more general, and would appear to apply even to cases of Moplah tarwads. It reads: "The value of the benefit accruing or arising from the cesser of an interest in the property of a tarwad of tavazhi governed by the Marumakkattayam rule of inheritance or of a kutumba or kavaru governed by the Aliyasanthana rule of inheritance which ceases on the death of a member thereof shall be the principal value of the share in the property of the tarwad or tavazhi or, as the case may be, the kutumba or kavaru which would have been allotted to the deceased had a partition taken place immediately before his death." It is however the petitioner's case that this provision cannot lead to the conclusion that a Moplah tarwad comes within its scope. That according to him should still be determined on the basis of a proper interpretation of section 7(1). As we have said, the attempt on the part of learned counsel for the petitioner is to establish that the latter part of section 7(1) which reads "including in particular, a coparcenary interest in the joint family property of a Hindu family..." is only intended to bring in a coparcenar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of science and art, colleges and school, or to hospitals, orphan, lunatic, or benevolent asylums, dispensaries." Lord Watson said [1899] A.C. 99, 105 (P.C.).: "The word 'include' is very generally used in interpretation clauses in order to enlarge the meaning or words or phrases occurring in the body of the stature; and when it is so used these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include. But the word 'include' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to shew that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined. It may be equivalent to 'mean and include,' and in that case it may afford an exhaustive explanation of the meaning which, for the purposes of the Act, must invariably be attached to these words or expressions." Learned counsel for the petitioner seeks to attach to the expression "including" occurring in section 7(1) of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pect to all or any of the following matter..." and proceeded to specify a list of items with respect to which rules could be made. The learned judge, referring to the rule of construction laid down by the House of Lords in Earl Fitzwilliam's Wentworth Estate Co. v. Minister of Housing and Local Government [1952] A.C. 362, 383 (H.L.)., concluded that the particularisation of the matters contained in section 68(2) of the Act was only intended to make it clear that the items enumerated therein do not limit or otherwise control the power conferred by section 68(1) and that the enumeration is section 68(2) only amounted to a statutory recognition that all of those items are within the scope of the generality of the power conferred by section 68(1) of the Act. This decision fully supports the view that we have taken, viz., that in particularising interests of a special character. the legislature was not confining the operation of the section to those particular matters. The interpretation placed upon the expression "includes" in Dilworth v. Commissioner for Land and Income Tax [1899] A.C. 99 (P.C.). has been followed in Mellows v. Law [1923] 1 K.B. 522, where McCardie....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to section 2 where by a statutory fiction property is deemed to pass. This view was differed from by Viscount Simonds in the later decision. Though we have held in the view we have taken that the present case falls squarely within the scope of section 7(1) and not under section 5, since the argument has been advanced on behalf of the revenue, we have thought it necessary to refer to it. Considerable reliance has been placed by the learned counsel for the petitioner an the fact that this joint family is impartible. Impartibility can however be no test whatsoever for the reason that the section itself does not in terms exclude interests in joint family properties which are by custom or by law rendered impartible. It is true that a coparcenary interest in the partible joint family property of a Hindu family is not the same as the interest of a member of a tarwad governed by the Marumakkattayam law of inheritance the property of which is impartible either by custom or under law. But the interest of the members in the family except as regards the right to demand a partition is in no way different under the two rules of inheritance. A point almost similar in its scope arose in Attorney....
X X X X Extracts X X X X
X X X X Extracts X X X X
....interest may be capable of define appraisal, an inchoate interest in a case where the member is not entitled to partition may be of a lesser value. But that, as we have said, cannot be taken as denying the existence of any interest whatsoever in a member of such family. The very fact that all the members of a tarwad have a community of property leads to the irresistible conclusion that each and every member has an interest in such property. It has next been contended that apart from the fact that in a case of this kind there is no passing of property, whether factual or by the deeming provision, there is in any event no benefit which accrues or arises by the cesser of the interest owned by a member of the tarwad. The right which a member of the tarwad possesses is undoubtedly an interest in property. It has been held in Govindan v. Kunhappu A.I.R. 1936 Mad. 917 that " the right of a junior member to a maintenance from the income of the properties of the tarwad is an incident of co-proprietorship in the property of the tarwad. It has been held to an assignable and transferable interest. Therefore it seems to me that such interest can be relinquished." This decision id not....