Judgment

HEGDE, J.:- This appeal by certificate arises from the decision of the High Court of Patna in a reference under Section 27 (1) of the Wealth Tax Act, 1957 (which we shall hereafter refer to as the Act). The question of law arising for decision in these appeals is :-

"Whether in the facts and circumstances of the case, the trustee under the Trust deed dated 19th July, 1949 executed by Kripashankar D. Worah was assessable to wealth tax under Section 21 of the Wealth Tax Act?"

2. The tribunal upheld the contention of the Revenue that the trustee is liable to be proceeded against under Section 21 of the Act but the High Court disagreeing with the view taken by the tribunal answered the question referred to it in the negative. Hence this appeal.

3. The facts of the case as set out in the statement of the case submitted to the High Court may now be briefly stated: The respondent Kirpashanker D. Worah by means of a deed of trust dated July 19, 1949 transferred certain shares described in Schedule 7 of the trust deed and certain immovable properties and shares in business described in Schedule 8 of that deed unto himself as the trustee for making provision for the maintenance of himself, his wife, for the maintenance, education and the marriage expenses of his unmarried daughters and for the maintenance and education expenses of his minor sons. The main purpose of the trust is set out in paragraph 3 of the objects of the trust. That paragraph reads:-

"To apply the income of the Trust Estate for the maintenance and the joint use and benefit of the Settlor and his wife the said Srimati Kanchan Kunver and also for the maintenance, education and marriage expenses of the said two minor daughters Kumari Kumud Bala and Kumari Jyoti and also for the maintenance and education of the Settlor s minor sons Harsukhari Worah and Chanderakant Worah: Provided always that if the income of the Trust Estate is insufficient for the purpose of meeting any of the said expenses the Trustee shall have full liberty to dispose of or otherwise apply sufficient portion of the corpus of the Trust Estate for the purpose of discharging the Trust contained in this clause."

4. Sub-paragraph 4 of the Trust deed provides that in the event of the Settlor predeceasing his wife, the shares and securities mentioned in Schedule 7 was to be made over to his wife to be enjoyed by her as her absolute property, provided that if the Settlor predeceased his wife before the marriages of the two unmarried daughters had been performed, the trustee was to retain out of the shares and securities mentioned in the said Schedule sufficient number of shares for the purpose of meeting the marriage expenses of the said two daughters or either of them as the case may be. Sub-paragraph (5) provides that after the marriages of both the daughters and/or after the death of both of such daughters, whichever happens first and also after the death of the Settlor s wife and the attainment of majority of both the minor sons, the trustee was to hold the Trust Estate for the absolute use and benefit of the two said sons, Harsukhari and Chandrakant. It was further provided that the intention of the Settlor was that subject to the trust thereby created the said two minor sons would take a vested interest in the trust estate. Under Clause (4) of the said deed provision was made for the residence of the Settlor, his wife and the minor children free of rent in a part of the trust properties described in Sch. 8 until the determination of the trust as aforesaid. Even before the first valuation date with which we are concerned in these appeals, both the daughters had been married and the two sons had attained majority. The reference relates to wealth tax assessment of the assessee for the assessment years 1957-58, 1958-59, 1959-60 and 1960-61, the corresponding valuation dates being 2-11-1956, 23-11-1957, 11-11-1958 and 31-10-1959.

5. The department has assessed the respondent in respect of the wealth tax du