1981 Supreme(SC) 240

SUPREME COURT OF INDIA
V.D. TULZAPURKAR AND E.S. VENKATARAMIAH, JJ.
The Wealth-tax Officer, Calicut, Appellant
Versus
C.K. Mammed Kayi (since deceased) through his L. Rs. Shri T. M. Pocker and others, Respondents.
Civil Appeal No. 1543 of 1971, D/- 7-4-1981.
Advocates appeared
Mr. B.B. Ahuja and Miss A Subhashini, Advocates, for Appellant; Mr. G.C. Sharma, Sr. Advocate; (M/s. E.D. Helmes, S.P. Nayar and R.S. Sharma, Advocates with him), for Respondents.

Headnote:

Mapilla Marumakkathayam Act, 1939 - Section 20 - Wealth-tax Act 1957 - Section 3,5(1)(ii) - General Clauses Act, 1897 – Section 13(2) - Constitution of India,1950 – Article 14 - Challenge – Quashing of Order - Whether Mapilla Marumakkathayam Tarwads of North Malabar - Muslim undivided families governed by Marumakkathayam Act (Madras Act 17 of 1939) - fall within expression individual and are assessable to tax under S. 3 of Wealth-tax Act 1957? - Respondent was the karnavan of a Mapilla Marumakkathayam Tarwad registered as impartible within meaning of S. 20 (1) of Mapilla Marumakkathayam Act (Madras Act 17 of 1939) - He was assessed to Wealth-tax for assessment year 1957-58 on net wealth of his Tarwad considered as an individual under S. 3 of Wealth-tax Act, 1957 and on completion of assessment a demand notice was served on him for payment - On September 1958 he filed a writ petition being of 1958 seeking to quash said assessment and the demand notice on ground of unconstitutionality of Wealth-tax Act No. 27 of 1957 - Four other writ petitions were also filed by karnavans of Hindu undivided families of Malabar and Cochin governed by the Madras Marumakkathayam Act 1923 challenging constitutionality of Act - Since common questions of law arose for determination High Court disposed of writ petitions by a common judgment - Constitutionality of Act was challenged on two grounds- (a) that Parliament was not competent to include a Hindu undivided family in charging S. 3 of Act in view of Entry 86 in List I of the Seventh Schedule of Constitution and (b) that charging S. 3 of Act was violative of Art. 14 of Constitution - High Court repelled first ground of challenge and held that Parliament was competent to include a Hindu undivided family in S. 3 of Act as constituting a body or group of individuals coming within term individuals in Entry 86, but accepted latter ground of challenge by its judgment rendered on July, 1, 1951 - It took view that there was discrimination as between Hindu undivided families and Muslim Mapilla Tarwads which were also undivided families and, therefore, the charging section in so far as it governed undivided families was hit by Art. 14 - Whether Art. 14 applied to cases or not after giving parties opportunity of putting forward their respective cases supported by facts and figures - Whether S. 3 of that Act was violative of Art. 14 of Constitution because a Hindu undivided family (specifically mentioned as a distinct assessing unit) governed by the Marumakkathayam Law had to pay tax at a higher rate by reason of the amalgamation of the expenditure of all members of family whereas a Mapilla undivided family was required to pay tax at a lower rate since the members of such family governed by Marumakkathayam Law were liable to be taxed as individuals under section and this Court answered the question in he negative – Held, Court would like to point out that aforesaid construction would be in accord with legislative practice obtaining in taxing scheme in country whereunder Parliament has always been treating and assessing Mapilla Marumakkathayam Tarwads in status of individual under various taxing statutes - In a case arising under the Expenditure Tax Act question for determination was whether S. 3 of that Act was violative of Art. 14 of Constitution because a Hindu undivided family (specifically mentioned as a distinct assessing unit) governed by Marumakkathayam Law had to pay tax at a higher rate by reason of amalgamation of the expenditure of all members of family whereas a Mapilla undivided family was required to pay tax at a lower rate since members of such family governed by the Marumakkathayam Law were liable to be taxed as individuals under section and this Court answered question in negative - It is therefore clear that because expression individual occurring in Entry 86 of List I of Seventh Schedule to Constitution takes within its ambit a Hindu undivided family it would not automatically follow that term individual occurring in S. 3 of Wealth-tax Act 1957 would include a non-Hindu undivided family like a Mapilla Marumakkathayam Tarwad but question will have to be considered in light of the scheme of Wealth-tax Act itself - Enactment is intended to provide for levy of wealth-tax general scheme thereof is to assess all persons who happen to possess or earn wealth beyond a particular limit fixed by statute to wealth-tax and since the Act imposes a general tax on entire wealth of community the presumption would be of equality of incidence rather than exemption of a few - Secondly term individual under S. 13 (2) of 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 levy it cannot be disputed that Legislature can select person properties transactions and objects for 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 assesssable units namely individual Hindu undivided family and company (which was later omitted) have come to be specified in S. 3 - Appeal Allowed