The Wealth-tax Act, 1957 was held to be valid, and the court rejected the contention of discrimination against Hindu undivided families, stating that non-Hindu undivided families were also liable to be taxed as individuals.

Hegde, J.—These petitions are connected. One Sarjerao Appasaheb Shitole has filed both these petitions. He is the karta of his family. As karta of his family, he has been assessed to wealth-tax for the assessment years 1958-59 and 1959-60. In pursuance of the afore-mentioned assessments, two demand notices for the two assessment years mentioned above have been issued to him on October 24, 1962. In these petitions, he prays that this court may be pleased to call for the assessment proceedings in question and quash the demand notices issued to him by issuing writs of certiorari or such other writs or orders or directions as we deem fit.

2. Sri B.V. Krishnaswami Rao, the learned counsel for the assessee, in the course of his arguments, attacked the impugned notices on three different grounds. They are :

(i) Wealth-tax on lands and buildings is ultra vires of the powers of Parliament;

(ii) Under any circumstance, Parliament could not have imposed wealth-tax on undivided families; and

(iii) the Wealth-tax Act, 1957 (27 of 1957), (to be hereinafter referred to as the "Act") is violative of article 14 of the Constitution in so far as it provides for the levy of tax on Hindu undivided families only and as such is liable to be struck down.

3. Before proceeding to consider the points formulated above, it is necessary to mention that according to the assessee, in the above proceedings wealth-tax has been levied on non-agricultural lands and buildings. This contention of the assessee has not been controverted by the revenue. We may now proceed to consider the validity of the contentions advanced on behalf of the assessee.

4. This court upheld the vires of the "Act" as such in W.P. No. 256 of 1959 in G.M. Gopalkrishna v. Wealth-tax Officer. But in that case the court was not called upon to consider the special facts put forward now. Therefore, that decision is not relevant for our present purpose as it does not bear on the points which arise for determination in these cases.

5. Dealing with the first point, Sri B.V. Krishnaswami Rao, urged that entry 86 of List I of the Seventh Schedule must be read subject to entry 49 of List II of the Seventh Schedule; if so read, it would be seen that Parliament cannot impose any tax on "lands and buildings" as that field is reserved for the State by entry 49 of List II of the Seventh Schedule. This question was considered by us in Krishna Rao L. Balekai v. Third Wealth-tax Officer, City Circle I, Bangalore, wherein myself, speaking for the Bench, observed that the "Act" is not ultra vires of the Central Legislature in so far as it relates to non-agricultural lands, as the same, for the purpose of Wealth-tax, falls within entry 86 of List I of the Seventh Schedule to the Constitution. In the present case, as in Balekai's case, assistance was tried to be taken from the decision of this court in D.H. Hazareth v. Gift-tax Officer. But the contention based on that case was rejected with these observation :

"We do not think that any support is available from that decision for the contention advanced on behalf of the petitioner. In that case this court had to consider whether Parliament was competent to enact the Gift-tax Act. Therein, it was conceded that there was no specific entry in List I authorising or empowering Parliament to enact the Gift-tax Act. The question for decision was whether the Gift-tax Act could be justified on the basis of the residuary powers. This court came to the conclusion that so far as "lands and buildings" are concerned, the legislative power to levy gift-tax vests with the State Legislature and, therefore, Parliament was not competent to enact the Gift-tax Act under the residuary powers. The ratio of that decision is not applicable to the facts of the present case."

6. Court have repeatedly laid down that every entry in the three Lists should be considered as a field of legislative : those entries must be given the widest possible connotation. Entry 86 of List I of Schedule VII r