The Attoreney General V. Valliamma Atchie

1949 Present : Wijeyewardene C.J. and Gratiaen J.

THE ATTORNEY-GENERAL, Appellant, and VALLIAMMA ATCHIE, Respondent

S. C. 512-D. C. Colombo Special 10/Testy. Case No. 8,802

Estate duty-Hindu undivided family-Recognition in Ceylon-Joint business-Not an ordinary commercial partnership-Overpayment of estate duty-Power of District Court, to order repayment-Estate Duty Ordinance (Cap. 187), sections 34, 40, 54 (2), 73.

A business carried on jointly by the members of a Hindu undivided family is presumed to be joint family property and not an ordinary commercial partnership.

For purposes of exemption from payment of estate duty, section 73 of the Estate Duty Ordinance, as amended by section 5 of Ordinance No. 76 of 1938, gives recognition in Ceylon to the law of South India by which a Hindu undivided family, as a legal persona,. may own and possess movable or immovable property.

Upon an appeal to the District Court under section 34 of the Estate Duty Ordinance, the District Court has jurisdiction to enter a decree for the repayment of money, together with legal interest, against the Crown where the assessee has been compelled to pay as estate duty a sum which he was not liable to pay.

APPEAL from a judgment of the District Court, Colombo.

One K. M. N. Natchiappa Chettiar died on December 80, 1938. The executrix of his estate was required by the Commissioner of Estate Duty to pay as estate duty the sum of Rs. 285,308.48. The District Judge, on an appeal under section 34 of the Estate Duty Ordinance, entered decree in favour of the executrix on the basis that the deceased was a member of a Hindu .undivided family and, therefore, under section 73 of the Estate Duty Ordinance, no estate duty was payable ; he held, however, that he had no jurisdiction to enter decree against the Crown for the return of the sum overpaid to the Commissioner of Estate Duty. The Crown, thereupon, appealed to the Supreme Court, and the executrix filed cross-objections.

M. F. S Pulle, K.C., Acting Attorney-General, with H. W. R. Weerasooriya, Crown Counsel, for the Crown.

H. V. Perera, K.C., with 'V. A. Kandiah and N. M. de Silva, for the executrix respondent.

Cur. adv. vult.

 June 24, 1949. GRATIAEN J.-

K. M. N. Natchiappa Chettiar died on December 30, 1938. The amount of duty payable in respect of his estate under the Estate Duty Ordinance (Chapter 187) was assessed at Rs. 290,784.12. Notice of objection to this assessment was forwarded to the Commissioner of

Estate Duty who, however, affirmed the assessment under Section 37. A petition of appeal was accordingly filed on behalf of the executrix of the estate in the District Court of Colombo, and in terms of Section 40 of the Ordinance the appeal was proceeded with as an action between the executrix and the Crown. Pending the hearing of the appeal the executrix was required to pay to the Commissioner of Estate Duty the full amount of duty claimed from the estate, and it is common ground that, certain adjustments having subsequently been made, the balance sum paid by the executrix and not since repaid to her amounts to Rs. 285,306.48.

The executrix claimed total exemption from estate duty by virtue of the provisions of Section 73 of the Ordinance, as amended by Section 5 of Ordinance No. 76 of 1938, on the ground that the deceased was a member of a Hindu undivided family, and that the property in respect of which estate duty has been assessed was not his separate property but the joint property of the undivided family of which he was a member. It was claimed in the alternative that, apart from the operation of Section 73, the property of a Hindu undivided family could not be regarded as having " passed on the death " of one of its individual members within the meaning of the Ordinance. In the view which I have taken, this alternative proposition does not require to be considered.

Certain preliminary legal

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