Ramaswami Iyengar, V. V. Attorney General

1953 Present: Gratiaen J. and Gunasekara J.

V. RAMASWAMI IYENGAR et al. (Administrators of the Estate in

Ceylon of Em.  Ar . Ar. Rm. Arunachalam Chettiar, deceased), and

 ATTORNEY-GENERAL, Respondent.

S. C. 236-D. C. Colombo 38 (Special)
 

Estate Duty-Hindu undivided family-Death of sole surviving " co-parcenary member" -Liability of estate for estate duty-Estate Duty Ordinance (Cap. 187), ss. 6 and 73, as amended by Ordinance No. 76 of 1938, s. 5.

The sole surviving " co-parcenary member " of a Mitakshara Hindu undivided family died in February, 1938, leaving no male issue in existence. His son shad predeceased him, and the actual survivors of the family were all females and included his widow.

Adopting the ratio decidendi in Attorney-General v. Ramaswami Iyengar (55 N. L. R. 481) and following it to its logical conclusion

Held, that all the property which was in the possession of the deceased at the time of his death was the joint property of the undivided family. Although the deceased had been " competent to dispose " of the joint property after his son's death, and although the joint property would, for that reason, normally be deemed to have "passed" on his death within the meaning of section 6 of the Estate Duty Ordinance so as to attract estate duty, the exempting provisions of section 73 protected the property from taxation.

APPEAL from a judgment of the District Court, Colombo.

H. V. Perera, Q .C., with S. J. V. Chelvanayakam, Q. C. Peri Sunderam and S. Sharvananda, for the appellants.

Walter Jayawardena, Crown Counsel, with V. Tennekoon and G. F. Sethukavaler, Crown Counsel, for the respondent.

Cur. adv. vult.

October 12, 1953. GRATIAEN J.

This is an appeal against a judgment of the District Judge of Colombo upholding an assessment made by the Commissioner of Estate Duty under the provisions of the Estate Duty Ordinance (Cap. 187) in respect of the estate of a person who has been conveniently described throughout the proceedings as " Arunachalam Chettiar (snr.) ". He died on 23rd February 1938 shortly after the Ordinance came into operation, and was the father of Arunachalam Chettiar (jnr.) in connection with whose estate a separate assessment had been made under the provisions of the earlier Ordinance, No. 8 of 1919 (vide the proceedings in S. C. 235 of 1951/D. C. Colombo 37 Special*[ See page 481 (supra).-Ed.]). The assessees in each case were the administrators of the estate of Arunachalam Chettiar (snr.). They appealed against both assessments and, by agreement of parties, the relevant evidence, which overlapped to a considerable extent, was recorded in consolidated proceedings in the Court below.

During Arunachalam (jnr.) 's lifetime, i.e., until 9th July 1934, he and his father were the only " co-parcenary members " of an undivided family which, regarded as an entity, owned considerable " joint property " in various countries including Ceylon. We have already held that no part of that property had actually or even notionally " passed " upon the son's death to his father so as to attract duty under the provisions of Ordinance, No. 8 of 1919. The basis of our decision, shortly stated, was that, under the Mitakshara law, the joint property belonged to the entire family group to the exclusion of its individual members.

The earlier Ordinance did not make express provision for the case of joint property belonging to a Hindu undivided family in relation to the

question whether estate duty is payable upon the death of one of its members. In the Ordinance passed in 1938 (Cap. 187), however, which is concerned with the estates of persons dying on and after 1st April 1937, section 73, as originally enacted, declared as follows :

" Where a member of a Hindu undivided family dies, no estate duty-shall be payable on any property proved to the satisfaction of the Commissioner to be the joint property of that Hindu undi

Click Here to Read the rest of this document