Attorney General V. Arunachalam Chettiar

[IN THE PRIVY COUNCIL]

1957 Present : Viscount Simonds, Lord Reid, Lord Cohen,
Lord Somervell of Harrow, and Mr. L. M. D. de Silva

THE ATTORNEY-GENERAL, Appellant, and AR. ARUNACHALAM CHETTIAR
and others (Substituted for V. Ramaswami Iyengar and another,
Administrators of the Estate of Rm. Ar. Ar. Rm. Arunachalam
Chettiar, deceased), Respondents

PRIVY COUNCIL APPEALS NOS. 16 AND 17 OF 1955 

S. C. 235 and 236-D. C. Colombo, 37 and 38 (Special)

Estate duty-Hindu undivided family-Mitahshara system-Death of a coparcener in 1934-Death of a sole surviving coparcener in 1938-Exigibility of estate duty-Nature of a coparcener's interests-Nature of a single surviving coparcener's interest-Estate Duty Ordinance, No. 8 of 1919, ss. 2 (1) and (2), 7, 8 (1) (a) (6), 17 (6)-Estate Duty Ordinance, No. 1 of 1938, s. 73 (in its unamended form).

A father and his son, who were Natukottai Chettiars governed by the Mitakshara system of Hindu law, were coparcenary members of a joint Hindu family (which had extensive trading and other interests in India, Ceylon, and other far Eastern countries. Immediately before July 9, 1934, when the son died, he and the father were the only living coparceners. On the death of the son, the father became the sole surviving coparcener of the family. But there were females also who, though they had not the rights of coparceners,  yet had rights of residence in, and maintenance out of, the joint family property.  Moreover it was competent for the surviving widow of the son to adopt a son who would thus become a coparcener with the father, and the father himself during his life and, after his death, his surviving widows had a similar power of adoption. These powers were in fact exercised after the father's death.

The son died on the 9th July, 1934. The father died on the 23rd February, 1938, shortly after the Estate Duty Ordinance No. 1 of 1938 came into operation. Both of them died in India where they were domiciled.

After the son died in 1934, assessment to estate duty was made by the Commissioner of Estate Duty, Colombo, in respect of what was described as the " Deceased's half share " of the assets of the business carried on by the family in Ceylon arid of certain other assets. It was claimed that estate duty in respect of the sop's estate was exigible either under section 7 or under section 8 (1). (a) or (6) of the Estate Duty Ordinance No. 8 of 1919. Estate duty was also claimed under the Estate Duty Ordinance No. 1 of 1938 in respect of the estate of the father after his death in 1938.

Held, in Appeal No. 16 (f) that a first principle of taxing Jaw s that its language is not to be strained to an unnatural use in order to, enlarge its scope.

(ii) that no property passed upon the death of the son within the of section 7 of the estate Duty Ordinance No. 8 of 1919. It cannot be said that a coparcener has a share of family property which " passes " on his death

(iii) that it could not be contended that the son was at or immediately before his death " competent to dispose " of a share of the Ceylon property of the undivided family. Therefore, the provisions of section 8 (1) (a) were not applicable.

(iv) that the language of the Ordinance was inept to embrace the case of the death of a coparcener. It could not be contended that there was any; property in which the son had an interest ceasing on his death within the meaning of section 8 (1) (6), read with section 17 (6).

Held further, in Appeal No. 17, (i) that the father was, at his death in 1938, a member of a Hindu undivided family the continuity of which was preserved, after his death, by the adoptions.

(ii) that, though it may be correct to speak of a single surviving coparcener as the " owner ", yet it is still correct to describe that which he owns as the joint property of the undivided family. Therefore, the exempting provisions of section 73 (in its uname

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