9911796707
|
Home
Issues Involved:
1. Constitutionality of the Wealth-tax Act, 1957. 2. Competency of Parliament under entry 86 in the Union List to impose wealth-tax on Hindu undivided families and Mappila marumakkathayam tarwads. 3. Legality of assessments made under the Wealth-tax Act. 4. Alleged discrimination against Hindu undivided families under Article 14 of the Constitution. Detailed Analysis: 1. Constitutionality of the Wealth-tax Act, 1957 The writ petitioners challenged the constitutionality of the Wealth-tax Act, 1957 and the legality of their assessments to wealth-tax. The primary contention was that Parliament lacked the competence under entry 86 in the Union List to impose a tax on the capital value of the assets of Hindu undivided families and Mappila marumakkathayam tarwads, and also on the capital value of assets that could be deemed to be made up of agricultural income. 2. Competency of Parliament under Entry 86 in the Union List Argument and Interpretation: - The petitioners argued that entry 86 in the Union List, which reads "Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies," did not authorize Parliament to tax Hindu undivided families or Mappila marumakkathayam tarwads. - It was contended that the term "individuals" in entry 86 could not reasonably include joint families or tarwads of Hindus or Mohammedans. - The court examined the pith and substance of the tax imposed by the Act, which is a levy on the capital value of assets, subject to specified inclusions and exclusions, such as agricultural lands. Judgment: - The court concluded that the wealth-tax is specifically and in substance covered by entry 86 in the Union List. The emphasis in entry 86 is on "capital value" and not on "assets." - The court held that entry 86 in the Union List confers a special legislative power that overrides the general power under entry 49 in the State List. 3. Legality of Assessments Made Under the Wealth-tax Act Specific Cases: - The petitioner in O.P. No. 674 of 1958, a karnavan of a Mappila marumakkathayam tarwad, was assessed to wealth-tax as an individual, which was contested. - The petitioner in O.P. No. 538 of 1959, a manager of a Hindu undivided family, faced reassessment proceedings under section 17 of the Act. - The petitioners in O.P. Nos. 684 and 824 of 1959, karnavans of Namboodiri illoms, contested the assessments on the grounds of partition and valuation dates. Judgment: - The court found that the term "individual" in section 3 of the Act, in juxtaposition with Hindu undivided families, does not comprehend a Hindu undivided family or a Mappila marumakkathayam tarwad. - The assessments on the petitioners in O.P. Nos. 684 and 824 of 1959 were found to be contrary to section 20 of the Act, which prescribes the procedure for the assessment of a Hindu undivided family upon partition. 4. Alleged Discrimination Against Hindu Undivided Families Under Article 14 Argument: - The petitioner in O.P. No. 684 of 1959 contended that the Act denied equal protection of the law to Hindu undivided families by subjecting them to wealth-tax while excluding other similar joint families, such as Mappila marumakkathayam tarwads. - The court considered whether there was an intelligible differentia having a rational relation to the object of the Act as the basis of such classification. Judgment: - The court concluded that the Act had singled out Hindu undivided families from other similar joint families in the country, thereby denying them equal protection of the law. - The provisions in the Act relating to Hindu undivided families were found to be severable, and to that extent, the Act was struck down. Final Orders: - The assessment of the petitioner in O.P. No. 674 of 1958 was quashed on the ground that the Act is not applicable to him. - The assessments of the petitioners in O.P. Nos. 538, 684, and 824 of 1959 and the demands on them were quashed. - The respondent in O.P. No. 1155 of 1960 was prohibited from imposing the levy and making the collection on the petitioner therein, on the ground that the provisions in the Act against Hindu undivided families violate Article 14. - All parties were ordered to bear their costs.
|
