9911796707
|
Home
Issues Involved:
1. Legislative competence of the Union Parliament regarding Section 34(1)(c) of the Estate Duty Act. 2. Violation of Article 19(1)(f) of the Constitution by Section 34(1)(c) of the Estate Duty Act. 3. Violation of Article 14 of the Constitution by Section 34(1)(c) of the Estate Duty Act. Issue-Wise Detailed Analysis: 1. Legislative Competence of the Union Parliament: The petitioners initially challenged Section 34(1)(c) of the Estate Duty Act on the grounds that it was beyond the legislative competence of the Union Parliament. However, this argument was not pursued by the petitioners' counsel, and the court found no merit in this contention. The judgment states, "We are of the opinion that the contention of the petitioners that section 34(1)(c) was beyond the legislative competence of the Union Parliament, which was not rightly pursued, has absolutely no merit and we have no hesitation in rejecting the same." 2. Violation of Article 19(1)(f) of the Constitution: The petitioners also challenged Section 34(1)(c) based on Article 19(1)(f) of the Constitution. However, this article was deleted from the Constitution by the 44th Amendment Act, 1978. The court noted, "With the deletion of article 19(1)(f) of the Constitution from June 20, 1979, by the 44th Amendment of the Constitution, the challenge based on that provision is no longer available. Even otherwise, article 19(1)(f) did not guarantee any immunity from taxation." Therefore, this challenge was dismissed. 3. Violation of Article 14 of the Constitution: The primary issue remaining was whether Section 34(1)(c) violated Article 14 of the Constitution, which forbids class legislation but allows reasonable classification for legislative purposes. The petitioners argued that the provision discriminated against undivided coparceners in a Mitakshara joint family by subjecting them to higher estate duty compared to those who had divided prior to their death. They contended, "There is no reasonable nexus between the object of the statute and the levy of the duty on the principle of aggregation." The court examined this contention in detail. It referred to the Supreme Court's principles on Article 14 and reasonable classification, noting, "In order to pass the test of permissible classification, two conditions must be fulfilled, namely, (i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group, and (ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question." The court also reviewed the history and objectives of the Estate Duty Act and its amendments. It noted that the aggregation for rate purposes was a common feature in taxation laws and was justified by the peculiarities of the Hindu undivided family system under Mitakshara law. The court stated, "Aggregation for rate purposes and consequent provision for a higher levy is nothing new or novel and is a familiar tool of the taxman." The court disagreed with the Madras High Court's decision in Devaki Ammal's case, which had struck down Section 34(1)(c) as unconstitutional. Instead, it followed the reasoning of other High Courts and the Supreme Court, which had upheld similar provisions. The court concluded, "On an independent examination itself, we are of the view that section 34(1)(c) is not violative of article 14 of the Constitution." Conclusion: The court dismissed the writ petitions, upholding the validity of Section 34(1)(c) of the Estate Duty Act. It found no merit in the challenges based on legislative competence and Article 19(1)(f) of the Constitution. The challenge based on Article 14 was also rejected, with the court concluding that the provision did not violate the principle of equality. The court granted a certificate of fitness to appeal to the Supreme Court, recognizing the substantial question of law and the difference of opinion among various High Courts. The judgment states, "We accordingly grant a certificate of fitness to appeal to the Hon'ble Supreme Court under articles 133(1) and 134A of the Constitution to the petitioners and direct the Registrar to issue them the necessary certificate with expedition."
|
