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Issues Involved:
1. Legislative competence of Union Parliament regarding Section 34(1)(c) of the Estate Duty Act. 2. Validity of Section 34(1)(c) of the Estate Duty Act under Article 19(1)(f) of the Constitution. 3. Validity of Section 34(1)(c) of the Estate Duty Act under Article 14 of the Constitution. Issue-wise Detailed Analysis: 1. Legislative Competence of Union Parliament Regarding Section 34(1)(c) of the Estate Duty Act: The petitioners initially challenged the legislative competence of the Union Parliament to enact Section 34(1)(c) of the Estate Duty Act. However, their counsel, Sri G. Sarangan, did not pursue this contention during the proceedings. The court found this challenge to be without merit and unequivocally rejected it, stating, "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. Validity of Section 34(1)(c) of the Estate Duty Act under Article 19(1)(f) of the Constitution: The petitioners also challenged the validity of 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, effective from June 20, 1979. Consequently, Sri Sarangan did not pursue this argument either. 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." 3. Validity of Section 34(1)(c) of the Estate Duty Act under Article 14 of the Constitution: The primary contention revolved around the validity of Section 34(1)(c) under Article 14 of the Constitution, which forbids class legislation but allows reasonable classification for legislative purposes. The petitioners argued that the provision infringed Article 14 by subjecting the estate of an undivided coparcener with lineal descendants to a higher duty. Sri Sarangan argued that Section 34(1)(c) was discriminatory as it aggregated the share value of lineal descendants for higher duty, relying on the Madras High Court ruling in V. Devaki Ammal v. Assistant Controller of Estate Duty [1973] 91 ITR 24. Conversely, Sri K. Srinivasan, representing the Revenue, cited several Supreme Court rulings and other High Court decisions upholding the constitutionality of Section 34(1)(c). The court reviewed the legislative history and objectives behind the introduction of Section 34(1)(c), noting that it aimed to bring under aggregation the interests in joint family property of lineal descendants for determining the rate of estate duty. The court referred to its own Full Bench decision in Controller of Estate Duty v. Andal Thayaramma, which supported the provision's validity. The court further examined the principles of Article 14 as elucidated by the Supreme Court in various cases, including Ram Krishna Dalmia v. Justice S. R. Tendolkar and Twyford Tea Co. Ltd. v. State of Kerala. The court concluded that Section 34(1)(c) passed the twin tests of permissible classification and did not violate Article 14. It 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 ruling in Devaki Ammal's case, stating, "With great respect to their Lordships, we are constrained to state that this construction is opposed to the provisions of the Act, as interpreted by this court in Andal Thayaramma's case." The court upheld the validity of Section 34(1)(c), dismissing the writ petitions and discharging the rule. Certificate of Fitness to Appeal: After dismissing the writ petitions, the petitioners sought a certificate of fitness to appeal to the Supreme Court under Articles 133 and 134A of the Constitution. The court granted this request, noting the substantial question of law of general importance involved and the existing difference of opinion among High Courts regarding the validity of Section 34(1)(c). The court directed the Registrar to issue the necessary certificate with expedition.
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