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Issues:
Assessment of estate duty on joint family property shares of lineal descendants. Validity of section 34(1)(c) of the E.D. Act, 1953. Interpretation of the charging section along with aggregation provisions. Discrimination between coparceners based on lineage. Constitutional validity under Article 14 of the Constitution. Analysis: The judgment pertains to a reference by the Appellate Tribunal regarding the inclusion of the value of shares of lineal descendants in the joint family property for estate duty assessment. The dispute arose from the estate of a deceased individual, where the Assistant Controller added the value of joint family property shares under section 34(1)(c) of the Act. The Tribunal, following a decision by the Madras High Court, held the section to be ultra vires, leading to the current reference before the High Court of Madhya Pradesh. The High Court noted conflicting decisions from various High Courts on the validity of section 34(1)(c), with Andhra Pradesh, Punjab, and Allahabad upholding its validity. The court emphasized the need to determine the correct legal position on the inclusion of lineal descendants' shares in estate valuation. Referring to their previous decision, the court highlighted that when different High Courts have examined the constitutional validity of a provision, it becomes essential to address the issue. Regarding the constitutional validity of section 34(1)(c), the court disagreed with the Madras High Court's reasoning that the provision goes beyond the charging section and creates discrimination among coparceners. The court reasoned that the aggregation provision does not tax the property of lineal descendants but affects the rate of tax on the deceased's estate. The court emphasized the legislative discretion in taxation matters and the aim to ensure parity between different joint family systems. Ultimately, the High Court held that section 34(1)(c) is valid, rejecting the view of the Madras High Court. The court ruled in favor of the department, stating that the aggregation provision does not violate Article 14 of the Constitution. The judgment concludes by answering the referred question in the negative, supporting the department's position, and making no order as to costs.
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