1970 (3) TMI 49 - HC - Wealth-tax

Whether the petitioner, the Kerala Financial Corporation, is an individual coming under section 3 of the Wealth-tax Act for purposes of assessment to wealth-tax

Summary

Issues:
- Whether the petitioner, a financial corporation, is considered an "individual" for wealth tax assessment under section 3 of the Wealth-tax Act.

Analysis:
The judgment addresses the primary issue of whether the petitioner, a financial corporation, qualifies as an "individual" for wealth tax assessment under the Wealth-tax Act. The court deliberates on the interpretation of the term "individual" in the context of the Act. The petitioner contested that the corporation should not be taxed at a higher rate than a company, and clause (iia) of section 2(h) was enacted to tax such corporations at a lower rate if the Central Government issued an order. On the contrary, the revenue argued that a corporation under clause (iia) is an "individual" under section 3, entitled to the same tax relief as a company. The court examined various decisions, including those of the Supreme Court and other High Courts, to determine the definition of "individual" in tax laws.

The court referred to past judgments under the Indian Income-tax Act, emphasizing that the term "individual" should be construed in a manner consistent with the context of its usage. The Supreme Court's ruling in Commissioner of Income-tax v. Smt. Sodra Devi highlighted that the term "individual" includes entities like universities or trustee corporations. Additionally, the court cited the case of Jogendra Nath Naskar v. Commissioner of Income-tax, where the Supreme Court affirmed that the term "individual" is not limited to human beings but also encompasses juristic entities like Hindu deities. These cases underscored the broad interpretation of "individual" in tax statutes.

Furthermore, the court examined a Full Bench decision of the High Court, Mammad Keyi v. Wealth-tax Officer, Calicut, which held that the term "individual" in the Wealth-tax Act includes entities like Mappilla Marumakkathayam tarwad. The majority opinion aligned with the interpretation of the term "individual" in constitutional provisions related to taxes on assets of individuals and companies. The court also considered decisions related to road transport corporations, such as Andhra Pradesh State Road Transport Corporation v. Income-tax Officer and Pepsu Road Transport Corporation v. Income-tax Officer, where the courts affirmed that statutory corporations possess distinct legal personalities and are liable to taxation as individuals.

In conclusion, the court dismissed the writ petition, asserting that based on the precedent set by previous judgments, entities like the petitioner financial corporation fall within the definition of "individual" under the Wealth-tax Act. The ruling emphasizes the inclusive interpretation of "individual" to encompass various entities, including statutory corporations, for taxation purposes.