9911796707
TMI Blog1968 (4) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... J.-- For the years 1959-60, 1960-61 and 1961-62 the petitioner was assessed to tax under the Wealth-tax Act, 1957, by the Wealth-tax Officer, C-Ward, District II(1), Calcutta. The petitioner failed to pay the tax and proceedings for recovery of tax and penalty were taken against him. The petitioner then moved this court for a writ quashing the order of assessment and penalty and notices of demand for recovery of tax. The petition was sought to be supported on numerous grounds, none of which has, in our judgment, any substance. The plea that wealth-tax is chargeable only on the accretion of wealth during the financial year is contrary to the plain words of the charging section. Section 3 of the Wealth-tax Act, as it stood in the relevant yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive assessment periods. Parliament enacted the Wealth-tax Act in exercise of the power under List I of the Seventh Schedule, entry 86, " Taxes on the capital value of assets, exclusive of agricultural lands, or individuals and companies : taxes on the capital of companies ". That was so assumed in the decision of this court in Banarsi Dass v. Wealth-tax Officer, Special Circle, Meerut and counsel for the petitioner accepts that the subject of Wealth-tax Act, falls within the terms of entry 86, List I, of the Seventh Schedule. He says, however, that since the expression " net wealth " includes non-agricultural lands and buildings of an assessee, and power to levy tax on lands and buildings is reserved to the State legislatures by entry 49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l cases of taxes under two different heads operating similarly on taxpayers. Again entry 49, List II, of the Seventh Schedule contemplates the levy of tax on lands and buildings or both as units. It is normally not concerned with the division of interest or ownership in the units of lands or buildings which are brought to tax. Tax on lands and buildings is directly imposed on lands and buildings, and bears a definite relation to it. Tax on the capital value of assets bears no definable relation to lands and buildings which may form a component of the total assets of the assessee. By legislation in exercise of power under entry 86, List I, tax is contemplated to be levied on the value of the assets. For the purpose of levying tax under entry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asured and merely because the Income-tax Act had adopted the annual value as the standard for determining the income, it did not follow that, if the same standard is employed as a measure for any other tax, the latter tax becomes also a tax on income. In the case of a tax on lands and buildings, the value, capital or annual, would be determined by taking the land or building or both as a unit and subjecting the value to a percentage of tax. In the case of wealth-tax the charge is on the valuation of the total assets (inclusive of lands and buildings) less the value of debts and other obligations which the assessee has to discharge. Merely because in determining the taxable quantum under taxing statutes made in exercise of power under ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule. (2) Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule. (3) Subject to clauses (1) and (2), the legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule. " Exclusive power to legislate conferred upon Parliament is exercisable, notwithstanding anything contained in clauses (2) and (3), that is made more emphatic by providing in clause (3) that the legislature of any State has exclusive power to make laws for such State or any part thereof with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State legislature under entry 49 of the State List, to enact a law levying a tax on lands and buildings. A similar view was expressed by the Orissa High Court in Vysyaraju Badri Narayanamurthy v. Commissioner of Wealth-tax and also in Sri Krishna Rao L. Balekai v. Third Wealth-tax Officer B. Reliance was, however, placed by counsel for the petitioner upon certain observations made by Jagdish Sahai J. in Oudh Sugar Mills Ltd. v. State of U. P. In that case the validity of the U. P. Large Land Holdings Act, 1957 (31 of 1957), was challenged on the ground that the power to tax covered by the Act was not conferred upon the State legislature by List II, entry 49. The court in that case held that the tax under the Act was a tax on the holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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