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TMI Blog1959 (3) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 1957, a tax referred to as the wealth-tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule is imposed. The petitioner contends that to the extent the Union Parliament authorised the levy of wealth-tax on Hindu undivided families as units, the legislation is ultra vires, the in support of that contention reliance is placed upon entry No. 86 in List I of the Seventh Schedule to the Constitution of India. 3. That entry reads as follows : "Taxes on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies." 4. It is submitted that legislation imposing taxes on the capital value of the assets only of individual and of companies but not of Hindu undivided families can, under the authority of entry No. 86, be enacted by the Union Parliament. 5. A Hindu undivided family in essence is an association of male Hindus lineally descended in the male line from a common ancestor and includes their wives and their unmarried daughters. The property to the family is of the ownership of the cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs they cover, as far as possible, the entire field of legislation. By entry No. 86 it was intended to confer upon the Union Parliament power to impose tax on the capital value of the assets, exclusive of agricultural land, belonging to individuals and companies. If the expression "individual" includes an association or body of individuals, there is nothing in the context in which entry No. 86 occurs to justify the view that within the connotation of the expression "individuals" a body of individuals which is known as a Hindu undivided family was not intended to be included. 7. Referring to entries Nos. 82 to 89 in List I of the Seventh Schedule to the Constitution by which authority is conferred upon the Union Parliament to impose taxes and duties of diverse descriptions, counsel for the petitioner pointed out that whereas entries Nos. 82 to 85 and 87 to 89 do not refer to the persons on whom the tax is to be imposed, entry No. 86 expressly provides that the levy of taxes on the capital value of the assets is to be on the assets of individuals and companies. This, it is urged, is a limitation upon the power conferred by the topic of taxation which cannot be ig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of limited companies and one natural person was not an "association of individuals" within the meaning of section 3 of the Income-tax Act. In Commissioner of Income-tax v. Salem District Urban Bank Ltd., a Full Bench of the Madras High Court held that a co-operative society registered under the Indian Co-operative Societies Act was an "individuals" within the meaning of the Indian Income-tax Act. Evidently there is not only no settled legislative practice as to the meaning of the expression "individual" in taxing statutes but there is not even unanimity of judicial opinion as to the meaning of that expression in the Indian Income-tax Act. I am, therefore, unable to hold that the expression "individuals" used in defining the topic of legislation in the Constitution does not include an association of individuals such as a Hindu undivided family. 10. The learned Altorney-General appearing on behalf of the Union of India contended that even assuming that by the 86th entry in List I of the Seventh Schedule the Union Parliament was not invested with power to legislate for levying wealth-tax on the assets of Hindu undivided families, the Union Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Wealth-tax Act, 1957 (to be referred to by me as the Act), to show cause why a writ of certiorari should not issue quashing a notice issued by him under section 14 of that Act and further to show cause why a writ of prohibition should not issue restraining him from taking any steps against the petitioner by way of assessment or otherwise in pursuance of that notice. The petitioner is the karta and manager of a Hindu undivided family which is being assessed under the Income-tax Act in the status of Hindu undivided family. In July, 1958, the petitioner received a notice from the respondent requiring him to furnish a return of net wealth of his Hindu undivided family, as on valuation date. The petitioner has thereupon moved this court for relief by issuance of appropriate writ or writs under article 226 of the Constitution. The petitioner challenges the competence of the Union Legislature to charge tax on the net wealth of a joint Hindu family on the ground that section 3 of the Act is ultra vires the Union Legislature in so far as it purports to levy tax on net wealth of the petitioner in his capacity as the karta of his joint family. 13. In opposition to the rule the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the capital value of the assets, exclusive of agricultural land, of individuals and companies; taxes on the capital of companies." 19. Entry 97 in List I of that Schedule is as follows : "Any other matter not enumerated in List II or List III including any tax not mentioned in either of those Lists." 20. It has been contended before us by Sir Noshirwan Engineer, learned counsel for the petitioner, that section 3 of the Act, which levys the tax upon every individual, Hindu undivided family and company is ultra vires the Union Legislature in so far as it charges the Hindu undivided family with this tax and the argument has been that entry 86 in List I authorises the Union Legislature to impose a tax of the nature under consideration only upon individuals and companies. The pivotal point of the argument was that the expression "individuals" cannot include a joint Hindu family because a joint Hindu family is not in the eye of law a group of individuals. It was urged that a Hindu coparcenery is a sort of a corporation and coparcenery property belongs to a unit having corporate existence and not to the individual coparceners or members of the joint family. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgeon v. Commissioner of Income-tax, and there was some cleavage of opinion on this point but it is not necessary for me to refer to the judgments in that case on this point and I shall restrict myself to a few observations on the subject. 24. Where the language of an enactment is plain and clear upon its face and of itself fairly susceptible of one meaning the task of interpretation can hardly be said to have arisen. Absoluta sententia expositor non indiget. But language at best is not a perfect medium of expression and a variety of significations often lie in a word or expressions. Any examination of cases involving construction of statutes must reveal that "few words are so plain that the context or the occassion is without capacity to enlarge or narrow their extensions". So if the Legislature of a country has been accustomed to use any word or expression with a more restricted or extended meaning than might be commonly attributed to it in its ordinary sense the court should not blandly shut out that consideration but should avail of that assistance, albeit limited, in the process of interpretation. Legislative practice is one of the accepted aids to construction and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as similar. There was nothing in the language of the relevant provisions of the Act of 1918, which can support the present contention of the petitioner. Section 3 of the Act of 1922 has been amended from time to time and one thing is clear that the expressions "individual" and "Hindu undivided family" have at all time been expressly mentioned in it along with other units of taxation such, for instance, as "company," "firm" and "associations of individuals." Therefore, it is on the tenuous basis, that in section 3 of the Income-tax Act of 1922, there is express mention of "Hindu undivided family" after the expression "individual" has been expressly stated as a unit of taxation, that this argument wholly rests. There can be more than one answer it but only one will suffice. An obvious answer is that there is no principle of taxation law or general law which prevents Income-tax being charged on group of individuals like members of a joint Hindu family as a unit of taxation. The Hindu undivided family, though not a juridical person, is intended to be taxed as a unit and the tax on the income of the joint family is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reliance was also placed by learned counsel on the following observations in Chukun Lall v. Poran Chunder : "It appears to me that the joint family is, as regards the enjoyment of the joint-property, a single entity. As long as the members, who have, what may be termed, vested interests in the property, choose to continue in a state of commensality and in joint fruition and enjoyment of the profits of the property, they cannot be said to possess individually any several proprietary right other than the right to call for partition - a right which they may alienate. For proprietary purposes, they exist as a whole, somewhat in the character of a corporation. They manage the property together, and the karta is but the mouthpiece of the body, chosen and capable of being changed by themselves." 30. I agree that in sense it is permissible and sometimes even helpful to speak of the joint Hindu family as a sort of a corporate body but that is no manner decisive of or even of particular cogency to the crucial point which arises for our determination. Since, however, so much reliance is placed on the statement from Mayne's Hindu Law and the observations from decisions of cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recognition and establishment of that right by birth and the right to claim partition. It is not necessary to burden this brief conspectus with reference to the texts of the Smritikars and the commentators which show how the law on the subject was developed in what came to be described later on as the Mitakshara and the Dayabhaga schools. The nature and incidents of coparcenery property under the Mitakshara and the rights and extent of interest of the members of such coparcenery and the basic principles of this branch of the law have been examined in numerous decisions of the High Court and the Privy Council and now also by the Supreme Court. The principles, now firmly established, which are relevant for the purpose of the examination of the present contention of the petitioner need no elaborate discussion. They will be found in the following statement of the law in article 216 of Sir Danish Mulla's Hindu Law : "The essence of a coparcenery under the Mitakshara law in unity of ownership. The ownership of the coparcenery property is in the whole body of coparceners. According to the true notion of an undivided family governed by the Mitakshara law, no individual member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of any joint family property. 34. The argument that a Hindu undivided family is owner of the joint family property as a corporate body was evidently presented by learned counsel only in the context of a Mitakshara family and on the footing that the joint family of the petitioner is governed by the Mitakshara school. Since, however, the argument can apply to members of a joint family governed by the Dayabhaga law and members of a tarward, tavazhi, illom, kutumba or kavaru governed by the Marumakkattayam, Aliyasantana or Nambudiri law it becomes necessary to consider whether the expression "individuals" in entry 86 can embrace members of such joint Hindu families. The contention of the petitioner would, of course derive support if the property of any such joint Hindu family can be said to belong not to the members but to the family as a corporate legal entity. If the expression "individuals" in entry 86 could not embrace the members of any such joint Hindu family it would be extremely difficult to attribute to the makers of the Constitution the intention to empower the Parliament to impose a capital levy on members of some joint Hindu families as a unit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary, however, to pursue this point any further. 37. The conclusion, therefore, seems inescapable that the property of a Hindu undivided family is within the ambit of entry 86. It is property of the "individuals" who are members or coparceners of the joint family. It must follow, therefore, that it was within the competence of the Union Legislature to impose wealth-tax on the Hindu undivided family as a unit of taxation and that the impugned legislation in section 3 of the Wealth-tax Act, 1957, affecting a Hindu undivided family cannot be struck down on the score of vires. The court will not declare any enactment as unconstitutional or ultra vires unless the repugnance to the Constitution is clear and beyond doubt and in the case of the legislation challenged before us, I do not see any repugnance. 38. A further point was stated by Sir Noshirwan Engineer, rather as an apprehension of the respondent's counsel then as an argument actually advanced for the petitioner, that if the word "individuals" in entry 86 be interpreted in the restricted sense urged on behalf of the petitioner, the respondent cannot seek to uphold the impugned legislation by resortin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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