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TMI Blog1968 (1) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... 92 members of the Zamorin's family and on Sreemanavikraman Raja's heirs in separate shares in accordance with section 7(3) of the Hindu Succession Act. However, it would appear that, by reason of section 5(2) of Kerala Act 28 of 1958. Kunhammaman Raja, and, after, him, the succeeding Zamorins, assumed management of the entire property until the present petitioners took over as receivers of court appointed in a partition suit between the several sharers. It was Kunhammaman Raja that was assessed to the tax--that was done under section 24(2) of the Act--and he paid a sum of Rs. 18,000 and odd towards the tax while his successor Zamorin, P. C. Cheria Kunhunni Raja, paid Rs. 20,000 and odd. For the balance of the tax, and for a penalty of Rs. 5,000, imposed on P.C. Cheria Kunhunni Raja, demands have been made on the petitioners by the Inspecting Assistant Commissioner (the respondent herein) by his orders, exhibits P-1, P-3 and P-5, and these orders the petitioners seek to quash. It is important to remember that, before the passing of the Hindu Succession Act, the estate of a sthanamdar in the sthanam property was akin to a Hindu widow's estate see Kochtuni v. States of Madras & Keral ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such, although, of course, the defaulter's interest in the property (which interest might range from full ownership to that of a mere licensee or trespasser, or, when the interest has ceased, as on the determination of a lease, to nothing) being part of his property, can be proceeded against. The argument that, because under section 41(3) of the Act, an arrear of tax due from an assessee can be recovered as if it were an arrear of land revenue, the provisions of the Revenue Recovery Act making land security for the revenue due on it are attracted so as to make land from which agricultural income is derived security for the assessee on such income even if the person liable to pay the tax have no subsisting interest in the land, is so obviously unsustainable that it scarcely needs refutation. The only other provisions of the Act to which reference has been made as authorising the recovery of the tax from the petitioners are sections 23 and 24. Under section 23, when a person in receipt of agricultural income from any land in the State has transferred his interest in such land to another person the tax due can, in certain circumstances, be recovered from the transferee. But this sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that was assessed thereto. When, by sub-section (3) of section 7 of the Hindu Succession Act, the legislature made a gift, as it were, of the entire property of the sthanam to other persons it, could not have intended that those persons should take the property free of the liabilities of the sthanam and that the debts due by the sthanam should remain unpaid and irrecoverable, there being no property out of which they could be recovered. On the principle underlying section 128 of the Transfer of Property Act, the legislature could only have intended that the persons on whom the property devolved should take it subject to the liability to pay all the sthanam debts to the extent of the property. Therefore, the words " sthanam property " occurring in the sub-section must be read as meaning the assets of the sthanam subject to the liabilities thereof. And since the sthanam property is now in the hands of the petitioners on behalf of the persons on whom it has devolved, the petitioners must pay the tax assessed on and due from the sthanam from out of, and to the extent of the property. Alternatively, and somewhat inconsistently, it is suggested that by giving away all the property of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having pleaded differently, for we do not think that any such case as has developed in the course of the hearing could plausibly have been pleaded. Section 2(m) of the Act defines " person " thus : " 'Person' means any individual or association of individuals owning or holding property for himself or for any other, or partly for his own benefit and partly for another, either as owner, trustee, receiver, common manager, administrator or executor or in any capacity recognised by law, and includes a undivided family, a firm or a company, an association of individuals, whether incorporated or not, and any institution capable of holding property ;.... " We do not think that, because any individual holding property in any capacity recognised by law is a person within the meaning of the definition, every capacity in which an individual might hold property is a separate person by itself. On a plain reading of the definition (forgetting, for the time being, the inclusive portion thereof) it is the individual or association of individuals holding property, not the capacity in which the property is held, that is invested with personality. If each capacity in which an individual holds prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot on the succeeding sthanamdar as representing the sthanam. It, therefore, follows that a sthanam as such can have no income so as to make it liable to be assessed to tax. In our view, the person who derived the income and was liable to be assessed to tax was the then sthani, Sreemanavikraman Raja. With regard to his 1/693rd share in what was the sthanam property, we think that the succeeding Zamorins, and now the petitioners, may well be regarded as his legal representatives since, admittedly, they have been in management of the entire property including Sreemanavikraman Raja's share there of. They are, therefore, by reason of section 24 of the Act, liable to pay the tax Sreemanavikraman Raja would have had to pay had he been alive, but that liability is, under the section, limited to the value of Sreemanavikraman Raja's estate, in other words, his 1/693rd share in the property, and, towards that liability, credit must be given to the payments totaling to Rs. 38,000 and odd already made. We give the petitioners a declaration to this effect and quash the demands made on them. We make no order as to costs. We might perhaps mention that it was contended on behalf of the petitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 8 of the Act says : " In the case of agricultural income taxable under this Act which the Court of Wards, Administrator-General or Official Trustee or any receiver, administrator, executor, trustee, guardian or manager appointed by or under any law or by an order of court or by written agreement is entitled to receive on behalf of any person, the tax shall be levied upon and recoverable from the Court of Wards, Administrator-General, Official Trustee or from such receiver, administrator, executor, trustee, guardian or manager, as the case may be, in like manner and to the same amount, as it would be leviable upon and recoverable from the person on whose behalf such agricultural income is receivable, and all the provisions of this Act shall apply accordingly. " This would highlight the measure of the liability of the trustee or the other persons mentioned in the sub-section and would indicate that the income derived from the trust property cannot be aggregated with the income derived from the property owned by the individual in his individual capacity for the purpose of assessment. Take the case of an individual holding properties in the capacity of guardian for two or more mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or as to the " person " who should be assessed in respect of the income received. It says : " Here, the 'person' assessed was the Zamorin Raja of Calicut and that too in respect of the income derived from the sthanam properties. Hence, the estate of the 'deceased person' in this case is the estate of Zamorin Raja, i.e., the sthanam properties. " I do not think that there is much substance in the contention of the petitioners that there was no case for the department that the income was received by Sri Manavikraman Raja in his capacity as sthani. At the close of the accounting year in question, Sri Manavikraman Raja in his capacity as sthanamdar and therefore, the sthanam, incurred the liability to pay the tax to be assessed. The liability arose ex lege on the sthanam and the sthanam properties passed on the death of Sri Manavikraman Raja to the persons mentioned in section 7(3) of the Hindu Succession Act subject to that liability. Then, the question for consideration is whether the order of assessment was binding on those persons. On the death of Sri Manavikraman Raja, Kunhammaman Raja succeeded to the title of Zamorin Raja. He was one of the persons entitled to a sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conclusion that he was the legal representative of the deceased and, therefore, represented the estate in the assessment proceedings. But unfortunately, as we have already indicated, no serious attempt was made by the parties to establish before the High Court by placing before it the necessary material that all or some of the executors, though they did not obtain probate of the will, had intermeddled with the estate wholly or in part. " It is said that Sri Manavikraman Raja had no estate in the sthanam properties after his death and that nothing passed on his death except his share in the properties upon the notional division. I think, the Full Bench decision in Assistant Controller of Estate Duty v. Balakrishha Menon proceeds on the assumption that what passed on the death of the sthanamdar was the entire property of the sthanam. M. S. Menon C.J. said : " Leach M. R. said in Parr v. Parr that the word 'devolve' means to pass from a person dying to a person living and that 'the etymology of the word shows its meaning'. We entertain no doubt that it is in the sense indicated by the master of the Rolls that the word 'devolve' is used in the first portion of sub-section (3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her, if the sthanam continued as a dignity are whatever, it be, after the death of Sri Manavikraman Raja and even after the properties devolved under section 7(3) of the Hindu Succession Act, the person who, took the properties before the order of assessment was passed would be bound by it. In other words, if it is assumed that the sthanam continued as a dignity or whatever it be, and that the assessment was on Kunhammaman Raja as sthanamdar and that the persons who took the properties are in the position of universal donees, would the order of assessment bind those persons as they get the properties before the order of assessment was passed. It was suggested that even if they get the properties subject to the liability to pay the tax to be assessed that liability cannot be enforced except by means of a separate suit and so the proceedings under the Act would not be available to the department to enforce the liability. If the persons who got the sthanam properties are collectively in the position of a universal donee, they are personally liable to discharge the debt or liability of the sthanam to the extent of the properties got by them. Assuming that they are not " assessees " wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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