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TMI Blog1972 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... the deceased father, which is deemed to have passed on to the petitioner, was liable to pay estate duty. The third respondent, i.e., the Assistant Controller of Estate Duty, Kakinada, initiated proceedings under the Act. By his final order dated November 27, 1970, the third respondent assessed the principal value of the share of the petitioner's father in the Hindu undivided family at Rs. 8,95,199. Half of the said value was taken as the interest of the petitioner's father at the time of his death which was deemed to have passed on to the petitioner on the death of his father. The petitioner paid about Rs. 1,05,000 and odd as against the net demand of Rs. 2,50,613. Dissatisfied with that order of the third respondent, he filed an appeal before the second respondent, the Appellate Controller of Estate Duty, Hyderabad, and it is stated that the appeal is still pending. In this writ petition which was filed during the pendency of the appeal the validity of section 34(1)(c) of the Act is challenged. Two contentions were raised before us by Sri P. Babulu Reddy, the learned counsel for the petitioner. It was firstly contended that sub section (1) of section 34 is beyond the competence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f property so passing which consists of a coparcenary interest in the joint family property of a Hindu family governed by the Mitakshara, Marumakkattayam or Aliyasantana law, also the interests in the joint family property of all the lineal descendants of the deceased member ; shall be aggregated so as to form one estate and estate duty shall be levied thereon at the rate or rates applicable in respect of the principal value thereof. (2) Where any such estate as is referred to in sub-section (1) includes any property exempt from estate duty, the estate duty leviable on the property not so exempt shall be an amount bearing to the total amount of duty which would have been payable on the whole estate had no part of it been so exempt, the same proportion as the value of the property not so exempt bears to the value of the whole estate. Explanation.-For the purposes of this sub-section, ' property exempt from estate duty ' means- (i) any property which is exempt from estate duty under section 33 ; (ii) any agricultural land situate in any State not specified in the First Schedule ; (iii) the interest of all coparceners other than the deceased in the joint family property of a Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We are clear, in our view, that Parliament was competent to not only prescribe the rule as to how the principal value is to be determined but is also quite competent to evolve a formula by which the rate at which the aggregate principal value can be charged and then was also equally competent to levy estate duty on the property or interest deemed to have passed after the death of the father to the son. It is, in our judgment, plainly wrong to read anything in section 34 as to mean that at the rate thus found out, the entire estate including the property or interest of the son living is charged with estate duty. What is charged ultimately is the precise property or interest left by the father and which is deemed to have passed to the son. The phrase "deemed to have passed" has been deliberately introduced in the definition of "estate duty" in article 366(9). It is obvious that on the death of a coparcener according to the Mitakashara law the interest of the deceased does not pass but surviving coparceners get the interest or property by mere survivorship. It is to get over this legal difficulty that the deeming provision has been made in the definition of "estate duty ". When once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be suggested as possible to us. That is why clause (c) of sub-section (1) specifically mentions " also the interests in the joint family property of all the lineal descendants of the deceased member ". In view of this special feature of Mitakshara joint Hindu family consisting of coparceners such as father and sons, the Mitakshara father has been given a special treatment as a class. Between the same class there is absolutely no discrimination whatsoever. All Mitakshara fathers get identical treatment. There is thus no discrimination between the same class. Any discrimination between the class of fathers and the class of brothers or class of sons need not be viewed in the light of the same or similar class. As pointed out above, their class is altogether different even under the Mitakshara law. It is true that if a son dies, the position would be different than the one when the father dies under the Mitakshara law, but on that account one cannot say that there has been any discrimination attracting the provisions of article 14 of the Constitution. We do not, therefore, find that section 34(1)(c) is not in any manner discriminatory between the Mitakshara father as against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of article 14 of the Constitution no precise or mathematical accuracy is contemplated and what is to be seen is overall equality given to the same class, then it would not be difficult to see that such a provision cannot be said to attract article 14 of the Constitution. We have already stated that the classification is reasonable and rational. There is a basis for such a rational classification. That classification has necessary nexus with the object which the provisions of the Estate Duty Act are seeking to achieve. In matters of taxation it must be borne in mind that the legislature has greater freedom not only to classify the different persons or objects in regard to whom or which tax is to be levied but different modes of taxation can also be adopted. Since Parliament has a greater latitude in this respect, if one carefully analyses section 34(1)(c), keeping in view the Explanation attached to sub-section (2),we do not think one can reach the conclusion that these provisions are not violative of article 14 of the Constitution. That such classification and the method of taxation is permissible can be seen in the following Supreme Court decision. See Venugopala Ravi Varma Raja ..... X X X X Extracts X X X X X X X X Extracts X X X X
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