TMI Blog1972 (3) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... d (1)(c) of the Estate Duty Act, 1953, as ultra vires and unconstitutional. It is also prayed that the respondents should be restrained from enforcing these provisions in respect of the estate of the petitioner's father. The material facts are that one Nuli Laxminarayana and his son, the petitioner, constituted a Hindu undivided family governed by the Mitakshara law. The petitioner's father died on March 6, 1966, at Vellore in the State of Madras. The family had extensive properties consisting of agricultural lands situate in West Godavari District, A.P., residential house, godowns, cattle shed, cinema theatre, etc. Under the Estate Duty Act of 1953, on the death of the petitioner's father, the estate of 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed by a law made by Parliament. Parliament is thus not only empowered to frame law relating to estate duty which must necessarily include the determination of the principal value ascertained in accordance with such rules as are prescribed under the law made by Parliament, but also determine the rates at which such principal value in regard to the property passing upon death or deemed to pass upon the death is to be levied. It is in exercise of this power to legislate that Parliament has enacted section 34. Section 34, in so far as it is relevant, reads as under: "34. (1) For the purpose of determining the rate of estate duty to be paid on any property passing on the death of the deceased-.... (c) in the case of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mily governed by the Mitakshara law is exempted from the payment of estate duty. The principal value of such part of the property, therefore, is excluded from the payment of estate duty. What becomes plain when one reads both the sub-sections conjointly is that while for the purpose of finding out at what rate the interest which is deemed to have passed from the father to the son after the death of the father, both the interests are aggregated, nevertheless the estate duty is levied only on the interest belonging to the father which is deemed to have passed to the son after the father's death. The argument therefore is painly inconsistent with the express provision of section 34(1) and (2) and cannot, therefore, be accepted. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the death of the father, since the property is got by the sons by way of survivorship, the interest of the dying father has to be assessed to duty. In order to find out as to what is the interest of the father which is deemed to have passed on to the sons, it is not possible precisely to take any portion of the coparcenary property as belonging to the father and obviously it cannot be separately valued. The principle of valuation therefore was evolved by taking the whole aggregate estate and determine its principal value for the purpose of finding out the rate at which the father's interest can be charged with estate duty. No other method of determining the principal value or the rate at which it should be charged is possible or 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 whats ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heirs, on the other hand under the Hindu law as governed by the Mitakshara school, after the death of the father the property does not pass to his sons as legal heirs but it passes on according to the principles of survivorship. The sons in fact get right in the ancestral joint family property by their birth, which is not possible in the case of a Dayabhaga school. If one keeps these differences in view, the legislature was competent to evolve a method whereby approximately these two fathers living under two different schools can be brought together for the purpose of charging estate duty. There may be slight difference in rates and ultimately in the levy of estate duty. But, if it is remembered that while considering the provisions 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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