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Smt. Komanduri Seshamma Vs. Appellate Controller of Estate Duty - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petition No. 549 of 1970 and Civil Miscellaneous Petition No. 3872 of 1971
Judge
Reported in[1973]88ITR82(AP)
ActsEstate Duty Act - Sections 34(1); Constitution of India - Articles 14, 19(1) and 366(9)
AppellantSmt. Komanduri Seshamma
RespondentAppellate Controller of Estate Duty
Appellant AdvocateM.S. Narayanacharyulu and ;N. Satyanarayana, Advs.
Respondent AdvocateP. Rama Rao, Adv.
Excerpt:
direct taxation - assessment of estate duty - section 34 (1) of estate duty act and articles 14, 19 (1) and 366 (9) of constitution of india - legality and validity of estate duty assessment challenged - whether section 34 (1) (c) of act was ultra vires of constitution and violated article 14 or 19 (1) (g) of constitution - section 34 (1) (c) of act is a provision for fixing rate of estate duty - neither estate duty act nor section 34 (1) (c) levies any duty on share of lineal descendant which does not pass on death of deceased - only for purpose of determining rate at which property passing on death of deceased has to be taxed section 34 (1) (c) has been enacted - shares of lineal descendants have to be aggregated with property passing on death of deceased - power to determine rate of.....sriramulu, j.1. the legality and the validity of the estate duty assessment are challenged in this writ petition.2. one k.v.l.n. anantha narayana deekshitulu, who was the karta of the mitakashara hindu undivided family consisting of himself, his wife, two sons and daughter, died on 23rd october, 1968. the writ petitioners, who are the legal representatives of the deceased, are accountable for the payment of estate duty in respect of the property that passed on the death of the deceased. they filed a statement of account of the property in respect of which estate duty was payable as required by section 53 of the estate duty act (hereinafter called 'the act'). the value of the properties of the hindu undivided family was determined by the assistant controller of estate duty at rs. 2,83,209.....
Judgment:

Sriramulu, J.

1. The legality and the Validity of the estate duty assessment are challenged in this writ petition.

2. One K.V.L.N. Anantha Narayana Deekshitulu, who was the karta of the Mitakashara Hindu undivided family consisting of himself, his wife, two sons and daughter, died on 23rd October, 1968. The writ petitioners, who are the legal representatives of the deceased, are accountable for the payment of estate duty in respect of the property that passed on the death of the deceased. They filed a statement of account of the property in respect of which estate duty was payable as required by Section 53 of the Estate Duty Act (hereinafter called 'the Act'). The value of the properties of the Hindu undivided family was determined by the Assistant Controller of Estate Duty at Rs. 2,83,209 and the value of 1/3rd interest of the deceased in those properties at Rs. 94,403. For the purpose of determining the rate at which the property that passed on the death of the deceased was to be taxed, the Assistant Controller of Estate Duty, under Section 34(1)(c) of the Act, aggregated with it the interests of the lineal descendants of the deceased and as per the rate so determined, the estate duty payable on the property that passed on the death of the deceased was determined. Appeal was filed against the estate duty assessment before the Appellate Controller. One of the grounds urged by the accountable persons was that Section 34(1)(c) of the Act, under which the aggregation of the lineal descendents' share was made for rate purposes was ultra vires of the Constitution of India. That contention was rejected and the appeal was dismissed by the Appellate Controller.

3. This writ petition has been filed for quashing the order of the Appellate Controller of Estate Duty.

4. The petitioners contended that :

(1) Entry 87 of List 1 of the 7th Schedule to the Constitution of India read with Article 366(9), permits only the estate of the deceased to be taken into consideration for the purpose of assessment, including the levy of estate duty, ascertainment of the rate and also for the collection of the estate duty. It did not permit the estate of the lineal descendants to be aggregated for rate purposes. The power to aggregate the lineal descendants ' share with the property that passed on the death of the deceased was neither incidental nor ancillary to the power to legislate in respect of levy of estate duty. Hence, Section 34(1)(c) of the Act is ultra vires of the Constitution of India.

(2) Even assuming that Section 34(1)(c) of the Act is ultra vires of the Constitution, still it violates Articles 14 and 19(1)(f) of the Constitution of India and is, therefore, invalid.

(3) The Government could not levy any duty on the estate of the lineal descendants of the deceased under the Act. What the Government could not achieve directly by making a law levying estate duty on the lineal descendants' share it wanted to achieve by an indirect method by aggregating the lineal decendants' share with the share of the deceased in the joint family properties, for the purposes of rate. Parliament was not competent to do so.

(4) Section 34(1)(c) of the Act makes an invidious classification amongst the members of the Mitakshara Hindu undivided family into a member ofthe Hindu undivided family dying leaving a lineal descendant and a member of a Hindu undivided family dying without leaving a lineal descendant. This is an unreasonable classification which is violative of Article 14 of the Constitution of India.

(5) The right of the heirs of the deceased to get the properties of the deceased is unreasonably curtailed by Section 34(1)(c) of the Act. Therefore, Section 34(1)(c) offends the fundamental right guaranteed to a person under Article 19(1)(f) of the Constitution of India.

(6) Even assuming that Section 34(1)(c) of the Act is intra vires of the Constitution of India, and does not offend either Article 14 or 19(1)(f) of the Constitution of India still the decision of a Division Bench of this court in Gunda Bhaskara Rao v. Controller of Estate Duty, [1968] 67 I.T.R. 309 (A.P.) is binding on this court and therefore aggregation under Section 34(1)(c) of the Act could not be made.

5. The questions whether Section 34(1)(c) of the Act was ultra vires of the Constitution and whether it violated Article 14 or 19(1)(f) of the Constitution of India were duly considered by this very Bench in Writ Petition No. 4038 of 1969. After considering all the contentions raised before it and after a full discussion, this court in the above writ petition held that Section 34(1)(c) of the Act is intra vires of the Constitution and that it neither violated Article 14 nor Article 19(1)(f) of the Constitution of India.

6. The arguments that were addressed in that writ petition have almost been repeated in this writ petition, though in a different or slightly altered form.

7. The one principal argument that was addressed before us for giving a full hearing in this case, notwithstanding the fact that arguments were addressed at great length in Writ Petition No. 4038 of 1969* and the fact that it was decided against the applicant in that case, was that the decision of this court in Gunda Bhaskara Rao v. Controller of Estate Duty was neither cited before us nor considered by us in the Writ Petition No. 4038 of 1969, N. Krishna Prasad v. Assistant Controller of Estate Duty : [1972]86ITR332(AP) .. Accepting the above argument, we allowed the counsel to have his full say in the matter.

8. The learned counsel, Sri Siva Rao, who appeared for the petitioner and who argued at great length and for considerable time in Writ Petition No. 4038/69 filed a review petition C.M.P. 3872 of 1971 requesting us to review our judgment passed in Writ Petition No. 4038 of 1969. In support of the review petition, the learned counsel did not address separate arguments, but adopted the arguments advanced by the learned counsel. Sri M. S. Narayanacharyulu, appearing for the petitioner in this writ petition.

9. Before we deal with these questions in the light of the arguments addressed in this writ petition, we would consider the legal effect of the decision of this court in Gunda Bhaskara Rao v. Controller of Estate Duty. The facts are :

One Gunda Eswaraiah, representing the Hindu undivided family of himself and his son, was a partner with another person in a partnership firm, which had contracts with Garrison Engineers. Gunda Eswaraiah, as per the terms of the partnership deed, was the financing partner and was entitled to all the assets and liabilities of the firm except to the extent of the capital share of the profits of the other partner. The contract works stood in the name of the deceased, Gunda Eswaraiah. On the date of death of the deceased, Gunda Eswaraiah, the Garrison Engineers owed a sum of Rs. 2,91,000 to the firm in respect of the contract works executed by the firm. The Garrison Engineers insisted on the production of a succession certificate for the payment of the said sum to the firm. The accountable persons obtained succession certificate, but for doing so they had to pay court-fee of Rs. 17,688. Under Section 50 of the Estate Duty Act, the accountable persons claimed deduction of the entire court-fee of Rs. 17,688 paid by them for obtaining the succession certificate from the estate duty that may be paid. The Assistant Controller of Estate duty and on appeal the Board of Revenue allowed deduction of so much of the court-fee which was payable on the estate of the deceased, which was chargeable to estate duty, i.e., Rs. 4,437 only.

10. On those facts, at the instance of the accountable persons, the following question was referred to this court by the Board :

' Whether, on the facts and in the circumstances of the case, the Board were correct in holding that only court-fees paid on that portion of the estate of the deceased, on which estate duty was charged, can be allowed as a deduction under Section 50 of the Act '

11. A Division Bench of this court consisting of Jaganmohan Reddy C. J. (as he then was) and Sambasiva Rao J. answered the reference in the affirmative and in favour of the department. In answering the reference in that manner Jaganmohan Reddy C.J. (as he then was), speaking for the court, observed that :

' An examination of the provisions of Section 34(1)(c) would show that what is sought to be provided for is the aggregation of the estate of the deceased for the purposes of determining the rate of the estate duty leviable upon it. We cannot accept the contention of Mr. Mallikarjuna Rao that the aggregation of the estate of the deceased for the purposes of fixing the rate would include the share of other coparceners in the property. The entire estate duty deals only with the property which passes on the death of the deceased. '

12. The learned counsel, Sri Narayanacharyulu, appearing for the petitioner strongly relied upon this case for making his submission that the Bench of this court in the aforesaid case had decided that the share of the coparceners in the property cannot be aggregated with the share of the deceased for the purposes of fixing the rate of estate duty.

13. We are unable to accept this submission. The contention put forward by Mr. Mallikarjuna Rao, and which was negatived by the Bench, is found at page 311 of the report. It reads as follows :

' Mr. Mallikarjuna Rao contends that under Section 34(1)(c) of the Estate Duty Act, the entire estate has to be aggregated in order to fix the rate in respect of the interest of the deceased and, if this is so, the court-fee paid to recover the amount due to the joint family should also be deducted. '

14. The contention formulated in the above terms is too wide. The word 'coparcener' in a Mitakshara Hindu undivided family may mean a brother or a son. If by the use of the word ' coparcener ', the learned counsel meant ' brother ', and that is how the learned judges understood, the learned judges were right in refusing to accept the contention of Mr. Mallikarjuna Rao, If, on the other hand, by the use of the word ' coparcener ' the learned counsel meant ' a son ', i.e., a lineal descendant, the learned judges would not have refused to accept the contention of tho learned counsel regarding aggregation in view of the clear language of Section 34(1)(c) of the Act.

15. Those observations must therefore be confined to a case of aggregation of the share of the deceased with the share of coparceners other than lineal descendants. We are therefore unable to agree with the contention of the learned counsel in this case that the above decision is an authority for the proposition that the share of the deceased cannot be aggregated with the share of the lineal descendants, for the purpose of fixing the rate of estate duty. Moreover, the validity or otherwise of the principle of aggregation postulated in Section 34(1)(c) of the Act was not in issue in that case.

16. We, therefore, hold that there is no force in the contention of the learned counsel for the petitioner that if the above decision was considered by us in deciding the Writ Petition No. 4038 of 1969, our decision would have been otherwise. We, accordingly, reject the 6th contention raised by the learned counsel for tho petitioner.

17. We will then proceed to consider the vires of Section 34(1)(c) of the Act.

18. The argument of the learned counsel was that entry 87 in List-1 of the 7th Schedule to the Constitution of India, when read with Article 366(9), shows that Parliament had power to make a law levying duty on the property passing on the death of the deceased. The power to aggregate the share of lineal descendants with the share of the deceased for the purpose of rate, was neither incidental nor ancilliary to the power to make law regarding the levy of duty on the property that passed on the death of the deceased. What it could not directly achieve by virtue of its power to legislate on the topic in entry No. 87 in List I of the 7th Schedule to the Constitution of India, Parliament could not indirectly achieve by aggregating the share of the deceased with the share of the' lineal descendants for rate purposes.

19. The arguments by Sri Siva Rao, in this behalf, in Writ Petition No. 4038 of 1969, N. Krishna Prasad v. Assistant Controller of Estate Duty AIR 1965 SC 745. were the same as those advanced in this case, except for the fact that the learned counsel did not say in so many words that the power to aggregate under Section 34(1)(c) of the Act was neither incidental nor ancillary to the power to make a law in regard to the taxation of the property that passed on the death of the deceased.

20. Our legislatures have undoubted plenary powers. But these powers are controlled by the basic concepts of the written Constitution and can be exercised within the legislative fields assigned to them, by the three Lists in the 7th Schedule. But beyond the lists, the legislatures cannot travel. If the legislatures step beyond the legislative fields assigned to them their legislative actions are liable to be struck down by the courts. (See Article 143 of the Constitution of India, In re).

21. It is well established that heads of legislation in the various lists ofthe 7th Schedule should be interpreted widely so as to take in all matterswhich are of a character incidental to the topics mentioned therein. (SeeR. Abdul Quader & Co. v. Sales Tax Officer, : [1964]6SCR867 . While considering the scope ofvarious entries in the legislative lists, widest possible amptitude must begiven to the words used and each general word should be held to extendto all ancillary or subsidiary matters, which can fairly and reasonably besaid to be comprehended in it. Legislature has power to legislate not onlyon the subject-matter which falls directly within the subject of the legislative entry, but also on a subject-matter, which may be ancillary orsubsidiary to such subject, for otherwise much of the legislation wouldbe rendered ineffective on the ground that the provisions which arenecessary or incidental to effective legislation on the subject expresslywithin the power of the legislature, cannot be made by the legislature, onthe ground that they fall outside the legislative entry. (See State ofGujarat v. Ramanlal Sankalchand & Co., : AIR1965Guj60 .

22. The incidental and ancillary powers have to be exercised in aid of the main topic of the legislation. What powers are incidental or ancillary to the powers to legislate on the subject in a List contained in the 7th Schedule of the Constitution have been stated in clear terms in R. Abdul Quader & Co. v. Sales tax Officer thus :

' All powers necessary for the levy and collection of the tax concerned and for seeing that the tax is not evaded are comprised within the ambit of the legislative entry as ancillary or incidental.'

23. Entry 87 in List 1 of the 7th Schedule to the Constitution of Indiareads :

' Estate duty in respect of property other than agricultural land.'

24. The expression ' estate duty ' has been defined under Article 366(9) of the Constitution of India thus :

' 'Estate duty' means a duty to be assessed on or by reference to the principal value, ascertained in accordance with such rules as may be prescribed by or under laws made by Parliament or the Legislature of a State relating to the duty, of all property passing upon death or deemed, under the provisions of the said laws, so to pass.'

25. Parliament under the above entry has power to legislate on estate duty in respect of property other than agricultural lands. As per its definition estate duty is a duty to be assessed not only on the principal value of the property passing upon the death of a deceased but also with reference to the principal value of the property passing on death.

26. In Commissioner of Income-tax v. Khemchand Ramdas, [1938] 6 I.T.R 414 (P.C.) it was held that ' assessment', under the Income-tax Act, sometimes means computation of income-tax, sometimes determination of the amount of tax, and sometimes the procedure laid down for imposition of such tax. The same meaning has to be given to the word ' assessment' in all the tax laws, including the Estate Duty Act. Since estate duty is a duty on the property passing on the death of a deceased person, a complete law on estate duty must comprise provisions :

(1) to show what property passes on the death of a deceased,

(2) to ascertain the value of those properties passing on death,

(3) relating to deductions to be allowed such as funeral expenses, etc.,

(4) relating to the rate and the manner in which such tax has to be computed on the property passing on death of a deceased,

(5) relating to the whole procedure for making assessments,

(6) to plug evasion of payment of estate duty, and

(7) to the manner in which the estate duty has to be collected

27. Unless all the provisions relating to the above matters are contained in the Estate Duty Act, the Act cannot be said to be complete or effective. All these matters are, beyond doubt, incidental or ancillary to the power to legislate on estate duty. The main topic in entry 87 in List I is estate duty. The power to legislate is incomplete and ineffective unless the law is made relating to the rate of tax and the manner in which it is computed. Section 34(1)(c) is nothing but a provision for fixing the rate of estate duty.

28. In Khyerabari Tea Co. v. Stale of Assam, A.I.R. 1964 S.C. 025. dealing with the contention of the counsel that a flat rate of taxation introduced an element of unreasonableness, their Lordships of the Supreme Court observed at page 940 of the report thus :

' The law of taxation is on the ultimate analysis, the result of the balancing of several complex considerations, and so, it would be unreasonable to insist upon the application of a general rule that if a tax is levied at a flat rate it must be treated as unreasonable. In the present case the legislature may have considered the requirements of the trade carried on by the producers of tea and may have thought that a flat rate would be just and fair to the trade as a whole. Those arc questions which must normally be left to the legislature to decide.'

29. If there is any difficulty in ascertaining the limits of the powers granted by the Constitution, the difficulty must be resolved as far as possible in favour of the legislative body (See Diamond Sugar Mills v. Stale of U.P., : [1961]3SCR242 .

30. The result of the above discussion establishes that :

(1) the power to make law, as to how and at what rate tax is to be levied on the property passing on the death of a deceased, is a power incidental and ancillary to the pov/er conferred on Parliament under entry 87 in List I of the 7th Schedule to the Constitution.

(2) In the ultimate analysis, the law of taxation is the result of balancing of several complex considerations and it would be unreasonable to insist upon the application of one general rule for all.

(3) The fixation of rate must be left to the legislature to decide.

31. Section 34(1)(c) of the Act is, therefore, within the legislative competence of Parliament, and is within the power granted to it by entry 87 in List I of the 7th Schedule to the Constitution read with Article 366(9) of the Constitution. The first contention of the learned counsel is accordingly rejected.

32. The third contention can now be conveniently considered. The contention of the learned counsel for the petitioner is that Parliament could not levy any duty by virtue of power derived from entry 87 in List I of the 7th Schedule to the Constitution, on the estate of lineal descendants, which did not pass on the death of the deceased. What it could not directly achieve it could not also indirectly achieve by aggregating the lineal descendants' share with the share of a deceased person. There is no substance in this contention. The contention is based on an incorrect and wrong premises. Neither the Estate Duty Act nor Section 34(1)(c) levies any duty on the share of the lineal descendant which does not pass on the death of a deceased. What it does is that it levies estate duty on the property passing on death. Only for the purpose of determining the rate at which the property passing on the death of the deceased has to be taxed, Section 34(1)(c) has been enacted. For that purpose it says that the shares of the lineal descendants have to be aggregated with the property passing on the death of a deceased. How and at what rate tax is to be levied on the property of a deceased passing on death, is a matter which must be left to the legislature. Power to determine the rate of tax with reference to the property passing on the death of a deceased directly comes within Article 366(9) of the Constitution and is included in the power to legislate on estate duty, under entry 87, in List I, of the 7th Schedule to the Constitution. The contention, therefore, fails and is rejected.

33. We will next proceed to consider whether Section 34(1)(c) of the Act, in any way, violates the fundamental right guaranteed to a citizen under Article 14 of the Constitution of India.

34. Even if the legislatures are acting within the legislative fields assigned to them under the entries found in the 7th Schedule to the Constitution, still they will be liable to be struck down by the courts, if they trespass on the fundamental rights of a citizen in a manner not justified by the relevant Articles dealing with those fundamental rights. Article 14 of the Constitution provides that the State shall not deny to any person equality before the law, or the equal protection of the laws within the territories of India. Equality before law means that, amongst equals, the law should be equal and should be equally administered, that like should be treated alike, i.e., equal protection of all alike in the same situation and under like circumstances.

35. It is now well-established that Article 14 forbids class legislation, but it does not forbid reasonable classification for the purpose of legislation.

36. In Ram Krishna Dalmia v. Justice Tendolkar, : [1959]1SCR279 two tests have been laiddown for finding out whether a particular classification is within thepermissible limits or not. They are, (1) the classification must be foundedon intelligible differentia, which distinguishes persons or things that aregrouped together from others left out of the group, and (2) that differentiamast have' a rational relation to the object sought to be achieved by thestatute in question. The same tests have been repeated by the SupremeCourt in Vajravelu Mudaliar v. Special Deputy Collector for Land Acquisition, : [1965]1SCR614

37. In view of the inherent complexity of fiscal legislation, the courts generally admit a larger discretion to the legislature in the matter of classification so long as they do not violate the fundamental principle underlying the doctrine of equality. The power of legislature to classify is of wide range and flexibility so that it can adopt its system of taxation in all proper and reasonable ways. (See State of Kerala v. Haji K. Kutty, A.I.R. 1969 S.C. 376). If there is equality and uniformity within each group the law will not be condemned as discriminative, though due to some fortuitous circumstances arising out of a peculiar situation some included in a class get advantage over others, so long as they are not singled out for special treatment. Taxing law is no exception to the above doctrine. But, in the application of the principle the courts, as has already been stated above, in view of the inherent complexity of the final adjustment of diverse elements, permit a larger discretion to the legislature in the matter of classification. However, such taxation law must adhere to the fundamental principles underlying the said doctrine. (See Khandige Sham Bhat v. Agricultural Income-tax Officer, : [1963]3SCR809 .

38. Bearing in mind the above principles, we will judge whether the classification in this case has transgressed the permissible limits.

39. The object of the Estate Duty Act is to levy and collect estate duty. The policy and the object behind the enactment of the Estate Duty Act is ' to impose an estate duty on property passing or deemed to pass on the death of a person. Though the levy and collection of income-tax at high rates since the war and the investigations undertaken by the Income-tax Investigations Commission in a number of important cases of tax evasion have, no doubt, prevented to some extent the further concentration of wealth in the hands of those who are already wealthy, yet these do not amount to positive steps in the direction of reducing the existing inequalities in the distribution of wealth. It is hoped that by the imposition of an estate duty such unequal distributions may be rectified to a large extent '.

40. Two arguments have been advanced by the learned counsel appearing for the petitioners in support of his contention that Section 34(1)(c) of the. Act offended Article 14 of the Constitution. They are :

(1) Prior to the introduction of Section 34(1)(c) into the Act, propertypassing on the death of a Hindu father leaving lineal descendants, wastaxable at a rate applicable to the father's share only, but after theintroduction of Section 34(1)(c), the same share of the father is chargeableto tax not at a rate applicable to his share but at a rate applicable to thisshare aggregated with the shares of his lineal descendants.

(2) In a Hindu undivided family governed by Mitakshara school of law, the law makes an invidious discrimination between (i) a father dying leaving a son. and (ii) a son dying leaving father, although both are coparceners and on the death of any one, the interest of the deceased passes to the other by survivorship.

41. In the former case the share of the father is taxable at the higher rate applicable to the father's share aggregated with the son's share but in the latter case the son's share alone is taxed un-aggregated with his father's share.

42. Whether the law makes an invidious discrimination or not, has to be judged on the existing provisions of law that is in force and not by a comparison of the provisions of a previous Jaw with the provisions of the law in force. The first argument, therefore, fails and is accordingly rejected.

43. In the case of every person, dying after the commencement of the Estate Duty Act, estate duty is leviable on the property passing on death, irrespective of the fact whether he is a Hindu, Muslim, Christian, etc. In the case of death of a father leaving a son, the whole of the property of the father passed to the son by succession, except in a case, where the father is a member of a Hindu undivided family governed by the Mitakshara school of law, in which case father's interest in the family property passes on to his son by survivorship and not by succession. This peculiarity is due to the fact that in a Hindu undivided family governed by the Mitakshara school of law, the sons acquire by birth a right in the ancestral property. In other laws, as well as in the Hindu undivided family governed by the Dayabhaga school of iaw, the position of the father is different. Thus, in the case of death of a father leaving sons, the entire property of the father passes on death and is chargeable to estate duty at a rate applicable to it. However, in the case of death of a father leaving a son in a Hindu undivided family governed by the Mitakshara school of law, not the entire property but only a share of . the property will pass on death. The estate duty is payable on the whole estate in all cases, except in the case of death of a father leaving sons in a Hindu undivided family governed by the Mitakshara school of law, in which case estate duty is payable only on a part of the family estate. To prevent concentration of wealth in persons, who are already wealthy, the Estate Duty Act tries to bring the estate, after payment of taxes in both the aforesaid cases, to the same level by levying estate duty at a higher rate in the latter case.

44. The Estate Duty Act so far as possible bridges the gap and removes the disparity between the estates, after payment of estate duty, of a Mitakshara Hindu father from a father under any other law. The father in a Hindu undivided family governed by the Mitakshara school of law is not differently treated from any other father. All persons dying leaving lineal descendants, as far as possible, are equated. If at all there is any discrimination, it is in favour of a Mitakshara Hindu father and that is due to thepeculiar incidents of the Hindu undivided family governed by the Mitak-shara school of law. Further, for the purpose of taxation a Mitakshara Hindu father is treated as a separate class as against the father governed by other laws. This classification is based upon intelligible differentia, which distinguishes a Mitakshara Hindu father from any other father leaving lineal descendants. The classification has got a rational relation to the object of the Estate Duty Act, which has been stated above. A son dying before a father is very unlikely. Article 14 cannot be applied to a case, which is not likely to happen. Discrimination cannot be judged from those special cases. None in the class is singled out for a special treatment.

45. The laws are complex and a larger discretion is admitted by courts to the legislatures to suit the needs or the purposes of the legislative enactment. In Venugopal Ravi Varma Rajah v. Union or India, : [1969]74ITR49(SC) their Lordships of the Supreme Court observed that :

''.... absolute equality or uniformity of treatment is impossible of achievement .... A taxing statute is not, therefore, exposed to attack on the ground of discrimination merely because different rates of taxation are prescribed for different categories of persons, transactions, occupations or objects. '

46. Merely on the ground that in a class, one gets an advantage over another in special and uncommon circumstances, a taxing statute cannot be struck down as offending Article 14 of the Constitution, unless the law has singled out such person for a special treatment. The Estate Duty Act has neither singled out a father or a son in a Mitakshara Hindu undivided family for a special treatment. We, therefore, hold that the Estate Duty Act neither makes unreasonable classification nor makes an invidious discrimination between one and the other. It does not therefore, violate or infringe the freedom of equality before law enshrined in Article 14 of the Constitution. Contention No. 4 is accordingly rejected.

47. The next contention is that Section 34(1)(c) of the Act violates Article 19(1)(f) of the Constitution. This very contention was put forward by Mr. Siva Rao, on behalf of the petitioner, in Writ Petition No. 4038 of 1969 but in a different language. He contended that Section 34(1)(c) of the Act made an inroad into the property of the lineal descendants by aggregating their shares with the share of the deceased and subjecting the share of the deceased to a rate of tax applicable to the whole of the aggregated property. That contention was rejected.

48. The argument of the learned counsel was that, by reason of aggregation, the property passing on death of the deceased in this case was subjected to a higher rate of taxation and to that extent deprived the lineal descendants their right to acquire the full share of their father. There is no force in this contention. Whether the share of the father was subjected to one rate or the other, the lineal descendants only get their father's share minus the tax levied. If this argument is extended, it may mean that even the Estate Duty Act, without the principle of aggregation, is also violative of Article 19(1)(f) of the Constitution, The estate duty is levied on the property passing on the death of the deceased, before it becomes the share of the lineal descendants. The law imposes an obligation on the property passing on death. It is only after the payment of estate duty that is payable on it, the balance of the properties will be shared by the lineal descendants. There is thus no force in this contention that Section 34(1)(c) of the Act violates Article 19(1)(f) of the Constitution. Accordingly, contentions Nos. 2 and 5 are rejected.

49. We will sum up our conclusions. Power to aggregate lineal descendants' share with the share of the deceased that passed on the death, for rate purposes, is incidental and ancillary to and is included in the power of Parliament to legislate on estate duty under entry 87, in List I, of the Seventh Schedule to the Constitution of India. Section 34(1)(c) of the Estate Duty Act neither violates Article 14, nor Article 19(1)(f) of the Constitution of India. Section 34(1)(c) does not levy tax on property not passing on death, but only levies estate duty on the property passing on death, but at a rate applicable to the share of the deceased aggregated with the shares of the lineal descendants.

50. The decision in Gunda Bhaskara Rao v. Controller of Estate Duty does not render any assistance to the petitioner.

51. We see no reason to take a different view from the one taken in Writ Petition No. 4038 of 1969. The writ petition fails on all contentions and is accordingly dismissed.

52. The review petition filed by Sri Siva Rao to review our decision in Writ Petition No. 4038 of 1969 also fails and is dismissed.

53. The writ petitioner shall pay the costs to the department. Also the review petitioner in C.M.P. No. 3872 of 1971 shall pay the costs to the department. Advocate's fee Rs. 75 in the W. P. and Rs. 25 in the review petition.


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