Tulzapurkar, J. - (1.) This appeal, by certificate granted by the Kerala High Court, raises the question whether Mapilla Marumakkathayam Tarwads of North Malabar - Muslim undivided families governed by Marumakkathayam Act (Madras Act 17 of 1939) - fall within the expression 'individual' and are assessable to tax under S. 3 of the Wealth-tax Act 1957
(2.) The checkered history through which this litigation has passed may briefly be indicated in order to appreciate how the aforesaid question arises for our determination. At the relevant time the deceased respondent was the karnavan of a Mapilla Marumakkathayam Tarwad registered as impartible within the meaning of S. 20 (1) of the Mapilla Marumakkathayam Act (Madras Act 17 of 1939). He was assessed to Wealth-tax for the assessment year 1957-58 on the net wealth of his Tarwad considered as an individual under S. 3 of the Wealth-tax Act, 1957 and on completion of the assessment a demand notice dated July, 16, 1958 was served on him for payment. On September, 10, 1958 he filed a writ petition being O. P. No. 674 of 1958 seeking to quash the said assessment and the demand notice on the ground of unconstitutionality of the Wealth-tax Act No. 27 of 1957 (hereinafter called 'the Act'). Four other writ petitions were also filed by the karnavans of Hindu undivided families of Malabar and Cochin governed by the Madras Marumakkathayam Act No. 22 of 1923 challenging the constitutionality of the Act. Since common questions of law arose for determination, the High Court disposed of the writ petitions by a common judgment. The constitutionality of the Act was challenged on two grounds- (a) that the Parliament was not competent to include a Hindu undivided family in the charging S. 3 of the Act in view of Entry 86 in List I of the Seventh Schedule of the Constitution and (b) that the charging S. 3 of the Act was violative of Art. 14 of the Constitution. The High Court repelled the first ground of challenge and held that Parliament was competent to include a Hindu undivided family in S. 3 of the Act as constituting a body or group of individuals coming within the term 'individuals' in Entry 86, but accepted the latter ground of challenge by its judgment rendered on July, 1, 1951. It took the view that there was discrimination as between Hindu undivided families and Muslim Mapilla Tarwads which were also undivided families and, therefore, the charging section in so far as it governed undivided families was hit by Art. 14. The High Court observed that the Department had failed to substantiate its contention that Muslim Mapilla Tarwads were so insignificant in number that their existence could be ignored in the context of the attack under Art. 14. The Department carried the matter in appeal to this Court. By its judgment dated February 17, 1964, this Court set aside the judgment and orders of the High Court and remanded the cases to the High Court to consider whether Art. 14 applied to the cases or not after giving the parties opportunity of putting forward their respective cases supported by facts and figures. In doing so, this Court observed that on the question raised under Art. 14 the High Court seemed to take the view that it was for the State to show that Art. 14 was not applicable, that this was not correct and that it was for the party who came forward with the application that equality before the law or equal protection of laws was being denied to him to adduce facts to prove such denial.
(3.) On remand, out of the two contentions initially formulated by the assessees, the first relating to the constitutionality of the Act in relation to Entry 86 in List I had in the meantime been squarely dealt with and overruled by this Court in the case of Banarsi Dass v. Wealth-tax Officer, (1965) 2 SCR 355 and, therefore, the same was not pressed and only the second contention regarding the validity of the charging S. 3 as being violative of Art. 14 was argued before the High Court. Each one of the three learned Judges who heard the matter ultimately rejected the challenge and held that S. 3 was not violative of Art. 14, but each one did so for different reasons and in that process the majority reached the conclusion that non-Hindu undivided families like Mapilla Marumakkathayam Tarwads, were altogether outside the purview of the charging S. 3 and hence assessment made and the demand notice served on the deceased respondent deserved to be quashed. Justice Velu Pillai took the view that the legislative entries in a Constitution were to be widely and liberally construed but not the provisions of a taxing statute, that though the term 'individuals' in Entry 86 of List I would be comprehensive enough to include a body or group of individuals like undivided Hindu families similar construction of the expression 'individual' in S. 3 of the Wealth-tax Act so as to include non-Hindu undivided families like Mapilla Marumakkathayam Tarwads was not warranted, that the term 'individual' in S. 3 of the Act occurred in antithesis with the term 'Hindu undivided family, and if all undivided families were included in the term 'individual' there was no necessity to mention Hindu undivided family as a distinct taxing unit. He, therefore, came to the conclusion that non-Hindu undivided families were not covered by the term 'individual' and were, therefore, outside the charging section of the Act, but their exclusion from the charging section did not attract the vice of discrimination under Art. 14 inasmuch as it had been established that there were only 22 Mapilla Marumakkathayam Tarwads in the whole country and as such constituted an insignificant or microscopic minority and their exclusion from the charging provision was neither deliberate nor material and, therefore, S. 3 did not violate Art. 14. Justice V. P. Gopalan Nambiyar, however, took the view that the expression 'individual' in S. 3 of the Act properly read included a group of individuals who were members of a Mapilla Marumakkathayam Tarwad but since such interpretation of the term 'individual' led to differential treatment to such non-Hindu undivided families as compared to Hindu undivided families including Hindu Marumakkathayam Tarwads and would be violative of Art. 14 he would read down that expression so as to exclude Mapilla Marumakkathayam Tarwads and on reading down the expression as aforesaid S. 3 avoided the vice of discrimination under Art. 14. Justice T. S. Krishnamoorthy Iyer, however, took the view that the expression 'individual' in S. 3 of the Act included group of individuals who were members of a Mapilla Marumakkathayam Tarwad as, according to him, the specific mention of 'Hindu undivided family' as a separate assessable entity in the charging section could not restrict the meaning of the term 'individual' and, therefore, Mapilla Marumakkathayam Tarwads were assessable under Section 3 of the Act and that even after inclusion of such group of individuals within the expression 'individual' the charging S. 3 of the Act was not violative of Art. 14 of the Constitution. He took the view that the equality clause permitted the Legislature a wider discretion to classify persons, properties or transactions into different categories and tax them differently under its power of taxation, that a Hindu Marumakkathayam Tarwad and a Mapilla Marumakkathayam Tarwad were not similarly situate, that the classification made by the Legislature was rational and, therefore, the Act which provided for a lower limit of exemption to individual and higher limit of exemption to Hindu undivided family could not amount to hostile discrimination against group of individuals constituting the Mapilla Marumakkathayam Tarwad. In his view there was no substance in the challenge to S. 3 of the Act under Art. 14 and the writ petition was liable to be dismissed. However, in accordance with the view of the majority that Mapilla Marumakkathayam Tarwads were outside the purview of S. 3 of the Act the writ petition was allowed and the assessment made and demand notice served on the deceased respondent were quashed. In other words, though all the learned Judges repel led the challenge to the charging section based on Art. 14 of the Constitution, the majority reached that conclusion by holding that Mapilla Marumakkathayam Tarwads were outside the purview of S. 3 of the Act. It is this latter view which is being challenged before us by the Department in this appeal.;