JAYASANKAR T R Vs. CONTROLLER OF ESTATE DUTY ASST

JUDGEMENT

(1.) ONE Sreemathi Amini Bhavani Varasiyar and her two minor children formed a Marumakkathayam tarwad. She died on March 7, 1964. The petitioner is her brother; and he is the accountable person for the estate duty payable under the Estate Duty Act, 1953, on the principal value of all property passing on the death of Smt. Varasiyar. In the matter of assessment under the Act, the petitioner contended before the respondent, the Assistant Controller of Estate Duty, Ernakulam, that the deceased had only one-third right in the tarwad property, and that he was not liable to estate duty as the principal value of the said one-third right was below the taxable limit of Rs. 50,000. The respondent, by his order, exhibit P-1, dated March 31,1969, rejected the above contention, and assessed the petitioner to pay a duty of Rs. 711.27 including interest payable under Section 53 of the Act. Accordingly, he issued a notice of demand, exhibit P-2, dated March 31, 1969, to the petitioner calling upon him to pay the above amount. In making the above assessment he fixed the value of the whole property belonging to the tarwad of the deceased at Rs. 1,05,012 and the value of the one-third share which the deceased would have got on a partition at Rs. 35,004. He, apparently, took the view that Sub-sections (1)(c) and (2) of Section 34 of the Act applied to the case, and on that basis he levied duty on the one-third share at the rate applicable to the aggregated value of the property belonging to the deceased and her lineal descendants, namely, her two minor children. This writ petition has been filed to quash Section 34 of the Act, particularly Sub-section (2) thereof as unconstitutional and void and to quash exhibits P-1 and P-2.

(2.) SECTION 34 of the Act reads:

(3.) THERE is no substance in the contention that aggregation of the interests of the lineal descendants of the deceased in the joint family property for the purpose of determining the rate of duty is violative of Article 19 or Article 31 of the Constitution. Such a contention was not also seriously put forward by counsel. What was seriously urged was that the said provision is violative of Article 14 of the Constitution, as it treats persons or groups of persons differently situated in the same manner, with the result that it affects some of them in a most irrational way. The argument was illustrated by counsel thus. In the case of a Marumak-kathayam tarwad consisting of three sisters, A, B and C, A having 10 children, B having two and C having no children, each member of the tarwad would have on partition 1/15 share in the tarwad property ; and if A dies, her estate would be assessed to duty at the rate applicable to the principal value of 11/15 of the tarwad property ; whereas if C dies, her estate would be assessed only at the rate applicable to the principle value of 1/15 of the tarwad property, though in both cases the principal value of the property passing on the death may be the same. Counsel submitted that that is a differentiation without any rational basis. He also cited the case of a similar Mitakshara family consisting of three brothers, P, Q and R, P having 10 children, Q having 2 and R having no children. The brothers take equally on partition under the Mitakshara law ; and, therefore, the rate of duty will be the same in the case of the property passing on the death of any one of them. Counsel for the petitioner submitted that, in the case of A, following the Marumakkathayam law, her 1/15 share is assessed to estate duty at the rate applicable to the principal value of 11/15 of the tarwad property, while in the case of P, Q or R, who follow the Mitakshara law, his 1/3 share is assessed to duty only at the rate applicable to the principal value of 1/3 share in the family property; and that this amounted to discrimination.