Civil Appeal No 1095 of 1970
and 1677 of 1973
From the Judgment and Order dated 2627 9 1968 of the Gujarat High Court in Estate Duty Reference No 367
SC Manchanda and RN Sachthey for the Appellant In CA 109570
KB Kazi and 1
N Shroff for the Respondents in CA 109570
ST Desai and J Ramamurthi for the Intervener
ST Desai and J Ramamurthi for the Appellants in CA 167773
SP Nayar for the Respondent in CA 167773
73 KRISHNA IYER J Is it permissible for judges to specu late on the philosophical edge of a human problem hidden by the litigative screen before settling down to examine its forensic facet  If it is we may make an observation about the question posed in this case without pejorative impli cations
For many men in advancing age arrives a stage in life when to be or not to be stampedes them into doing things 11 dubious before God and evasive before Caesar and we have a hunch both the appeals before us smack of such a disposition as will be evident when the narration of facts and discus sion of law unfold the story
A brief statement of the circumstances leading to the single critical legal issue proliferating into a plurality of points may now be made
We begin with the facts in the Gujarat Appeal Kantilal Trikamlal1 since the Madras Appeal Ranganayaki Ammal2 raises virtually the same question is plainer on the facts and may conveniently be narrated immediately after
To appreciate the complex of facts we choose to enunciate the principal proposition of law canvassed before us by the Revenue in the two appeals
Does a relinquishment by a decedent of a slice of a share or a partition of joint property in such manner that he takes less than his due effected within two years of his death with a view to relieve himself of a part of his wealth and pro tanto to benefit the accountable person a near relation have to suffer estate duty under the for brevity the Act  One Trikamlal Vadilal hereinafter referred to as the deceased and his son Kantilal referred to later as the accountable person constituted a Hindu undivided family
They continued as members of a joint and undivided Hindu family until November 16 1953 when an instrument styled release deed  was executed by and between the deceased and Kantilal
Considerable controversy between the parties turns on the interpretation of this instrument and it will therefore be necessary for us to refer to its terms briefly later
Suffice it to state for the present that under this instrument a sum of rupees one lakh out of the joint family properties was taken by the deceased in lieu of his share in the joint family properties and he relinquished his interest in the remaining properties of the joint family which were declared to belong to Kantilal as his sole and absolute properties and Kantilal also in his turn relinquished his interest in the amount of rupees one lakh given to the deceased and declared that the deceased was the sole and absolute owner of the said amount
Within two years from 7 3 died and on his death the question arose as to what was the estate duty chargeable on his estate
Kantilal who is the accountable person before us filed a return showing the status of the deceased as individual and the principal value of the estate as Rs 106724
The Assistant Con troller was however of the view that the instrument dated November 16 1953 operated as relinquishment by the deceased of his interest in the joint properties in favour of Kanti lal and that the consideration of rupees one lakh for which the one half share of the deceased in the joint family properties at the date of the said instrument was Rs 344058 and there was therefore a disposition by the deceased in favour of a relative for partial consideration and it was accordingly by reason of section 27 sub section
1  liable to be treated as a gift for the purpose of section 9 sub section
1 and its value viz Rs 344058 after deducting Rs 106724 being the amount received by the deceased together with interest was includable in the principal value of the estate of the 1 2 12 deceased
The Assistant Controller accordingly included a sum of Rs 237334 being the difference between Rs 344058 and Rs 106724 in the principal value of the estate of the deceased
On appeal by the accountable person the assessment made by the Assistant Controller was confirmed by the Central Board of Revenue
Though the main ground on which the Cen tral Board based its decision was the same as that which found favour with the Assistant Controller viz that under the instrument there was a disposition by the deceased of his interest in the joint family properties in favour of Kantilal for partial consideration and it was therefore by reason of section 27 sub section
1  liable to be treated as a gift for the purpose of section 9 sub section
Another argument also appealed to the Central Board and that was one based on section 215 Explanation 2
The Board held that in any event under the instrument there was extinguishment at the ex pense of the deceased of his interest in the joint family properties and there was therefore a deemed disposition by the deceased of the benefit which accrued to Kantilal as a result of such extinguishment and the charge to estate duty was accordingly attracted under section 9 sub section
1 read with section 27 sub section
On reference the High Court held in favour of the assessee and the Revenue has appealed hopefully relying on a ruling of the Madras High Court which itself is the sub ject matter of the sister appeal
Here the tables were 7 3 High Court as contrary to the ratio of this Court s pro nouncements
Were it so it were bad but judgments even of the summit court are not scriptural absolutes but rela tive reasonings and there is in them read as a human whole more than meets the legal eye which looks at helpful lines here and there
We will examine them closely especially because several High Courts are split on the construction of disposition  in the Act and seek to resolve the conflict of views and values
Behind everyone s attitude to tax is an unspoken value judgment Before we move into the arena of argument we may silhou ette the facts of the Madras case
The deceased Bheema Naidu and his predeceased son s widow and children consti tuted a Hindu undivided family
A little within the two year pre mortem line drawn by the Act he effected a partition and turnnig abnegator took a smaller share instead of his legal half benefiting the others to the extent of the difference
This difference was taxed as disposition of property under the Act and fiscal hierarchy was upheld by the High Court
The assessees assail that decision before us
The forensic focus has been rightly turned on the inter pretation of the critical provisions in the Act bearing on this controversy
The social design the legislative intent and the grammar of statutory construction visa vis the Act may have to be briefly surveyed while studying the language of the text and the impact of the context
The scheme and spirit of the Act need to be understood first for every social legislation has a personality and taxing statute a fiscal 13 philosophy without a feel of which a correct perspective to gather the intent and effect of the separate clauses cannot be gained
Over four centuries ago Plowden said Each law consists of two parts viz of body and soul the letter of the law is the body of the law and the sense and reason of the law is the soul of the law
 It is well known that death duties imposed on richer estates have a socialistic savour being motivated by the State s policy of paring of unearned accumulation of inheritances and of diminishing glaring disparities of wealth
This comprehensive but slow egalitar ian purpose fulfils itself fully only when it operates on property at death and near death nor is there any rational ground to save some types of disposition or subtle transfer ence of wealth from exigibility having due regard to the plain language of estate duty measures
The broad object also includes inhibition of dispositions unsupported by reasonable consideration made on the eve of death or within 7 3 or manoeuvres though sincere being manifestly likely to defeat death duties posthumously flowing from properties covered thereby
The fiscal policy is dual i the collec tion of revenue and ii reduction of the quantum of inher itance on a progressive basis directed towards a gentle process of equalisation
The draftsman s efforts have been exerted to use words of the widest import and where the traditional use of words iS likely to limit to use legal fictions by deeming devices to expand the semantics there of and to rope in all kinds of dealings with property for inadequate or no consideration within the statutory prox imity of death
The sweep of the sections which will be presently set out must therefore be informed by the lan guage actually used by the legislature
Of course if the words cannot apply to any recondite species of property courts cannot supply new logos or invent unnatural sense to words to fulfil the unexpressed and unsatiated wishes of the legislature
Law to a large extent lives in the language even if it expands with the spirit of the statute
It is good to remember that the Indian Act has some English genetic touch being largely based on the English Finance Acts of 1854 Onwards
This historical factor has current relevance for one reason We may usefully refer to although we may not be blindly bound by English authorities under the corresponding statute and both sides have sought trans Atlantic light on this footing
A skletal projection of the Act to the extent that concerns us here may now be made
This Act exacts estate duty
The charging section section 5 authorizes the levy of a duty upon all property which passes on the death of a person dying after the commencement of the Act
Two questions immediately arise
What is property as envisaged in the charging section  When does property pass on the death of a person  The answer to the first question is furnished in an inclusive definition of property  in section 215
It is a wide ranging definition supplemented by two expansive definitions
Of immediate moment is Explanation 2 which reads Explanation 2
The extinguishment at the expense of the deceased of a debt or other rights shall be deemed to have been a disposition made by the deceased in favour of the 14 person for whose benefit the debt or fight was extinguished and in relation to such a disposition the expression property  shall include the benefit conferred by the extinguishment of a debt or 7 3 What property passes on the death of a person is indicated in an inclusive definition set out in section 215
It covers property passing either immedi ately on the death or after any interval and on the death  includes at a period ascertainable only by reference to the death 
A glance at sections 9 and 27 gives more comprehension
Section 9 among other provisions introduces a legal fiction and since the meaning and implication of this section has been the subject of some disputation we had better allow the provision in the first instance to speak for itself 9 Gifts within a certain period before death  1  Property taken under a disposition made by the deceased purporting to operate as an immediate gift inter vivos whether by way of transfer delivery declaration of trust settle ment upon persons in succession or otherwise which shall not have been bona fide made two years or more before the death of the deceased shall be deemed to pass on the death
 Both the appeals deal with deceased persons who are mem bers of joint Hindu families and the subject matter of the dispositon was linked up with their share in the HUF acro nymically speaking
For this reason our attention has to be rivetted to sections 7 and 39 which resolve a likely difficul ty in ascertaining the interest in property which  passes on the death of a deceassed coparcener in the joint family property the pristine rule of Hindu law being his share lapses in favour of the survivors and is not a descendible estate or a predictable fraction
Sections 7 and 39 by a deeming process circumvent this contretemps and crystallize a clear share in the coparcener at the point immediately before death
Had the properties of the coparcener been partitioned immediately before the death what share in the joint family property would have been allowed to the de ceased represents the principal value of such share for the purposes of computation of death duty
Section 27 is a strategic provision which deems as a gift all dispositions made by the deceased person in favour of his relations unless such disposition was made for full consideration or the deceased was concerned in a fiduciary capacity with the property Relative  means in this context near rela tions set out in section 272 and it is sufficient for our pur pose to know that in both the appeals the accounting persons are relatives failing within the statutory compass
One more provision is pertinent to our enquiry and that deals with gifts within a certain period before death
While there are other provisions dealing with gifts before 7 3 already been read and will later be explained
Now to the boxing ring
The bout has been fought over the import and amplitude of property  as widened by section 215 especially Explanation 2 thereto
Sri section T Desai appearing for the accountable per 15 son in the Madras case and Shri Manchanda arguing for the Exchequer in the Gujarat case have levelled multi pointed attacks but the crucial issue which is decisive of both cases is the same
What is property  for the purpose of this fiscal law  Is it a misfortune for any legal system that a battle of semantics where able judges and erudite advocates fundamen tally disagree on meanings of words pivotal to the very levy should be a bonanza of the draftsman  Simplicity and certainty is basic to the rule of law but is a consummation devoutly to be wished in our corpus juris
Here we find ranged on both sides more than one High Court taking con trary but scholarly views
A radically new legislative art is the urgent contemporary need if comprehensibility to the laity is to be a democratic virtue of law
We will first unlock Explanation 2 to section 215 discover the signification of property  expanded by the deeming clause and then read it in that wider sense along with the comprehensive provisions of sections 9 27 and 5
The key con cept that underlies this fasciculus of sections is property the tax being charged on property passing on death
Consid erable controversy has raged not only on the boundaries of the notion of disposition  as specially defined by import ing a legal fiction but on the slightly ticklish and tricky placement in section 9 of the expression bona fide made two years or more before the death of
the deceased 
If we surmount these constructional difficulties the answer to the core question arising in these appeals fol lows without much ado
In fairness to counsel we must at the threshold set out the seven propositions formulated by Shri Desai for pin pointing the discussion
They are 1
Partition is merely a process in and by which joint enjoyment is transferred into an enjoyment in severalty
Since in such a case each one of the coparceners had an antecedent title which extended to the whole of the joint family properties and had therefore full interest 7 3 his share no creation of right or interest in such specific property takes place in his favour nor does any extinguishment of any right or interest in the other property take place to his detriment
Sections 91 and 271 form part of a single scheme
The word disposition  in section 27 1  cannot be treated in isolation and must take its colour and meaning from the sense in which the word has been used in sec
9 1
3 Disposition  means giving away or giving up by a person of something which was his own  606 SC
No meaning howsoever wide and comprehensive of the expression disposition  can possibly take in its ambit or coverage parti tion  SC
The mere fact that on a partition a copar cener takes a lesser share than he could have demanded does not mean 16 that there is disposition  as contemplated in Explanation 2 to section 215 which defines proper ty 
In such a partition there is no extinguish ment at the expense of such coparcener of any debt  or other right 
In a partition whether equal or unequal there is no disposition by a coparcener in favour of any relative nor can it be said that there is any purported gift nor can it be treated as a gift
Of course the partition must be bona fide and not to evade duty
The scope and ambit of Explanation 2 to section 215 becomes more clear when it is read in juxtaposi tion with Explanation 1
The extinguishment  contemplated in Expla nation 2 can be only in respect of any debt or other right which could have been created by the deceased and could have been enforced against him
In a partition no such thing takes place
A definition is not a substantive rule of law operative by itself
The definition of property  in section 215 has to be read along with sections 9 and 27 and not in isolation
Disposition in section 9 even if read along with Explanation 2 to section 215 can only be of something the disponer had as his own at the time of the alleged extinguishment
If it is of any interest in property it must be of an interest which was already vested in the disponer at the time of the disposition
If of any other right it must be of a right which had vested in him even when he gives it up
 This 7 point programme of submission really brings out all the issues and sub issues legal and factual and the last two over lapping in some respects deserve first attention
Before that we must state in precis form the facts with reference to which the statute must speak
The life of the law is not idle abstraction or transcendental meditation but fitment to concrete facts to yield jural results a synergetic action not isolated operation
Our discussion will therefore be conditioned by the material facts found in the two cases
They are tersely though simplistically put that the deceased person being a member of a joint Hindu family within two years before his death entered into a partition of family properties bona fide not as colourable or sham transaction whereby he received towards his share an allotment substantially lower in value than would be his legal entitlement thus gladly suffering a diminution which would to that extent benefit the account able person by giving him a larger slice of the joint cake than was his due
We assume for the purpose of argument that the divi sion in status and the partition made by metes and bounds have taken place simultaneously on the execution of the deed in question
We also take it that the release relinquish ment or division in the cases on hand has been bona rule made in the sense that one sharer has not over reached the other or played fraud or together the sharers have not gone through a mere simulacrum of a partition or exercise in colourable division
We proceed on the further footing and that is law well established 16 now that partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in several ty
Each one of the sharers had an antecedent title and therefore no conveyance is involved in the process as a conferment of a new title is not necessary 
Now to the 7 points of Shri Desai
The 6th point is a shade platitudinous and the other side does not dispute its soundness
Certainly the  definition of property  in section 215 has to inform and must be read along with section 9 and section 27 and cannot be functional in isolation
It is not a substantive rule of law operative by itself
Similarly point No 7 stated the way it has been may not be and has not been disputed before us for the expression disposi tion  in section 9 must be read with the definition in Explana tion 2 to section 215 since that is the whole purpose of adeeming provision  in the shape of a definition
Granting that the disponer cannot extinguish or part with what is not his rather a trite statement though since A can give or give up only what he has at the time of alienation or abnegation
Shri Desai contends and rightly that the deceased could not dispose of any interest in property which did not earlier vest in him or at least at the time of the disposition
No right can be given up without its being vested in him when he gives up
This hypothesis in law turns the searchlight on the existence at the time of the release or partition of what has been disposed of under that deed
What then was disposed of  And did the deceased own at the time of disposition what he thus made over or extinguished  An answer to these twin questions may be readily given once we clear the confusion that has crept in at certain stages of the argument by a process of inept importation and imperfect understanding of the rule of Hindu law regarding coparcenary
The proposition is trite that in an undivided Hindu family coparceners have no predictable or defined shares but each has an antecedent title in every parcel of property and is jointly the owner and in enjoyment with the others
But surely it is well established that at the very moment mem bers decide upon a partition eo instanti a division in status takes place whereupon the share of the demanding members gets crystallised into a definite fraction and if there is division by metes and bounds the allotment of properties vivifies and specifies such shares in separate ownership
These two processes or stages may often get telescoped when by consensus the coparceners jointly divide the properties
Unequal divisions of properties knowingly made may not spell invalidity and mathematical equality may not be maintained always in a partition while ordi narily substantial fairness in division is shown
Granting these legal positions the more serious question which has been agitated before us is as to whether a willing al beit  bona fide arrangement whereby a substantially reduced share is taken by the decedent consequentially vesting a proportionately larger estate in the recipient is a dispo sition falling within Explanation 2 to section 215 and there fore property  within the substantive definition
In this context we may have to read sections 9 and 27 for property taken under a disposition made
by the deceased may be deemed to be a gift in favour of the accounting person in the circum stances mentioned in section 9
Similarly section 27 also tracks down certain dispositions made by deceased 18 persons in favour of relatives by treating them as gifts 
The basic concept of disposition looms important in such circumstances
This introductory statement of the law takes us to the other points of Shri Desai which we will tackle together guided by the text of the sections aforesaid read in the light of the citations aplenty of cases Indian and Eng lish
We may compendiously state forgetting for a moment the complication in the Gujarat Case of the release deed executed by the decedent being either a relinquishmere or a partition that in both the appeals the decedents and the recipients were members of an undivided Hindu family and within the two years proximity of death the partition ar rangement was effected where under a lesser share than due was allotted to the latter
And indeed it is this differ ence between what was due to the right of the deceased and what was actually taken that was treated as a gift  by the Revenue based on the definition in section 2 15  Explanation 2 plus sections 9 and 27
The cornerstone of the whole case of the Revenue is thus the concept of disposition  which we may point out right at the outset is not a term of art not legalese but plain English with wide import
What is more this word has acquired beyond its normal ambit an abnormal semantic expansion on account of a special definition with an Explanation super added
In short disposition  in the Estate Duty law of India enjoys an extended meaning
Even so does it go so far as to cover a mere taking of a less than equal share by the deceased the benefit on account of which has gone to the accountable person  Before we enter the thicket of judicial conflict regard ing the meaning of property  as extended by Explanation 2 to section 215 we may remind ourselves as courts that in a taxing statute one has to look merely at what is clearly said
There is no room for any intendment
There is no equity about a tax
While the rulings on the point in the Act and in the allied Gift Tax Act will be adverted to presently we may begin an incisive understanding of the Explanation 2 aforesaid
The spirit thereof is obvious
The framers of the Act desired by a deeming provision regarding disposition  to cover extinguishments of debts and all other rights at the expense of and made by the deceased in favour of the beneficiary
The substantive definition of property  in section 215 is not exhaustive but only inclusive and the supplementary operation of Explana tion 2 takes in what is not conventionally regarded as disposition 
Indeed disposition  even according to law dictionaries embraces the parting with alienation of or giving up property a destruction of property  Black s Legal Dictionary
The short question before us is whether the dispositive fact of giving up by a coparcener of a good part of what is due to him at the time of division to his own detriment and to benefit of another coparcener can be called disposition  in law
Undoubtedly this operation to use a neutral expression is made up of simple jural facts that modify and extinguish jural relations and create in their place new rights whereby one gives or gives up and another gains
This legal result produced by voluntary action is disposition  within the scope of Explanation 2 to section 215
The assessee s contention effectively presented by counsel takes a legalistic course ignoring the purpose language and amplitude of 19 Explanation 2
Argues Shri Desai in a partition equal or unequal there is no element whatsoever of consideration partial or full since in a partition there is only an adjustment of rights and substitution of joint enjoyment by enjoyment in severalty
In his view it is a confusion to mix up unequal partition with inadequate consideration and it is a worse confusion to talk in terms of bona fide and main fide partition where the shares are merely unequal by choice
What is forgotten in this chain of reasoning is the office of Explanation 2 which is deliberately designed to take into its embrace what otherwise may not be disposi tion 
Once we reconcile ourselves to the enlargement of sense imported by the Explanation we part company with the traditional concept
We have also to stress the expression other right  in the Explanation which is of the widest import and cannot be constricted by reading it ejusdem generis and debt  Other right  in the context is expressly meant considerably to widen the concept and there fore suggests a somewhat contrary intention to the applica tion of the ejusdem generis rule
We may derive instruction from Green s construction of the identical expression in the English Act Is
452
The learned author writes A disclaimer is an extinguishment of a right for this purpose
Although in the event the person disclaiming never has any right in the property he has the right to obtain it this inchoate right is a right  for the purposes of section 452 The ejusdem generis rule does not apply to the words a debt or other right  and the word right  is a word of the widest import
Moreover the expression at the expense of the deceased  is used in an ordinary and natural manner and is apt to cover not only cases where the extinguishment involves a loss to the deceased of a benefit he already enjoyed but also those where it prevents him from acquiring the benefit
The words the person for whose benefit the debt or other right was extinguished  do not neces sitate a conscious intention to benefit some per son it is sufficient that some person was in fact benefited The motive or purpose of the deceased appears to me to be immaterial  provided the transaction was gratuitous and did in fact benefit the other person concerned
The extinguishment of a right may also cover the release of his interest by one joint tenant in favour of another Green s Death Duties 7th Ed Butterworths p 149 Shri Desai and also Shri Kazi appearing for the ac counting persons  in the respective cases urged that this expansive interpretation taking liberties with traditional jural concepts is contrary to this Court s pronouncement in Getti Chettiar1
That was a case under the Gift Tax Act 1958 and the construction of section 2xxiv fell for decision
Certainly many of the observations there read de hors the particular statute might reinforce the assessee s stand
This Court interpreted the expression transfer of property  in section 2xxiv and held that the expression disposition  used in that provision should be read in the 1 20 context and setting of the given statute
The very fact that disposition  is treated as a mode of transfer takes the legal concept along a different street if one may use such a phrase from the one along which that word in the is travelling
Mr Justice Hegde rightly observed if we may say so with respect that Words in the section of a statute are not to be interpreted by having those words in one hand and the dictionary in the other
In spelling out the meaning of the words in a section one must take into consideration the setting in which those terms are used and the purpose that they are in tended to serve p 605 606 The word transaction  in section 2xxiv of the Gift Tax Act takes its The word that is it must be a transfer  of property colour from the main clause that is  it must be a transfer  of property in some way
Since a partition is not a transfer  in the ordinary sence of law the Court reached the conclusion that a mere partition with unequal allotments not being a transfer cannot be covered by section 2xxiv
A close reading of that provision and the judgment will dissolve the mist of misunderstanding and discloses the danger of reading observations from that case for application in the instant case
The language of section 2 15  Explanation 2 is different and wider and the reasoning of Getti Chettiar supra cannot there fore control its amplitude
It is perfectly true that in ordinary Hindu law a partition involves no conveyance and no question of transfer arises when all that happens is a severance in status and the common holding of property by the coparcener is converted into separate title of each coparcener_as tenant in common
Nor does subsequent partition by metes and bounds amount to a transfer
The controlling distinction consists in the difference in definition between the Gift Tax Act section 2xxvi and the is
215
The Madras High Court in Valliammai Achi1 took the correct view when it said on similar facts The facts of this case in our opinion seem to square with the second Explanation to section 215
That no doubt is an Explanation to the inclusive definition of property
But the language of it seems to go further and coins a deemed disposition in the nature of a transfer
The mechanics of the transfer for the purposes of Explanation 2 consist in the extinguishment at the expense of the deceased of a right and the accrual of a benefit in the form of the right so given up in favour of the person benefited
Transfer in a normal sense and as understood with reference to the Transfer of Property Act connotes a movement of property or interest or right therein or thereto from one person to another in praesenti
But in the kind of disposition contemplated by the second Explanation one can hardly trace such a transfer because of the mere fact of extinction of a certain right of the deceased which does not involve a movement a benefit is  808
21 created in favour of the person benefited thereby
In the present case the son who was a quondam coparcener had a pre existing right to every part of the coparcenary property and if by a partition or a relinquishment on the part of one or more of the coparceners the joint ownership is severed in favour of severalty the process having regard to the peculiar conception of a coparcenary in volves no transfer 
But Explanation 2 is concerned not with that kind of situation but an extinguishment of a right and creation of a bene fit thereby and this process is statutorily deemed to be a disposition which is in the nature of a transfer
 This line of reasoning has our general approval
From what we have said the bold lines of opposing views emerge and they hinge on the conno tation of disposition 
The High Courts in their divergent stands have lined up before both strands of reasoning
Madras a Full Bench of the Punjab High Court and the classic observations in In re Stratton s Disclaimer1 support the point of view championed in Ranganayaki Ammal
The contrary thinking finds support in Andhra Pradesh and Punjab as welt as in Gujarat Kantilal
The sense of our statutes modelled as they are on a series of English Acts is best expressed so far as the concept of disposition  is concerned by Jenkins LJ in In re Stratton s Disclaimer1 relating to section 45 of the Finance Act 1940 which runs similar in strain to s215
Noting the strength of the sweeping and unparticularized reference to a debt or other right  Jenkins LJ repelled the application of the ejusdem generis rule and impart ed to the word right  the widest import Mr Russel did not seek to limit the effect of the words debt or other right by an applica tion of the ejusdem generis rule and in my view it would not be possible to do so
In the absence of any such restriction on its meaning the word right  is a word of the widest import and if in accordance with my view Mrs Stratton can properly be held to have had a right in respect of the specific bequest and devise pending disclaimer I see no ground for holding that it was not a right within the meaning of section 45 2
     I confess that I am disposed to deprecate recourse in revenue legislation to sweeping gener alities of this kind but the mere fact that an enactment is couched in general and comprehensive terms affords no ground for excluding from its operation transactions falling fairly within its provisions general though they may be
Roxburgh J emphasized the impact of the legal fiction and observed A certain state of facts is to be deemed to be a different state of facts and the line between fact and hypothesis seems to me to be drawn by the word deemed 
If this be 1 1958 34 IT R Estate Duty 47 22 so only three actual facts are expressed to be necessary in order to involve the hypothetical situation 1 the existence of a right 2 its extinguishment 3 its extinguishment at the expense of the deceased
When those three facts concur the hypothesis goes into action and the hypothesis is that these facts are equivalent to a disposition made by the deceased in favour of the person for whose benefit the right was extin guished
These words ill my opinion all form part of the hypothesis and the concluding words are necessary to define the hypothetical disponee
 The conventional construction of disposition  has to submit to the larger sweep of the hypothetical extension by defini tion
The Gujarat High Court has gravitated towards the nar rower construction of disposition  and or right 
It makes no specific reference to Stratton s Disclaimer supra and the learned judges have insisted on transfer of inter est as a necessary indicium of every disposition
Partition does not involve a transfer and therefore cannot be a disposition runs the logic of the Gujarat judgment
Like wise other right  in Explanation 2 it is argued cannot cover the case of partition as in the learned Judges  view a transfer is a sine qua non
We cannot agree for reasons already stated with this approach which defeats the intendment of the Act and the express object of Explana tion 2 to section 215
The peculiar definition of disposi tion  injecting a triple hypothesis and fictional expan sion covers the diminution in the share taken by the copar cener and augmentation of the share taken by the other and impresses the stamp of property on this process by the deeming  provision
Sections 9 and 27 strengthen this conclusion
We were confronted by Shri Desai with Kancharla Kesava Rao1 for contending that giving away or giving up could not in all cases be disposition where the transaction is a partition
This Court in the above ruling held that a partition in a coparcenary was just an adjustment of rights not a transfer in the strict sense
Shri Justice Hegde speaking for the Court placed on section 24 of the Act more or less the same intepretation as was put in Getti Chettiar supra by this Court
Whatever might be the interpretation disposition  in section 24 of the Act we are satisfied that the only straight forward construction of that expression in section 27 is as we have explained at length above
Section 9 dealing with gifts takes in property under a disposition made by a deceased throwing up the question What is a gift 
Section 27 supplies the answer an dispsition made by the deceased in favour of a relative of his shll be treated for the purposes of this Act as a gift 
Unless of course it is made for full considera tion
There is no limitation environmental or by the society of words warranting the whittling down of the unusually wide range of explanation 2 to section 215
Kesava Rao supra cannot cut back on the liberality of section 27
In the realm of legal fiction law cannot be confined within traditional 1 23 concepts
It is pertinent that as between the Gift Tax Act and the there is basic difference in that the tax effect in the first is on transaction inter vivos and in the second on the generating source of transmission by death
Comparisons in construction cannot therefore be pushed too far
Before winding up tihis part of the discussion we may refer to Grimwade vs Federal Commissioner of Taxation 1 where Williams J dealing with the expression disposition of property  defined somewhat in similar lines as in our Act observed The whole emphasis of paragraph f is upon  a transaction entered into by one person which seems to me to mean that where there is an act done by one person with the requisite intent and as a result there is a transfer of value from any property of that person to the property of another person the conditions of liability are satisfied
Each statute has its own mint and the coinage of words bears a special stamp
That is our only comment when we depart semantically from other judicial  annotations of the expres sion disposition 
If A is entitled to a moiety in property worth rupees five lakhs or let us assume that much of cash in the till belongs jointly to A and B and by a partition relinquishment disclaimer or otherwise A accepts something substantially less than his due say rupees one lakh as against rupees two and a half lakhs and the remainder goes to
the benefit of B who gets four lakhs as against two and a half lakhs commonsense concurrently with Explanation 2 draws the inference that A has made over at his expense and to the benefit of B a sum of rupees one and ahalf lakhs which may be designated a disposition  by him in favour of B Shri Desai rightly stressed in construing section 9 we should not confess between a mala fide transaction and unequal partition
He is right
But the simpIe scheme of section 9 may be stated to erase misapprehension
What the provision declares is that if the disposition made by the deceased is more than two years before death
 the property covered thereby shall not pass on the death unless it shall not have been bona fide
That is to say even if the transaction were more than two years before the death if it were entered into in bad faith estate duty may still attach to that property
So far as dispositions made within two years of the death of the deceased are concerned there is no question of mala fides or bona fides
All such transactions are caught within the coils of section 5 read with sections 9 and 27
The re quirement of bona fides  has nothing to do
with disposi tions within 2 years and has much to do with those beyond 2 years
The marginal obscurity in section 9 is due perhaps to compressed draftsmanship
Now to costs
We have already indicated how serious arguments have appealed in contrary ways to several fudges of the High Courts and certain observations of this Court have themselves been capable of different shade of sense from what we have read into them
Indeed the point involved in the case is of general public importance which 1  24 on account of the conflict in the High Courts needs to be decided by the Supreme Court
One of the major functions of this Court is to declare the law for the country under article 141 of the Constitution although under our adversary system it is only when litigation spirals up the Court acts and declares the law
While dealing with a similar situation this Court in Trustees Port Bombay1 observed Is it fair in these circumstances that one party albeit the vanquished one should bear the burden of costs throughout for providing the occa sion not provocation for laying down the correct law in a controversial situation  Faced with a similar moral legal issue Lord Reid observed I think we must consider separately costs in this House and costs in the Court of Appeal
Cases can only come before this House with leave and leave is generally given because some general question of law is involved
In this case it enabled the whole vexed matter of non est factum to be reexamined
This seems to be a typical case where the costs of the successful respondent should come out of public funds
The Evershed Committee on Supreme Court Practice and Procedure had suggested in England that the Attorney General should be empowered to issue a certificate for the use of public funds in appeals to the House of Lords where issues of outstanding public importance are involved
 Maybe a scheme for a suitors  fund to indem nify for costs as recommended by a Sub Committee of Justice is the answer but these are matters for the consideration of the Legislature and the Executive
We mention them to show that the law in this branch cannot be rigid
We have to make a compromise between pragmatism and equity and modify the loser pays all doctrine by exercise of a flexi ble discretion
The respondent in this case need not be a martyr for the cause of the certainty of law under section 87 of the Act particularly when the appellant wins on a point of limitation
The trial Court had even held the
appellant guilty of negligence
In these circumstances we direct that the parties do bear their costs throughout
 We adopt the same course and while
allowing Civil Appeal No 1095 of 1970 and dismissing Civil Appeal No 1677 of 1973 the parties in both the appeals are directed to bear their respective costs throughout
VPS C4
1095 of 1970 allowed
CA 1677 of 1973 dismissed
1   738


Summary:
Section 5 of the  authorises the levy of duty upon all property which passes on the death of a person
Section 9 provides that property taken under a disposition made by the deceased purporting to operate as an immediate gift whether by way of transfer delivery etc which shall not have been bona fide made two years or more before the death of the deceased shall be deemed to pass on the death
Explanation 2 to section 215 which defines prope rty  provides that the extinguishment at the expense of the deceased of a debt or other rights shall be deemed to have been a disposition made by the deceased in favour of the person for whose benefit the debt or right was extinguished and in relation to such a disposition the expression property  shall include the benefit conferred by the extin guishment of a debt or right
Section 27 deems all disposi tions made by the deceased person in favour of his relations as gifts for the purposes of the Act unless such disposi tion was made for full consideration or the deceased was concerned in a fiduciary capacity with the property
A member of a joint Hindu family within two years before his death entered into a partition of family proper ties bona fide not as a colourable or sham transaction whereby he received towards his share an allotment substan tially lower in value than would be his legal entitlement with a view to relieve himself of a part of his wealth and 7 3 who is a relative within the meaning of the Act
HELD The relative as the accountable person under the Act is liable to pay estate duty on the difference between the share that the deceased was legally entitled to and the share that the deceased actually took that is to the extent of the benefit received by the accountable per son
14 G 12 A 1 Death duties are imposed on richer estates the fiscal policy being a collection of revenue and b reduction of the quantum of inheritance on a progressive basis towards equalisation by diminishing glaring dispari ties of wealth
Therefore the Act uses words of the widest import legal fictions and deeming devices to
rope in all kinds of dealings with property for inadequate or no consid eration within the statutory proximity of death
If the words however cannot apply to a particular species of property courts
cannot supply words to fulfil the unex pressed wishes of the legislature
In a taxing statute one has to look merely at what is clearly said
There is no room for any intendment
There is no equity about a tax
13 D 2 The definition of property  in section 215 has to inform and must be read along with sections 9 and 27
It is not a substantive rule of law operative by itself
Similarly the expression disposition  in section 9 must be read with the definition in Explanation 2 to section 215 since that is the whole purpose of a deeming provision  is the shape of a definition
17 B C 3 1003 SC176 10 3 The definition of property  in section 215 is not exhaustive but only inclusive and the supplementary opera tion of Explanation 2 takes in what is not conventionally regarded as disposition 
The expression other right in the Explanation is of the widest import and cannot be read ejusdem generis with debt 
The process of extinguishment of a right and the creation of a benefit thereby is statuto rily deemed to be a disposition in the nature of a transfer
Therefore the definition of disposition  covers the diminution in the share taken by one coparcener and augmentation of the share taken by the other and impresses the stamp of property on this process by the deeming provi sion
18 F G 19 C 4 The case of Getti Chettiar 1971 dealt with the expression transfer of property  in section 2xxiv of the Gift Tax Act 1958
This Court held that transaction  7 3 and it must be a transfer  of property and that since a partition is not a transfer in the ordinary sense of law a mere partition with unequal allotments cannot be covered by section 2xxiv
But the language of Explanation 2 to section 215 of the is different and wider and so the reasoning of this case cannot control its amplitude
20 C 5 This Court in Kancharla Kesava Rao 1973 placed on disposition  in section 24 of the the same interpretation as was put in the case of Getti Chettiar
But whatever might be the interpretation of disposition  in section 24 under section 27 a disposition in favour of a relative not for full consideration shall be treated as a gift and under section 9 if the disposition made by the deceased is more than 2 years before death the property covered thereby shall not pass on the death unless it shaH not have been bona fide to say even if the transaction were more than 2 years before the death if it were entered into in bad faith estate duty may Still attach to that property
But so far as dispositions made within two years of the death of the deceased are concerned there is no question of mala fides or bona fides and all such transactions would be liable to estate duty
22 G 23 F G Valliammi Achi  approved
In re
Stration s Disclaimer applied
Grimwade vs Federal Commissioner of Taxation  referred to
Principles for awarding costs in matters of general public importance where there is conflict in the High Courts on a question of Law reiterated