Case: Welath Tax Officer, Calicut Vs. C. K. Mammed Kayi (Since Deceased) Through His L.Rs. T.M.Poc

family, it would not automatically follow that the term individual occurring in s. 3 of the Wealth Tax Act 1957 would include a non-Hindu undivided family like a Mapilla Marumakkathayam Tarwad, but the question will have to be considered in the light of the scheme of the Wealth Tax Act itself. The enactment is intended to provide for the levy of wealth-tax; the general scheme thereof is to assess all persons who happen to possess or earn wealth beyond a particular limit fixed by the statute to wealth-tax and since the Act imposes a general tax on the entire wealth of the community the presumption would be of equality of incidence rather than exemption of a few. Secondly, the term individual under s. 13 (2) of the General Clauses Act, 1897 can be read in plural and as such would include a body or group of individuals like a Mapilla Tarwad. Thirdly, there is no warrant for suggesting that the two terms individual and Hindu undivided family have been used in anti-thesis with each other, for s. 3 being the charging provision is merely concerned with specifying different assessable units for purposes of assessment of wealth and imposition of the levy; it cannot be disputed that the Legislature can select persons, properties, transactions and objects for the imposition of a levy and for that purpose classify as many different assessing units as it could reasonably think necessary and this is how three assessable units namely, individual, Hindu undivided family and company (which was later omitted) have come to be specified in s. 3. In our view the specific mention of Hindu undivided family in the section does not result in the exclusion of group of individuals who only form a unit by reason of their birth like a Mapilla Tarwad from the operation of the section. It is difficult to accept the argument that if term individual was intended to include joint families or undivided families it was redundant to specify Hindu undivided families.In the context of the argument that the term individual can refer only to a single human being it will be opposite to refer to what this Court has observed in Commissioner of Income Tax, Madhya Pradesh and Bhopal v. Sodra Devi. At page 620 of the report this Court has said:".... word individual has not been defined under the Act (Indian Income Tax Act 1922) and there is authority for the proposition that the word individual does not mean only a human being but is wide enough to include a group of persons forming a natural unit." 5. The contention that because there are references to wife, daughter and child of an individual in s. 4 the term individual in s. 3 should be construed as referable to a single human being cannot obviously be accepted. Similarly absence of provisions similar to those applicable to Hindu undivided family for assessing group of individuals who form non-Hindu undivided families [provisions like s. 5(1) (ii)] cannot affect or control in any manner the charging section. On construction, therefore, we are clearly of the view that the term individual in s. 3 includes a group of individuals like a Mapilla Tarwad. 6. Furthermore, we would like to point out that the aforesaid construction would be in accord with the legislative practice obtaining in the taxing scheme in the country whereunder Parliament has always been treating and assessing Mapilla Marumakkathayam Tarwads in the status of individual under the various taxing statutes. In V. Venugopala Ravi Varma Rajah v. Union of India and Another (supra), a case arising under the Expenditure Tax Act (29 of 1957), the question for determination was whether s. 3 of that Act was violative of Art. 14 of the Constitution because a Hindu undivided family (specifically mentioned as a distinct assessing unit) governed by the Marumakkathayam Law had to pay tax at a higher rate by reason of the amalgamation of the expenditure of all the members of the family whereas a Mapilla undivided family was required to pay tax at a lo wer rate since the members of such family governed by the Marumakkathayam Law were liable to be taxed as individuals under the section and this Court answered the question in the negative. While doing so this Court pointed out how Parliament had bee n accustomed in enacting tax laws to make a distinction between a Hindu undivided family consisting of Hindus and undivided families of Mapillas and how for purposes of taxing statutes Mapilla Tarwads have always been regarded as individuals. The relevant observations in this behalf run as follows:"Under the taxing Acts the scheme of treating a Hindu Undivided Family has been adopted for a long time, e.g., the Indian Income-tax Act IX of 1869, Indian In come-tax Act IX of 1870, Indian Income-tax Act XII of 1871, Act VIII of 1872, Act II of 1886, Act VII of 1918, Act XI of 1922, Act 43 of 1961 have treated a Hindu Undivided Family as a distinct taxable entity. Similarly under the Wealth-tax 27 of 1957 and the Gift- tax Act 18 of 1958, the Hindu Undivided Family is made a unit of taxation. Under the Business Profits Tax Act, 21 of 1947 and the Excess Profits Tax Act, 1940 also the Hindu Undivided Family was ma de a unit of taxation. For the purposes of these Acts Mapilla Tarwads governed by the Marumakkathayam law have been regarded as individuals." (Emphasis supplied) 7. For all these reasons we hold that the term individual in s. 3 of the Act includes within its ambit Mapilla Marumakkathayam Tarwads and they are well within the purview of the taxing provisions of the enactment. Further, even after their inclusion in the term individual s. 3 of the Act would not be violative of Art. 14 for the same reasons for which s. 3 of the Expenditure Tax Act, 1957 has been held to be not so violative by this Court in V. Venugopalas case (supra). 8.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]In our view the specific mention of Hindu undivided family in the section does not result in the exclusion of group of individuals who only form a unit by reason of their birth like a Mapilla Tarwad from the operation of the section. It is difficult to accept the argument that if term individual was intended to include joint families or undivided families it was redundant to specify Hindu undivided familiesThe contention that because there are references to wife, daughter and child of an individual in s. 4 the term individual in s. 3 should be construed as referable to a single human being cannot obviously be accepted. Similarly absence of provisions similar to those applicable to Hindu undivided family for assessing group of individuals who form non-Hindu undivided families [provisions like s. 5(1) (ii)] cannot affect or control in any manner the charging section. On construction, therefore, we are clearly of the view that the term individual in s. 3 includes a group of individuals like a Mapilla TarwadFurthermore, we would like to point out that the aforesaid construction would be in accord with the legislative practice obtaining in the taxing scheme in the country whereunder Parliament has always been treating and assessing Mapilla Marumakkathayam Tarwads in the status of individual under the various taxing statutes. In V. Venugopala Ravi Varma Rajah v. Union of India and Another (supra), a case arising under the Expenditure Tax Act (29 of 1957), the question for determination was whether s. 3 of that Act was violative of Art. 14 of the Constitution because a Hindu undivided family (specifically mentioned as a distinct assessing unit) governed by the Marumakkathayam Law had to pay tax at a higher rate by reason of the amalgamation of the expenditure of all the members of the family whereas a Mapilla undivided family was required to pay tax at a lo wer rate since the members of such family governed by the Marumakkathayam Law were liable to be taxed as individuals under the section and this Court answered the question in the negative. While doing so this Court pointed out how Parliament had bee n accustomed in enacting tax laws to make a distinction between a Hindu undivided family consisting of Hindus and undivided families of Mapillas and how for purposes of taxing statutes Mapilla Tarwads have always been regarded as individuals. The relevant observations in this behalf run as follows:"Under the taxing Acts the scheme of treating a Hindu Undivided Family has been adopted for a long time, e.g., the Indian Income-tax Act IX of 1869, Indian In come-tax Act IX of 1870, Indian Income-tax Act XII of 1871, Act VIII of 1872, Act II of 1886, Act VII of 1918, Act XI of 1922, Act 43 of 1961 have treated a Hindu Undivided Family as a distinct taxable entity. Similarly under the Wealth-tax 27 of 1957 and the Gift- tax Act 18 of 1958, the Hindu Undivided Family is made a unit of taxation. Under the Business Profits Tax Act, 21 of 1947 and the Excess Profits Tax Act, 1940 also the Hindu Undivided Family was ma de a unit of taxation. For the purposes of these Acts Mapilla Tarwads governed by the Marumakkathayam law have been regarded as individuals." (Emphasis supplied)For all these reasons we hold that the term individual in s. 3 of the Act includes within its ambit Mapilla Marumakkathayam Tarwads and they are well within the purview of the taxing provisions of the enactment. Further, even after their inclusion in the term individual s. 3 of the Act would not be violative of Art. 14 for the same reasons for which s. 3 of the Expenditure Tax Act, 1957 has been held to be not so violative by this Court in V. Venugopalas case (supra).