Case: Commissioner Of Wealth Tax, West Bengal Vs. Champa Kumari Singhi &amp; Ors

"1. Whether, the assessee, a Jain undivided family, was not a Hindu undivided family within the meaning of S. 3, ofthe Wealth Tax Act, 1957, and as such the Tribunal was right in setting aside the assessment made on the assessee ?      2. Whether levy of Wealth tax on Hindu undivided family or joint family governed under Mitakshara school of Hindu law was beyond the legislative competence of Parliament and ultra vires the Constitution of India ?      3. Whether the Wealth Tax Act in so far as it purports to levy Wealth tax on Hindu undivided families is void and inoperative as it offends Art. 14 of the Constitution of India?"The High Court held that the Jains not being Hindus in the generally accepted sense of the term a Jain undivided family could not be a Hindu undivided family although the incidence of a Jain family and a Hindu family "may be the same or largely the same". According to the High Court, in order to form a Hindu undivided family its members must be Hindus, the assessee family being Jains, were not Hindus and so its members could not form a Hindu undivided family although it was "capable of forming a unit of very much of the same type and governed by the law applying to a Hindu undivided family. The answer to the first question, therefore, was returned in the affirmative and in favour of the assessee. The other two questions were not pressed before the High Court presumably in view of the decision in Banarsi Dass v. Wealth Tax Officer, Special Circle, Meerut, 56 ITR 224   = (AIR 1965 SC 1387  ).

Reasoning:
5. The main reasoning which prevailed with the High Court is that although Hindu law applies to Jains except in so far as such law is varied by custom, Jains do not become Hindus in the same way as Khojas and Cutchi Memons of Bombay and Sunni Borahs of Gujarat etc. cannot be regarded as Hindus although Hindu law applies to them in matters of inheritance and succession. Moreover, Hinduism does not include Hindu converts to Christianity and Islam and also dissenters from Hinduism who formed themselves into distinct communities or sects with peculiar religious usages so divergent from the principles of the Shastras that they could not be regarded as Hindus. Reliance was placed on the decision of the Mysore High Court in P. F. Pinto v. Commr. of Wealth Tax, Mysore, (1967) 65 ITR 123 (Mys). In that case the ancestors of the assessee were originally Hindus. They later on became converts to Christianity. It was found that although for the purposes of succession to property the Hindu law was still applicable to the family of the assessee, he could be assessed only as an individual for wealth tax purposes and could not be assessed in the status of a Hindu undivided family. The Mysore High Court was inclined to the view that the expression Hindu undivided family in S. 3 of the Act was limited to Mitakshra families or families of persons professing Hindu religion governed by Mitakshra law and thus it could not include a Christian undivided family although governed by Hindu law. The Calcutta High Court in the judgment under appeal, however, did not consider that the Mysore High Court was right in holding that S. 3 of the Act was limited only to Mitakshara families. It may be pointed out that so far as Income tax is concerned the expression Hindu undivided family has been held to have reference to all schools of Hindu law and not to one school only. (See Kalyanji Vithaldas v. Commr. of Income tax, Bengal, 64 Ind App 28 = (AIR 1937 PC 36  )"The term Hindu or Gentu, when used in Regulations Act, Statutes, and Charters in which Hindus or Gentus have been declared entitled to the benefit of their own law of succession and of contract, has been largely and liberally constructed. See the remarks at pages 184, 185, 186 (1868-69) 5 Bom HCR 172 (Lopes v. Lopes), where Sir Edward Hyde Easts evidence in 1830 before the House of Lords Committee is mentioned, in which he stated that Sikhs were treated as a sect of Hindus or Gentus of which they were a dissenting branch. The authorities, already quoted, show that Jainas are regarded as a sect of Hindus."Out of the decisions of the Privy Council, we may mention Sheokuarbai v. Jeoraj, AIR 1921 PC 77 in which their Lordships relied on the statement in Mynes Hindu law and Usage that Jains are of Hindu origin; they are Hindu dissenters and although "generally adhering to ordinary Hindu Law, that is, the law of the three superior castes, they recognise no divine authority in the Vedas and do not practice the Shradha or ceremonies for the dead"7. The above view has been challenged by Jain historians and writers and it has been maintained that the Jains are quite distinct from Hindus and have a separate code of law which unfortunately was not brought to the notice of the Courts. Kumaraswami Sastri, Officiating Chief Justice, delivering the judgment of the Bench in Bobbaladi Gatepa v. Bobbaladi Eramma, AIR 1972 Mad 228   elaborately discussed the contrary view and observed that if the matter were res integra he would be inclined to hold that modern research had shown that Jains were not Hindu dissenters but that Jainism had an origin and history long anterior to Smritis and commentaries which were recognised authorities of Hindu Law and usage10. We may next notice certain decisions in which the word Hindu as used in various statutes came to be interpreted by the Courts. In Kamawati v. Digbijai Singh, AIR 1922 PC 14, Section 331 of the Indian Succession Act 1865 has to be interpreted. According to that section the provisions of that Act were not to apply to intestate or testamentary succession to the property of any Hindu. It was held that the person who had ceased to be a Hindu in religion and had become a Christian could not elect to be bound by the Hindu Law in the matter of succession after the passing of the Indian Succession Act and that a Hindu convert to Christianity was solely governed by that Act. In other words, according to the Privy Council a person who had ceased to be a Hindu by religion was not Hindu within the meaning of Section 331 of the aforesaid Act. It was held in Bachebi v. Makhan Lal, (1881) ILR 3 All 55 that the term Hindu in Section 331 of the Indian Succession Act 1865 included a Jain and consequently in matters of succession Jains were not governed by that Act. It was pointed out that the ordinary Hindu law of Inheritance was to be applied to Jains in the absence of proof of custom or usage varying that law. The Privy Council in Rani Bhagwan Kuer v. J. C. Bose, (1904) ILR 31 Cal 11 (PC) expressed the view that a Sikh was a Hindu within the meaning of that term as used in Section 2 of the Probate and Administration Act 1881. It was pointed out that the Courts had always acted upon the premise that Sikhs were Hindus and that Hindu Law applied to them in the same way as it applied to Jains in the absence of custom varying that Law. It was observed:"It appears to their Lordships to be clear that in Section 331 the term Hindu is used in the same wide sense as in earlier enactments, and includes Sikhs. If it be not so, then Sikhs were, and are, in matters of inheritance, governed by the Succession Act, and Act based upon, and in the main embodying, the English law; and it could not be seriously suggested that such was the intention of the legislature"11. In Ambabai Bhaichand v. Keshav Bandochand Gujar. ILR (1941)Bom. 250   = (AIR 1941 Bom 233  .) the question was whether Jains were governed by Hindu law of Inheritance (Amendment) Act 1929 which applied to all persons governed by Mitakshara as modified by the Mayukha. It was argued in that case that the Indian Succession (Amendment) Act of 1929 speaks of Jains as well as Hindus and Sections 4 and 57 of the Indian Succession Act 1925 also did the same . The court pointed out that section 331 of the Indian Succession Act 1865 did not make any separate mention of Jains and even then it had been held that the term Hindu included Jains. The Hindu Wills Act of 1870 which applied to the territories under the Lt. Governor of Bengal and the cities of Bombay and Madras no doubt mentioned Jains as well as Hindus being governed by certain sections of the Succession Act, 1865 andthe Indian Succession Act, 1925 was a consolidating Act which repealed the previous Act of 1865 as well as the Hindu Wills Act of 1870. It was therefore probably thought necessary ex majore cautela to separately mention the Jains in the consolidating measure. However, in all the other enactments affecting the Hindu Law there was no separate mention of Jains along with the Hindus. The Jains were therefore, governed by the Hindu Law of Inheritance (Amendment) Act 1929. The mention of Jains separately in Article 25 of the Constitution was noticed in ILR (1954) Nag 30 = (AIR 1953 Nag 70) and it was observed that the framers of the constitution felt, having regard to the differences in the two faiths that an express mention might be made of all faiths ex abundant cautela and to put the matter beyond all controversy, and that faith is one thing and law is another and the Constitution could not be taken to have undone the long series of decisions on the subject. Before the amendment and codification of major branches of Hindu Law by the four statutes, i.e. the Hindu Marriage Act 1955, the Hindu Succession Act 1956, the Hindu Minority and Guardianship Act 1956, the Hindu Adoptions and Maintenance Act 1956, the undisputed position was that the Jains were governed by the Hindu law modified by custom and a Jain joint family was Hindu joint family with all the incidents attached to such a family under the Hindu law. The legislative practice also was to generally treat Jains as included in the term Hindu in various statutory enactments. Wherever Jains were mentioned in addition it was by way of abundant caution. The new statutes did not change the situation and it is not possible how the High Court in the judgment under appeal pressed them into service in support of its view. The fallacy underlying the reasoning of the High Court if that the artificial field of application of the law in those statutes shows that Jainism is not treated even as a form or a development of Hinduism. That is an erroneous approach. We are not concerned with the question whether Jains are a sect of Hindus or Hindu dissenters. Even if the religions are different, what is common is that all those who are to be governed by the provisions of these enactments are included in the term Hindu. They are to be governed by the same rules relating to marriage, succession, minority, guardianship, adoption and maintenance as Hindus. The statutes thus accord legislative recognition to the fact that even though Jains may not be Hindus by religion they are to be governed by the same laws as the Hindus. In this view of the matter the expression Hindu undivided family will certainly include the Jain undivided family. The latter class of family is not know to lawThe Jains are governed by all the incidents relating to the Hindu joint family. Hindu undivided family is a legal expression which has been employed in taxation laws. It has a definite connotation and embodies the meaning ascribed to the expression Hindu joint family.