Case: Commissioner Of Wealth Tax, Bihar Andorissa Vs. Kirpashankar Dayashankar Worah

3. The facts of the case as set out in the statement of the case submitted to the High Court may now be briefly stated: The respondent Kirpashanker D. Worah by means of a deed of trust dated July 19, 1949 transferred certain shares described in Schedule 7 of the trust deed and certain immovable properties and shares in business described in Schedule 8 of that deed unto himself as the trustee for making provision for the maintenance of himself, his wife, for the maintenance, education and the marriage expenses of his unmarried daughters and for the maintenance and education expenses of his minor sons. The main purpose of the trust is set out in paragraph 3 of the objects of the trust. That paragraph reads:To apply the income of the Trust Estate for the maintenance and the joint use and benefit of the Settlor and his wife the said Srimati Kanchan Kunver and also for the maintenance, education and marriage expenses of the said two minor daughters Kumari Kumud Bala and Kumari Jyoti and also for the maintenance and education of the Settlors minor sons Harsukhari Worah and Chanderakant Worah: Provided always that if the income of the Trust Estate is insufficient for the purpose of meeting any of the said expenses the Trustee shall have full liberty to dispose of or otherwise apply sufficient portion of the corpus of the Trust Estate for the purpose of discharging the Trust contained in this clauseh 4 of the Trust deed provides that in the event of the Settlor predeceasing his wife, the shares and securities mentioned in Schedule 7 was to be made over to his wife to be enjoyed by her as her absolute property, provided that if the Settlor predeceased his wife before the marriages of the two unmarried daughters had been performed, the trustee was to retain out of the shares and securities mentioned in the said Schedule sufficient number of shares for the purpose of meeting the marriage expenses of the said two daughters or either of them as the case may be.h (5) provides that after the marriages of both the daughters and/or after the death of both of such daughters, whichever happens first and also after the death of the Settlors wife and the attainment of majority of both the minor sons, the trustee was to hold the Trust Estate for the absolute use and benefit of the two said sons, Harsukhari and Chandrakant. It was further provided that the intention of the Settlor was that subject to the trust thereby created the said two minor sons would take a vested interest in the trust estate. Under Clause (4) of the said deed provision was made for the residence of the Settlor, his wife and the minor children free of rent in a part of the trust properties described in Sch. 8 until the determination of the trust as aforesaid. Even before the first valuation date with which we are concerned in these appeals, both the daughters had been married and the two sons had attained majority. The reference relates to wealth tax assessment of the assessee for the assessment years, the corresponding valuation dates being

Court's reasoning:
7. Leaving out the unnecessary words, Section 21 to the extent material for our present purpose can be recast thus :In the case of the assets chargeable to tax under this Act which are held by a trustee appointed under a trust deed by a duly executed instrument in writing whether testamentary or otherwise, the wealth tax shall be levied upon and recoverable from the trustee in the like manner and to the same extent as it would be leviable upon and recoverable from the person on whose behalf the assets we held and the provision of this Act shall apply accordingly8. It is plain from the language of Section 21 (1) that a trustee is also brought within its scope. But that section proceeds on the basis that a trustee is holding the trust property on behalf of one or more beneficiariesIn our opinion the ratio of that decision does not bear on the point under consideration though certain observations found therein may give some assistance to the respondent. Section 11 of the U. P. Agriculturaldoes not refer to trustees at all whereas Section 21 (1) of the Act specifically refers to trustees.It is true that it refers to a trustee as holding a trust property on behalf of other persons. The conception that the trustee is holding the trust property on behalf of others may not be in conformity with the legal position as contemplated by the Trusts Act but the legislature is competent in the absence of any restrictions placed on it by the Constitution to give its own meaning to the words used by it in a statute. There can be hardly any doubt that the Parliament while enacting Sec. 21 (2) of the Act proceeded on the basis that for the purpose of that Act the trustee is holding the trust property on behalf of the beneficiaries. The mere fact that this conception does not accord with the provisions of the Trusts Act does not invalidate Section 21 (1)It is true that a taxing provision must receive a strict construction at the hands of the Courts and if there is any ambiguity, the benefit of that ambiguity must go to the assessee. But that is not the same thing as saying that a taxing provision should not receive a reasonable construction. If the intention of the legislature is clear and beyond doubt then the fact that the provision could have been more artistically drafted cannot be a ground to treat any part of a provision as otiose.If the construction contended for on behalf of the respondent is accepted then a part of S. 21 (1) would become otiose. So long as the intention of the legislature is clear and beyond doubt, the courts have to carry out that intention. In our opinion the High Court did not take a proper view of the decision of this Court in Holdsworths case, AIR 1957 SC 887   (supra)17. Now coming to the question whether the shares of the beneficiaries under the trust deed on the relevant valuation dates are determinate or indeterminate we have to bear in mind the fact that on those dates the Settlor as well as his wife were alive. They had a right to be maintained out of the income of the trust properties. They had also a right of residence in house, situate in that property. The two sons of the Settlor had a right to be maintained and educated. That being so, there is no doubt that on the relevant dates, the shares of the beneficiaries were indeterminate. Hence the trustee had to be assessed under S. 21(4) as it stood at the relevant time.