Full Judgment Text
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PETITIONER:
V. VENUGOPALA RAVI VARMA RAJAH
Vs.
RESPONDENT:
UNION OF INDIA & ANR.
DATE OF JUDGMENT:
26/02/1969
BENCH:
SHAH, J.C.
BENCH:
SHAH, J.C.
RAMASWAMI, V.
GROVER, A.N.
CITATION:
1969 AIR 1094 1969 SCR (3) 827
1969 SCC (1) 681
CITATOR INFO :
RF 1970 SC 508 (13)
R 1972 SC 845 (15)
RF 1973 SC 623 (13)
R 1974 SC 849 (9)
R 1981 SC1269 (4,8,9)
ACT:
Expenditure Tax Act (29 of 1957), s. 3(1)-Applicable to
Hindu families governed by Marumakkattayam law but not to
Mappilla families governed by the Marumakkattayam law-If
violative of Art. 14 Constitution of India, 1950.
HEADNOTE:
The members of a Hindu undivided family governed by the
Marumakkattayam law, while remaining joint, had entered into
an agreement for separate ’enjoyment of certain properties
of the family by different members as permitted by their
customary law. For the assessment year 1958-59 its karta,
in the status of a Hindu undivided family, filed a return
under the Expenditure-tax Act, 1957, of the expenditure
incurred by him in respect of the property under his
’personal control and direct enjoyment’. The Expenditure-
tax Officer added the expenditure incurred by the other
members of the family in respect of properties set apart for
their use and enjoyment as the expenditure of the Hindu
undivided family under s. 3(1).
On the question, whether s. 3 is violative of Art. 14
because, a Hindu undivided family governed by the
Marumakkattayam law as to pay the tax at a higher rate by
reason of the unit of taxation under the section being the
Hindu undivided family there is an amalgamation of the ex-
penditure of all the members of the family, whereas, a
Mappilla family may pay tax at a lower rate since the
members of a Mappilla undivided family governed by the
Marumakkattayam law are liable to be taxed as ’individuals’
under the section,
HELD:The equal protection clause of the Constitution
allows a large play to legislative discretion in the matter
of classification. The power to classify may be exercised
so as to adjust the system of taxation in all proper and
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reasonable ways : the Legislature may select persons,
properties, transactions and objects, and apply’ different
methods and even rates of tax, if the Legislature does so
reasonably and if the classification is rational. A taxing
statute may contravene Art. 14 if it seeks to impose on the
same class of property, persons, transactions or occupations
similarly situate, an incidence of taxation which leads to
obvious inequality, but, a taxing statute is not exposed to
attack on the ground of discrimination merely because
different rates of taxation are prescribed for different
categories of persons, transactions, occupations or objects.
The courts will not strike down an Act as denying the equal
protection of laws Merely because other objects could have
been, but are not, taxed by the Legislature. [832 H; 833 A-
F]
Though the law applicable to Hindu undivided families
governed by the Marumakkattayam law and to the Mappilla
tarwad in North Malabar has the same characteristics in two
respects, namely, (a) tracing descent through females; and
(b) community of interest and unity of possession in respect
of the family property, the laws applicable to them in other
respects differ widely. Initially a common system of law
relating to family property of the tarwad was applicable to
Hindus and Mappillas governed
828
by the Marumakkattayam law, but since the enactment of the
Madras Marumakkattayam Act (22 of 1933) and other enactments
governing Hindus, and the Mappilla Marumakkattayam Act (17
of 1939) governing the Mappillas, there are few points of
similarity in property matters in the tarwads. The
application of the Islamic laws of marriage and inheritance
to the Mappillas has led to greater cleavage. The community
of Mappillas governed by Marumakkattayam law is a small
community, restricted only to the Northern area of Malabar
district and is dwindling because of the impact of the
Muslim law of inheritance applicable to sham obtained on
partition. Parliament has been accustomed to treating a
Hindu undivided family as a unit of taxation and to enacting
tax laws making a distinction between a Hindu undivided
family consisting of Hindus and undivided families of
Mappillas. The long course of legislative history in
matters of taxing income, wealth, gifts, capital gains’and
business profits indicates that the Legislature regarded
undivided Hindu families as a class to which the legislation
may appropriately be applied. Even though the basic scheme
of a Hindu undivided family governed by the Mitakshara law
is different from that of a family governed by the
Marumakkattayam law, a Hindu undivided family governed by
the Marumakkattayam law fails within he expression ’Hindu
undivided family. Therefore, Parliament, by making the Act
applicable to Hindu families and not to Mappilla families
governed by the Marumakkattayam law, has not attempted any
obvious inequality or made any discrimination violative of
Art. 14. [832 B-C, G-H; 834 E-G; 835 A-GI
Raja Jagannath Baksh Singh v. State of U.P., [1963] 1 S.C.R.
250,
U.S. law referred to.
JUDGMENT:
CIVIL APPELLATE JURISDICTION Civil Appeals Nos. 2436 and
2437 of 1966.
Appeals by special leave from the judgment and order dated
November 5, 1965 of the Kerala High Court in Writ Appeals
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Nos. 39 and 44 of 1964.
M. C. Chagla, C. K. Vishwa Nath Aiyar and R. Gopalakrish-
nan, for the appellant (in both the appeals).
D. Narsaraju, T. A. Ramachandran and B. D. Sharma, for the
respondents (in both the appeals).
The Judgment of the Court was delivered by
Shah, J. Rajah Padmanabha Ravi Varma was the karta of a
Hindu undivided family governed by the Marumakkattayam law.
On his death in 1961 the appellant his brother-became the
karta of the family. In 1909 the members of the family,
while remaining joint, had entered into ’an arrangement for
separate enjoyment of certain properties of the family by
different members. For the assessment year 1958-59 Rajah
Padmanabha filed, in the status of a Hindu undivided family,
a return under the Expenditure-tax Act of the taxable
expenditure incurred by him in respect of the property under
his "personal control and direct enjoyment". The
Expenditure-tax Officer added thereto
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the expenditure incurred by the other members of the family
in respect of properties set apart for their use and
enjoyment. The Expenditure-tax Officer also served ’a
notice of assessment under s. 15(2) calling for a return of
expenditure by the Hindu undivided family for the assessment
year 1959-60.
The appellant then moved petitions before the High Court of
Kerala under Art. 226 of the Constitution for writs quashing
the assessment and the notice of demand for the year 1958-59
and the notice calling for a return for the assessment year
1959-60 contending, inter alia, that he was not liable to be
assessed to tax on expenditure incurred in respect of
property not "under the, High Court of Kerala upheld the
contention. In appeal a Division Bench of, the High Court
set aside the order of the single Judge.
The appellant contends that the law which enables the
Expenditure-tax Officer to assess tax on the expenditure of
all members of the Hindu undivided family governed by the
Marumakkattayam law, discriminates, on the ground of
religion, between the Hindu undivided family and a Mappilla
undivided family governed by the Marumakkattayam law
resident in North Malabar.
Section 3 of the Expenditure-tax Act 29 of 1957 is the
charging section : insofar ’as it is relevant it reads
"(1) Subject to the other provisions contained
in this Act, there shall be charged for every
financial year, commencing on and from the
first day of April, 1958, a tax (hereinafter
referred to as expenditure tax) at the rate or
rates specified in the Schedule in respect-of
the expenditure incurred by any individual or
Hindu undivided family in the previous year
Provided that
Under the charging section tax is imposed on individuals and
Hindu undivided families. An undivided family which
consists of Hindus alone may be treated as a unit of
assessment: an undivided family whose members are not Hindus
will be assessed to tax as an "individual". Counsel for the
appellant contends’ that whereas a Hindu family governed by
the Marumakkattayam law is assessed to expenditure-tax on
the total expenditure incurred by all the members of the
undivided family, because the unit of taxation under s. 3 is
the Hindu undivided family, a Mappilla undivided family
governed by the Marumakkattayam law in
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North Malabar is liable to be assessed to tax as an
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"individual", and on that account at a lower rate.
Marumakkattayam law applied originally by usage to a
section of the Hindus inhabiting the South-Westem coastal
region in India. Some centuries ago a section of the Hindu
inhabitants of North Malabar were converted en masse to
Islam, but they still continued to remain governed by the
Marumakkattayam law especially in matters of property
relations among members of the family. The law administered
by the Courts to these communities is, subject to express
statutory provisions, a body of customs and usages which
have received judicial recognition.
The Mitakshara law of joint family is founded upon agnatic
relationship : the undivided family is characterised by
community of interest and unity of possession among persons
descended from a common ancestor in the male line. The
principal incident of Marumakkattayam law is that it is
matriarchate : members of the family constituting a
Marumakkattayam tarwad are descended through a common
ancestress in the female line with equal rights in the
property of the family. Under the customary Marumakkattayam
law no partition of the family estate may be made, but items
of the family property may by agreement be separately
enjoyed by the members. On death of the interest of a
member devolved by survivorship. Management of the family
propeerty remained in the hands of the eldest male member,
and in the absense of a male member a female member. A
tarwad may consist of two or more branches known as
thavazhies, each tavazhi or branch consisting of one of the
female members of the tarwad and her children and all her
descendants in the female line. Every tarwad consisted- of
a mother ’and her children-male and female-living in
commensality, with joint rights in property.
The District of Malabar formed part of the State of Madras
till October 31, 1956. The customary Marumakkattayam law
applicable to Malabar was modified in certain- respects from
time to time by the Madras Legislature e.g. the Malabar
Marriage Act 4 of 1896, the Malabar Wills Act 5 of 1898.
But the law relating to property relations between the
members of the tarwad remained in its customary form till
the fourth decade of this century. Under the customary law
partition of the property of the family could not be claimed
by an individual member or even by a thavazhi. It was so
laid down by a course of judicial decisions’ for over 75
years, and this rule was accepted as settled law till the
Madras Legislature. enacted the Madras Marumakkattayam Act,
22 of 1933 and the Mappilla Marumakkattayam Act 17 of 1939,
the former applying to Hindus and the latter to Mappillas
who are Muslims. There were however significant difference
between the two Acts. Under Act 22 of 1933 only
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a tarwad could claim partition (s. 38) (by the Madras
Marumakkattayam (Amendment) Act 26 of 1958 enacted by the
Kerala Legislature the right to claim partition was also
granted to individual members); property obtained by
partition was held with incidents of tarwad property [s.
38(2)]; and the Karnavan was not require& to maintain an
inventory of the property, but had to maintain a true and
correct account of the income and expenditure of the tarwad.
By the Madras Act 17 of 1939 any member of a Mappilla tarwad
could claim partition’ (ss. 13 & 14); succession to property
obtained by partition was governed by Istamic law (s. 18);
the Karnavan was required to maintain an inventory of family
property (s. 3); any member of the family could apply to the
Court for an order directing the Karnavan to give inspection
of accounts or inventory [s. 5(2)] surplus income had to be
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invested by the Karnavan (s. 7); and the Karnavan could be
removed by a suit (s. 11)
These and other statutory Modifications were applicable only
to the Malabar area which was originally part of the State
of Madras and not to the State of Travancore-Cochin as it
existed before the States Reorganization Act, 1956. There
were several legislative measures in the States of
Travancore and Cochin before those States merged with the
Indian Union, and in the State of Travancore-Cochin after
merger and in the State of Kerala, making changes in the
customary Marumakkattayam law: these were the Cochin
Makkathayam Thiyya Act 17 of 1115 (M.E.); Cochin
Marumakkattayam Act 13 of 1095 (M.E.). Cochin Nair Act 13 of
1095 (M.E.) and Act 29 of 1113 (M.E.); Cochin Paliam Tarwad
Act 8 of 1097 (M.F); Cochin Thiyya Act 8 of 1107 (M.E.);
Travancore Nanjinad Vellala Regulation 6 of 1101 (M.E.);
Travancore Nayar Regulation 1 of 1088 (M.E.) and 11 of 1100
(M.E.) Travancore Wills Act 6 of 1074 (M.E.). It is
sufficient to observe that by these statutes significant
changes were made in the customary laws governing the family
and property relations between the members governed by the
Marumakkattayam law.
The Hindu Succession Act 30 of 1956 also made inroads upon
the customary law.’ Section 3(h) defined the expression
"Marumakkattayam law", and by s. 7 it was provided that it
’a Hindu to whom the Marumakkattayam or Nainbudri law would
have applied, if the Hindu Succession Act had not been
passed, dies, his or her interest in the property of a
tarwad, tavazhi or illom shall devolve by testamentary or
intestate succession, not according to the Marumakkattayam
law or the Nambudri law, but under the Hindu Succession Act.
By s. 17 of the Act ss.8, 10, 15 and 23 apply to persons
governed by the Marumakkattayam law subject to certain
modifications.
832
The Hindu Adoptions and Maintenance Act 78 of 1956 the Hindu
Marriage Act 23 of 1955 also apply to Hindus governed by the
Marumakkattayam law and modify the law relating to family
relations.
Initially a common system of law relating to family property
of the tarwad was applicable to Hindus and Mapillas governed
by the Marumakkattayam law. Since the enactment of Madras
Act 22 of 1933, and the other Acts governing the Hindus, and
Act 17 of 1939 governing the Mappillas, points of similarity
even in property relations in the tarwads have considerably
narrowed. Application of the Islamic laws of marriage and
inheritance to the Mappillas led to greater cleavage. If a
member of a Mappilla Marumakkattayam family married a person
not governed by the Marumakkattayam law, property of the
person governed by Marumakkattayam law apparently devolved
according to that system of law, whereas the property of the
person governed by the Islamic law devolved according to
Islamic rules of succession. The result was that whereas
the interest of a, Mappilla governed by the Marumakkatayam
law devolved by survivorship, his separate property
descended by inheritance in accordance with the Islamic law.
Hindus governed by the Marumakkattayam law, since the
enactment of the Hindu Succession Act remained members of
the undivided family, but on death the interest devolved by
the rules prescribed by the Hindu Succession Act.
In a Hindu tarwad governed by the Marumakkattayam law the
descent is matriarch-ate and all members male and female
have equal shares in the property of the tarwad. Though not
a family governed by the Mitakshara law, it is still a Hindu
undivided family within the meaning of the Expenditure-tax
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Act. The property relations between members of a Mappilla
Marumakkattayam tarwad governed by the matriarchate with
equal shares for males and females were in certain respects,
already stated, different from the relations between members
of a Hindu joint family governed by the Marumakkattayam law.
The community of Mappillas governed by the Marumakkattayam
law is, compared to the Hindus, a small community restricted
only to the northern area of the Malabar District. it is
again a dwindling community because of the impact of the law
of inheritance applicable to share obtained on partition. it
is in the light of these special characteristics that-the
plea of discrimination must be considered.
Equal protection clause of the Constitution does not enjoin
equal protection of the laws as abstract propositions. Laws
being the expression of legislative will intended to solve
specific
8 33
problems or to achieve definite objectives by specific
remedies, absolute, equality or uniformity of treatment is
impossible of achievement. Again tax laws are aimed at
dealing with complex problems of infinite variety
necessitating adjustment of several disparate elements. The
Courts accordingly admit, subject to adherence to the
fundamental principles of the doctrine of equality, a larger
play to legislative discretion in the matter of Clai-
fication. The power to classify may be exercised so as to
adjust the system of taxation in all proper and reasonable
ways the Legislature may select persons, properties,
transactions :and objects, and apply different methods and
even rates of tax, if the ,Legislature does so reasonably.
Protection of the equality clause does not predicate a
mathematically precise or logically complete or symmetrical
classification : it is not a condition of the guarantee of
equal protection that all transactions, properties, objects
or persons of the same genus must be affected by it or at
all. If the classification is rational, the Legislature is
free to choose objects of taxation, impose different rates,
exempt classes of property from taxation, subject different
classes of property to tax in different ways and adopt
different modes of assessment. A taxing statute may
contravene Art. 14 of the Constitution if it seeks to impose
on the same class of property, persons, transactions or
occupations similarly situate, incidence of taxation, which
leads to obvious inequality. A taxing statute is not,
therefore, exposed to attack on the ground of discrimination
merely because different rates of taxation are prescribed
for different categories of persons, transactions,
occupations or objects.
It is for the Legislature to determine the objects on which
tax shall be levied, and the rates thereof. The Courts will
not strike down an Act as denying the equal protection of
laws merely because other objects could have been, but are
not, taxed by the Legislature : Raja Jagannath Baksh Singh
v. State of Uttar Pradesh and Another(1). The same rule has
been accepted by the Courts in America.
Wills in his Constitutional Law of the United States has
stated at p. 587
A state does not have to tax everything in
order to tax something. It is allowed to pick
and choose districts, objects, persons,
methods, and even. rates for taxation if it
does so reasonably."
As stated in Weaver’s Constitutional Law Art. 275 at p. 405
Me Fourteenth Amendment was not designed to
prevent a state from establishing a system of
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taxation or from effecting a change in its
system in all proper,
(1) (1963] 1 S.C.R. 220.
834
-and reasonable ways, nor to require the
states to adopt an ironclad rule of equality
to prevent the classification of property for
purposes of taxation or the imposition of
different rates upon different classes."
Weaver again says at p. 397
"Class legislation is that which makes an
improper discrimination by conferring
Particular privileges upon a class of persons,
arbitrarily selected from a large number of
persons, all of whom stand in the same
relation to the privilege granted and between
whom and the persons not so favoured no
reasonable distinction ,or substantial
difference can be found justifying the
inclusion of one and the exclusion of the
other from such privilege...... A
classification must not be arbitrary
artificial or evasive and there must be a
reason-able, natural and substantial
distinction in the nature of the class or
classes upon which the law operates. In
respect to such distinction, a legislative
body has a wide discretion and an Act will not
be held invalid unless the, classification is
clearly unreasonable and arbitrary."
It is unnecessary to multiply citations.
The Parliament has declared for the purpose of the Expendi-
ture-tax Act an undivided family of Hindus as a unit of
taxation and imposed tax at the rates prescribed. To fall
within the description the unit must be an undivided family
of Hindus. Within the expression "Hindu undivided family"
will fall an undivided family of Hindus governed by the
Marumakkattayam law. Even though the basic scheme of a
Hindu undivided family governed by the Mitakshara law and
the Marumakkattayam law is different in two important
respects, viz. the descent is through females and children
both males and females have equal rights to pro-perty-these
families are still Hindu undivided families. The law
applicable to Hindu undivided family governed by the
Marumakkattayam law, and to the Mappilla. tarwad in North
Malabar has the same characteristics in two principal
respects(a) descent is traced through females; and , (b)
there is community of interest and unity of possession in
respect of the family property. But the laws applicable to
those families in other respects widely differ.
The Mappilla families governed by the Marumakkattayam law
reside in a small part of the country and form numerically a
small community. The Parliament has again been accustomed
8 35
in enacting tax laws to make a ’distinction between a Hindu
Undivided Family consisting of Hindus and undivided families
of Mappillas. By the taxing Acts the Parliament could have
treated Mappilla tarwads as units of taxation. But the mere
fact that the law could, have been extended to another class
of persons who have certain characteristics similar to a
section of the Hindus but have not been so included is not a
ground for striking down the law. In treating a Hindu
Undivided Family as a unit of taxation under the
Expenditure-tax Act and not a Non-Hindu Undivided Family the
Parliament has not attempted an "obvious inequality".
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Under the taxing Acts the scheme of treating a Hindu Un-
divided Family has been adopted for a long time, e.g., the
Indian income-tax Act IX of 1869, Indian Income-tax Act IX
of 1870, Indian Income-tax Act XII of 1871, Act VIII of
1872, Act 11 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 Act
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 made a
unit of taxation. For the purposes of these Acts Mappilla
tarwads governed by the Marumakkattayam law have been
regarded as individuals.
This long course of legislative history in matters of taxing
income, wealth, gifts, capital gains and business profits
clearly indicates that the legislature regarded undivided
families of Hindus as a class to which the legislation may
appropriately be applied. An intention to effectively
administer the taxing Acts and not to discriminate on the
ground of religion may be attributed to the Legislature.
The Parliament in the present case having made the Expen-
diture-tax Act applicable to Hindus governed by the law of
the joint family, but not including Mappilla families who
are governed by the Mappilla Marumakkattayam Act has not
made any discrimination and the charging section is not
liable to be struck down on the ground that the Mappilla
family may have to pay tax at a lower rate, whereas a Hindu
Undivided Family, by reason of the amalgamation of the
expenditure of all the members of the family, may have to
pay tax at a higher rate.
The appeals fail and are dismissed with costs. One hearing
fee.
V.P.S. Appeals dismissed.
L11 Sup CI/69-4
836