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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 8 29 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 830 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 831 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