NANJE GOWDA Y D Vs. UNION OF INDIA

JUDGEMENT

(1.) ON a reference made by one of us (Puttaswamy, J.:) this case has been posted before us for disposal.

(2.) ONE Y. D. Nanje Gowda of Belur down, Hassan District, who is the petitioner before us, is the Karta of a Hindu Undivided Family ("HUF") consisting of himself, his wife and several other members and is an assessee under the WT Act of 1957 (Central Act No. 27 of 1957) ("the Act"), on the file of the First WTO, Hassan (the "WTO"). The wife of the petitioner had her own net wealth exceeding Rs. 1,00,000 during the relevant assessment year. For the asst. yr. 1977-78, the petitioner in the status of an HUF filed a return under the Act before the WTO, who by his order dt. 20th Sept., 1977, (Exhibit-A) completed the assessment as on 31st March, 1977, at Rs. 5,83,100 and levied tax at the rates chargeable thereto under the Act. On the determination of net wealth made by the WTO, the petitioner is not aggrieved. But, he is only aggrieved by the higher rate of tax levied on him which is also in conformity with the Act. Hence, the petitioner in this petition under Art. 226 of the Constitution has challenged Item No. 2 of Part I of the First Schedule to the Act introduced by the Finance Act of 1974 (Central Act No. 20 of 1974), as amended by the Finance Act of 1976 (Central Act No. 66 of 1976) (Finance Acts), as violative of Arts. 14 and 19(1)(f) of the Constitution.

(3.) SRI Prasad has contended that the amendment made to the Act by the Finance Acts subjecting an HUF with one member whose net wealth exceeds rupees one lakh to higher rate of tax was discriminatory, irrational, arbitrary and was violative of Art. 14 of the Constitution. Elaborating this contention, SRI Prasad has urged that the Amending Acts had the effect of inventing a new class of HUFs unknown to Hindu law for purposes of subjecting them to higher rate of wealth-tax though the wealth of the individual was not derived from an HUF itself and such a classification was violative of Art. 14 of the Constitution. SRI Ashok Mallya, an advocate appearing in similar cases whom we permitted to intervene, has supported SRI Prasad.