M T JOSEPH Vs. GIFT TAX OFFICERS

JUDGEMENT

(1.) The common question that arises for decision in all these four original petitions is regarding the competency of Parliament to enact the Gift Tax Act, 1958, viz , Central Act 18 of 1958, levying tax on gifts of agricultural land. In O.P. Nos. 323 of 1959, 1339 of 1959 and 117 of 1960, the respective petitioners seek the issue of a writ of prohibition restraining the respective Gift Tax Officers from enforcing the provisions of the Gift Tax Act, in respect of certain gifts of agricultural land admittedly made by them. In O.P. No. 131 of 1961 there has been an actual order of assessment passed against the petitioner levying gift tax, by the Gift Tax Officer concerned, and the relief asked for is to have the order of assessment quashed. The petitioners have not challenged the competency of Parliament to levy gift tax in respect of properties, movable or immovable, other than agricultural lands.

(2.) According to the petitioner in each of these writ petitions, the scheme of the various lists in VIIth schedule of the Constitution, will indicate that power to legislate and levy tax regarding agricultural properties and income therefrom is solely and exclusively vested in the State Legislatures and that Parliament has no power to levy tax on gifts of agricultural lands. In particular, Entry, 18, in List II of the VIIth schedule has been very strongly relied upon as giving exclusive jurisdiction to the State Legislature over such matters.

(3.) According to the Revenue, levy of gift tax on agricultural lands, is not provided either in the State List or in the Concurrent List; and, therefore, it falls under the residuary power vested in Parliament under clause (2) of Art.248, read with Entry 97 in the Union List; and therefore Parliament is competent to enact the legislation, in question, even regarding agricultural lands.