S DANDAPANI Vs. ADDITIONAL GIFT TAX OFFICER

JUDGEMENT

(1.) THE question raised is whether the Gift Tax Act, 1958 (Act XVIII of 1958)enacted by the Parliament is within its legislative competence in so far as the Act purports to levy a tax on gifts of agricultural lands.

(2.) THE petitioner executed a settlement deed on 8th April 1957 in favour of his niece, Manonmani Ammal, and thereby gifted an extent of 20 acres 28 cents of agricultural lands. He also made a gift under an instrument dated 7th April 1957 of an extent of 114 acres 38 cents of agricultural lands in favour of his two sisters, gajalakshmi and Savithri. The Gift Tax Officer, Cuddalore, called upon the petitioner by notice dated 4th December 1958, to furnish a return in the prescribed form of all gifts made by him for the year ending 31st March 1958. The officer exercised his jurisdiction under the provisions of the Gift Tax Act, 1958. The petitioner submitted a return and disclosed the two settlement deeds referred to above. By order dated 7th April 1960, the officer assessed the petitioner to gift tax of Rs. 8520 valuing the agricultural lands at Rs. 1,54,000. On such assessment the petitioner was called upon to pay the tax on or before 15th May 1960. In this petition the petitioner prays for the issue of a writ of certiorari under Article 226 of the Constitution to quash the order of assessment to tax.

(3.) THE Gift Tax Act, 1958 is impugned on the ground that the topic of agricultural lands falls within the exclusive competence of the State Legislature, that the said topic is outside the purview of the powers of the Parliament and that a tax on agricultural lands which is no doubt permissible under the Act cannot be levied by the Parliament but only by the State Legislature. The short point that arises for consideration is whether the Parliament is competent to legislate imposing tax on gifts or transfers of agricultural lands.