MAHAVIRPRASAD BADRIDAS Vs. YAGNIK M S SECOND WTO

JUDGEMENT

(1.) BY this petition the competence of the Union Parliament to enact the Wealth -tax Act (XXVII of 1957), in as far as that Act seeks to levy wealth -tax on Hindu undivided families, is challenged. The petitioner, who is the karta of a Hindu undivided family and is being assessed to wealth -tax in the status of Hindu undivided family was, by notice dated 12th July, 1958, issued in exercise of powers conferred by section 14(2) of the Wealth -tax Act, called upon by the Second Wealth -tax Officer, C -II Ward, Bombay, to furnish a return of the net wealth of his undivided Hindu family. The petitioner claims that the notice is invalid because section 3 of the Wealth -tax Act is ultra vires the Union Parliament in so far as that section authorises the levy of wealth -tax on the net wealth of a Hindu undivided family.

(2.) BY section 3 of Act 27 of 1957 liability to pay for every financial year commencing on and from the 1st day of April, 1957, a tax referred to as the wealth -tax in respect of the net wealth on the corresponding valuation date of every individual, Hindu undivided family and company at the rate or rates specified in the Schedule is imposed. The petitioner contends that to the extent the Union Parliament authorised the levy of wealth -tax on Hindu undivided families as units, the legislation is ultra vires, the in support of that contention reliance is placed upon entry No. 86 in List I of the Seventh Schedule to the Constitution of India.

(3.) IT is submitted that legislation imposing taxes on the capital value of the assets only of individual and of companies but not of Hindu undivided families can, under the authority of entry No. 86, be enacted by the Union Parliament.