Commissioner of Wealth Tax, West
Bengal Vs. Champa Kumari Singhi & Ors  INSC 18 (19 January 1972)
CITATION: 1972 AIR 2119 1972 SCR (3) 118 1972
SCC (1) 508
RF 1976 SC2450 (8)
Wealth Tax Act, 1957, Section 3-Jain
undivided family, whether Hindu Undivided Family.
The High Court held that the assessee, a Jain
undivided family was not a Hindu undivided family within the meaning of section
3 of Wealth Tax Act, 1957. According to the High Court, in order to form a
Hindu undivided family its members must be Hindus; the assessee family being
Jains were not Hindus and so its members could not form a Hindu undivided
family although it was "capable of forming a unit of very much of the same
type and governed by the law applying to a Hindu undivided family". On the
question whether the word 'Hindu' preceding the words undivided family
signifies that the undivided family should be of those (i) who profess Hindu
religion; or (ii) to whom Hindu Law applies; or, (iii) who though not
professing Hindu religion have come to be regarded as Hindu undivided family' by
judicial and legislative practice.
HELD : The expression Hindu undivided family
includes 'Jain undivided family'.
For a long time Courts seem to have taken the
view that Jains are Hindu dissenters. [123 E] Bhagwandas Tejmal v. Rajmal,
(1873) 10 Bom. HCR. 241, Lala Mohabeer Pershad v. Musammut Kunelar Koover, 8
Cal. W.Rep. 116 Civ. Rule and Sheokuarbai v. Jeoracaj,  P.C. 77, referred
The above view has been challenged by Jain
historians and writers and it has been maintained that Jains are quite distinct
from Hindus and have a separate code of law which unfortunately was not brought
to the notice of the courts.
if [124 E] Bobaladi Gateppa v. Bobbaladi
Eramma & Others, A.I.R. 1927 Mad. 228 and C.R. Jain. Jain Law, (1926) pp.
3-23, 219-258, referred to.
But, the suggestion that Jain law which is
found in the available books should still be applied and the error which has
crept in the matter of jains being governed by Hindu Law should be rectified
cannot possibly be followed particularly in view of statutory enactments which
in express terms have been made applicable to Jains' [125 B] Panna Lal &
Others v. Sitabai, I.L.R. 1954 Nagpur 30, Sheokuarbai v. Jeoraj,  P.C.
77, referred to.
Before the amendment and codification of
major branches of Hindu law, by the four statutes, i.e. the Hindu Marriage Act,
1955, the Hindu Succession Act, 1956, the Hindu Minority and Guardianship Act,
1956. the Hindu Adoption and Maintenance Act, 1956, the undisputed position was
that the Jains were governed by Hindu law modified by custom and a Jain joint
family was a Hindu joint family with all the incidents 119 attached to such a
family under the Hindu Law. The legislative practice also was to generally
treat Jains as included in the term 'Hindu' in various statutory enactments.
Wherever Jains were mentioned in addition it was ex abundanti cautela. The new
statutes did not change the situation. The fallacy underlying the reasoning of
the High Court is that the artificial field of application of the law in those
statutes shows that Jainism is not treated even as a form or a development of
Hinduism. Even if the religions are different, what is common is that all those
who are to be governed by the provisions of these enactments are included in
'the term 'Hindu'. They are to be governed by the same rules relating to
marriage, succession, minority, guardianship, adoption and maintenance as
The statutes thus accord legislative
recognition to the fact that even though Jains may not be Hindus by religion
they are to, be governed by the same laws as the Hindus. The expression 'Jain
undivided family' is not known to law. The Jains are governed by all the
incidents relating to the Hindu joint family. Hindu undivided family is a legal
expression which has been employed in taxation laws. It has a definite
connotation and embodies the meaning ascribed to the expression 'Hindu Joint
Family'. [127 E-128A] Kamawari v. Digbijai, A.I.R. 1922 P.C. 14, Bachebi v. Makhan
Lal & Another, I.L.R. 3 All. 55 Bhagwan Koer v. J. C. Bose, Ambalal v.
Keshav, Bandhochand Gujar, I.L.R. 1941 Bom. 250 and Kalyvani Vitlial Das v.
Commissioner of Income Tax, L.R. 64 I.A. 28, referred to.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 1090 of 1971 and 1686 of 1968.
Appeals by special leave/certificate from the
judgment and order dated August 25, 1967 of the Calcutta High Court in Wealth
Tax Reference No. 435 of 1963.
S. Mittra, B. D. Sharma and R. N. Sachthey,
for the appellant (in both the appeals).
S. T. Desai, D. N. Mishra, J. B. Dadachanji,
O. C. Mathur and Ravinder Narain, for the respondents (in both the appeals).
The Judgment of the Court was delivered by
Grover, J. This is an appeal by special leave from the judgment of the Calcutta
High Court arising out of a reference under the Wealth Tax Act 1957 in which
the question involved is one of importance, namely, whether a Jain undivided
family is included in the expression "Hindu undivided family" within
s. 3 of the Act.
The facts are few and may be stated. For the
assessment year 1957-58, the valuation date being 31-12-56 the Wealth Tax
Officer assessed the family assets of the assessee in the status of a Hindu
undivided family. On appeal to the Appellate Assistant Commissioner the
contentions raised, inter alia, were that (i) upon the description of the
assessee in the notice of demand the assessment should be deemed to have been
made in the status of an association of persons which was not a unit on which
tax 120 could be levied under the Act; (ii) even if the assessee was to be
treated as a Hindu undivided family, the imposition of wealth tax on such
family was ultra vires the Constitution.
These contentions failed before the Appellate
Assistant Commissioner. The Appellate Tribunal, to whom the matter was taken in
appeal, held that the assessee followed the Jain religion and since the unit
chargeable to wealth tax under S. 3 of the Act was either individual or Hindu
undivided family or company none of the units covered the case of the assessee
which was a Jain family. According to the Tribunal Jains were not Hindus and,
therefore, the expression "Hindu undivided family" in S. 3 did not
cover the case of a Jain, family. The Tribunal set aside the assessment on this
ground alone. The Commissioner of Wealth tax filed an application under S.
27(1) of the Act praying that the question of law which arose out of the order
of the Tribunal be referred to the High Court. At the time of the hearing of
that application it was suggested on behalf of the assessee that further
questions arising out of the order of the Tribunal should also be referred.
Finding that questions other than the question suggested by the Commissioner of
Wealth tax arose out of the order, the Tribunal referred the following question
of law for the opinion of the High Court :"1. Whether, the assessee, a
Jain undivided family, was not a Hindu undivided family within the meaning of
s. 3 of the Wealth tax Act, 1957, and as such the Tribunal was right in setting
aside the assessment made on the assessee ?
2. Whether levy of Wealth tax on Hindu
undivided family or joint family governed under Mitakshra school of Hindu law
was beyond the legislative competence of Parliament and ultra vires the
Constitution of India ?
3. Whether the Wealth Tax Act in so far as it
purports to levy Wealth tax on Hindu undivided families is void and inoperative
as it offends Article 14 of the Constitution of India ?" The High Court
held that the Jains not being Hindus in the generally accepted sense of the
term a Jain undivided family could not be a Hindu undivided family although the
incidence of a Jain family and a Hindu family "may be the same or largely
the same". According to the High Court, in order to form a Hindu undivided
family its members must be Hindus, the assessee family being Jains, were not
Hindus and so its member,,;
121 could not form a Hindu undivided family
although it was "capable of forming a unit of very much of the same type
and governed by the law applying to a Hindu undivided family".
The answer to the first question, therefore,
was returned in the affirmative and in favour of the assessee. The other two
questions were not pressed before the High Court, presumably in view of the
decision in Banarsi Dass v. Wealth Tax Officer, Special Circle, Meerut(1).
According to s. 2 (c) of the Act assessee
means a person by whom Wealth tax or any other sum of money is payable under
the Act and includes (i) every person in respect of whom any proceedings under
this Act has been taken for the determination of wealth tax payable by him or
by any other person or the amount of refund due to him or such other person;
(ii) every person who is deemed to be an
assessee under this Act;
(III)******" Section 3 is in the
following terms "Charge of wealth tax--Subject to the other provisions
contained in this Act, there shall be charged for every (assessment year)
commencing on and from the first day of April 1957, a tax (hereinafter referred
to as 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".
The only other provision in the Act in which
the expression "Hindu"' undivided family" occurs is s. 20. It
deals with assessment after partition of a Hindu undivided family.
Under s. 3 of the Act it is the Hindu
undivided family which is one of the assessable entities. It should be
distinguished from a Hindu co-parcenary which is a much narrower body than the
Joint family. A Hindu joint family consists of all persons lineally descended
from a common ancestor, and includes their wives and unmarried daughters.
A Hindu coparcenary includes only those who
acquire by birth an interest in the joint coparcenary property, being the sons,
grandsons and great grandsons of the holder of the joint property. Thus there
can be a joint Hindu family (1) 56 I.T.R. 224.
9-L864SupCI/72 122 consisting of a single
male member and widows of deceased coparceners. It must be remembered that the
words "Hindu undivided family" are used in the Income tax statutes
with reference not to one school of Hindu law only but to all schools. The sole
previous decision in which an identical question came up for consideration
under the Income tax law is that of the Nagpur Judicial Commissioner's Court in
Nathu Sao v. Commissioner of Income tax C.P. & Berar(1). In that case the
assessee was a member of the Lad Vaish community and was a Jain. He claimed to
be governed by the Hindu law and contended that his widowed mother and widowed
aunt who lived with him 'constituted a Hindu joint family. it was held that
ordinarily Hindu Law applied to Jains in the absence of proof of custom or
usage to the contrary and that the expression "Hindu undivided family did
not mean a Hindu coparcenary but was a wider expression which would take in the
widowed mother and the widowed aunt of the assessee in that case. No contrary
view seems to have been expressed in any other case subsequently and it appears
that it is for the first time that the Calcutta High Court in the judgment
under appeal has upheld the contention that a Jain undivided family cannot fall
within the expression "Hindu undivided family". It will not be out of
place to mention that indisputably ever since income tax laws have been in
force no distinction has ever been made between a Jain undivided family and a
Hindu undivided family and a Jain family has always been assessed as a Hindu
undivided family. Even in the forms prescribed for making returns of Income tax
no such differentiation or distinction has ever been made.
The main reasoning which prevailed with the
High Court is that although Hindu law applies to Jains except in so far as such
law is varied by custom, Jains do not become Hindus in the same way as Khojas
and Cutchi Memons of Bombay and Sunni Borahs of Gujarat etc. cannot be regarded
as Hindus although Hindu law applies to them in matters of inheritance and
succession. Moreover, Hinduism does not include Hindu converts to Christianity
and Islam and also dissenters from Hinduism who formed themselves into distinct
communities or sects with peculiar religious usages so divergent from the
principles of the Shastras that they could not be regarded as Hindus. Reliance
was placed on the decision of the Mysore High Court in P. F. Pinto v.
Commissioner of wealth Tax, Mysore (2). In that case the ancestors of the
assessee were originally Hindus. They later on became converts to Christianity.
It was found that although for the purposes of succession to property the Hindu
law was still applicable to the family of the assessee, he could be assessed
only as an (1) 2 I.T.R. 463.
(1) 65, I.T.R. 123.
123 individual for wealth tax purposes and
could not be assessed in the status of a Hindu undivided family. The Mysore
High Court was inclined to the view that the expression 'Hindu undivided
family' in s. 3 of the Act was limited to Mitakshra families or families of
persons professing Hindu religion governed by Mitakshra law and thus it could
not include a Christian undivided family although governed by Hindu law. The
Calcutta High Court in the judgment under appeal, however, did not consider
that the Mysore High Court was right in holding that s. 3 of the Act was
limited only to Mitakshra families. It may be pointed out that so far as Income
tax law is concerned the expression 'Hindu undivided family' has been held to
have reference to all schools of Hindu law and not one school only. [See
Kalyani Vithal Das v. Commissioner of Income tax(1)].
The real question for determination is whether
the word 'Hindu' preceding the words 'undivided family' signifies that the
undivided family should be of those (i) who profess Hindu religion; or (ii) to
whom Hindu law applies; or (iii) who though not professing Hindu religion have
come to be regarded as Hindu undivided family by judicial decisions and
legislative practice. It may be mentioned that for a long time the courts and
particularly the Privy Council seem to have taken the view that Jains are of
Hindu origin; they are Hindu dissenters and although generally adhering to the
ordinary Hindu Law they do not recognise any divine authority of the Vedas nor
do they practice a number of ceremonies observed by the Hindus. But the modern
trend of authority is against the view that Jains are Hindu dissenters. As a
result of comparative research in Hinduism, Jainism and Buddhism, it is being
emphatically claimed that the theory that Jains are Hindu dissenters is based
on a misreading of the ancient authorities relating to these religions (See C.
R. Jain-Jain Law'-pp. 3-23 and 21,9258). One of the early decisions in which
Jains were stated to be of Hindu origin being Hindu dissenters is that of
Westropp C.J. in Bhagwandas Tejmal v. Rajmal ( 2 ). The learned Chief Justice
based his view on high authority including the researches of Mr. Mountstuart
Elphintone, Late Col. Mackenzie (9th Vol. of the Asiatic Researches, including,
the essay of Mr. Cole Brooke on the Sect of Jainas), the work of Abbe Dubois on
the Manners etc. of the People of India and tile elaborate account of the Jain
sect in the First Volume of Prof. H. H. Wilson's work. He also referred to
certain decisions of the Sudder Divan Adault in Calcutta and the High Court of
Calcutta, in particular to the opinion of Peacock C.J. in Lola Mohabeer Pershad
v. Musammut Kundar Koover(3).
(2) (1873) 10 Bom. HCR 241.
(1) L.R. 64 I.A. 28.
(3) 8 Cal. W. Rep. 116 Civ. Rul.
124 The following passage from the judgment
of Westropp C.J. is noteworthy :
"The term Hindu or Gentu, when used in
Regulations Act, Statutes, and Charters in which Hindus or Gentus have been
declared entitled to the benefit of their own law or succession and of
contract, has been largely and liberally construed. See the remarks at pages
184, 185, 186, 5 Bom. High C. Reports (Lopes v. Lopes), where Sir Edward Hyde
East's evidence in 1830 before the House of Lords' Committee is mentioned, in
which he stated that Sikhs were treated as a sect of Hindus or Gentus of which
they were a dissenting branch.
The authorities. already quoted, show that
Jainas are regarded as a sect of Hindus." Out of the decisions of the
Privy Council, we may mention Sheokuarbai v. Jeoraj(1) in which their lordships
relied on the statement in Mayne's Hindu law and Usage that Jains are of Hindu
origin; they are Hindu dissenters and although "generally adhering to
ordinary Hindu law, that is, the law of the three superior castes, they
recognise no divine authority in the Vedas and do not practice the Shradha or
ceremonies for the dead".
The above view has been challenged by Jain
historians and writers and it has been maintained that the Jains are quite
distinct from Hindus and have a separate code of law which unfortunately was
not brought to the notice of the courts.
Kumaraswami Sastri, Officiating Chief
Justice, delivering the judgment of the Bench in Bobbaradi Gateppa v. Bobbaladi
Eramma & Others(2) elaborately discussed the contrary view and observed
that if the matter were res Integra he would be inclined to hold that modem
research had shown that Jains were not Hindu dissenters but that Jainism had an
origin and history long anterior to Smritis and commentaries which were
recognised authorities of Hindu law and usage.
Mr. C. R. Jain in his work "Jain
Law" written in 1926 has discussed the findings of various Orientalists subsequent
to those mentioned in the judgment of Westropp C.J. and has put forward the
thesis that Hinduism and Jainism were parallel creeds though they shared the
same form of social order and mode of living. Jain Law was quite independent of
Hindu law. According to him the Courts had tried on each occasion to ascertain
the Jain Law but unfortunately for various reasons Jains concealed their
Shastras and objected to their production in Courts. He has emphasised that
Jain Law which is found in the available books should still be applied and the
error which has crept in the matter (1) A.I.R 1927 Mad. 228.
(2) A.I.R. 1927 Mad. 228.
125 of Jains being governed by Hindu Law
should be rectified.
Since 1926 there have been several enactments
apart from the codification of certain major Branches of Hindu law which in
express terms have been made applicable to Jains. The course suggested by C. R.
Jain cannot possibly be, followed particularly in the presence of statutory
In Panna Lal & Others v. Sitabai(1),
Hidayatullah J. (as he then was) delivering the judgment of the Division Bench
observed that it was too, late in the day to contend that "Jains' are not
included in the term "Hindus" for the purposes of law. He referred to
Mayne's Hindu law as also the leading cases on the point apart from West and
Buhler's Hindu Law (4th Edn.), Gopal Chandra Sarkar's Hindu Law (7th Edn.) and
Hari Singh Gour's Hindu Code (4th Edn.). All these are acknowledged authorities
and the conclusion which was derived not only from the statements contained in
their works on Hindu law but also from decided cases was that the Jains were to
be regarded as Hindus for the purposes of law though they seem to dissent from
some of the principles of orthodox Hinduism. In the Nagpur case the question
which was being considered was whether The Hindu Women's Right to Property Act
1937 was meant to apply to Jains as well or to Hindus proper. It was in that
connection that theextent to which Jains were governed by Hindu law or were to
be treated as Hindus for purposes of that law came up for discussion. The
following passage may be reproduced with advantage :"The legislature must
be taken to be aware of the pronouncements of the Privy Council as well as the
leading decisions of the Indian High Courts where a liberal interpretation was
given to the term 'Hindu'. We do not think that the Legislature used the term
without advertence to these dicta and, in our judgment, the Legislature must be
deemed to have used the term "Hindu' in that larger sense which has been
explained by Mayne at page 5 of his treatise in the passage quoted by us
elsewhere and which has been the foundation of decisions on the subject in the
courts of India".
It may be mentioned that the statement from
Mayne's Hindu Law referred to above is the same which was relied upon by the
Privy Council in Sheokuarbai v. Jeoraj (2) We may next notice certain decisions
in which the word 'Hindu' as used in various statutes came to be interpreted by
the Courts. In Kamawati v. Digbijai Singh(3) s. 331 of the Indian (1) I.L.R.
1954 Nagpur 30.
(3)  P.C. 77.
(2) A.I.R. 1922 P.C.14.
126 Succession Act 1865 had to be
interpreted. According to that section the provisions of that Act were not to
apply to intestate or testamentary succession to the property of any Hindu. It
was held that the person who had ceased to be a Hindu in religion and had
become a Christian could not elect to be bound by the Hindu Law in the matter
of succession after the passing of the Indian Succession Act and that a Hindu convert
to Christianity was solely governed by that Act. In other words, according to
the Privy Council a person who had ceased to be a Hindu by religion was not a
Hindu within the meaning of s. 331 of the aforesaid Act. It was held in Bachebi
v. Makhan Lal & Another(1) that the term 'Hindu' in s. 331 of the Indian
Succession Act 1865 included a Jain and consequently in matters of succession
Jains were not governed by that Act. It was pointed out that the ordinary Hindu
law of Inheritance was to be applied to jains in the absence of proof of custom
or usage varying that law.
The Privy Council in Bhagwan Koer v. J. C.
Bose & Others (2 ) expressed the view that a Sikh was a 'Hindu' within the
meaning of that term as used in S. 2 of the Probate and Administration Act
1881. It was pointed out that the Courts had always acted upon the premise that
Sikhs were Hindus and that Hindu Law applied to them in the same way as it
applied to Jains in the absence of custom varying that Law. It was observed :
"It appears to their Lordships to be
clear that in s. 331 the term "Hindu' is used in the same wide sense as in
earlier enactments, and includes Sikhs. if it be not so, then Sikhs were, and
are, in matters of inheritance, governed by the Succession Act, and Act based
upon, and in the main embodying, the English law; and it could not be seriously
suggested that such was the intention of the legislature".
In Ambalal v. Keshav Bandhochand Gujar ( 3 )
the question was whether Jains were governed by Hindu law of Inheritance (Amendment)
Act 1929 which applied to all persons governed by Mitakshara as modified by the
Mayukha. It was argued in that case that the Indian Succession (Amendment) Act
of 1929 speaks of Jains as well as Hindus and ss. 4 and 57 of the Indian
Succession Act 1925 also did the same. The Court pointed out that s. 331 of the
Indian Succession Act 1865 did not make any separate mention of Jains and even
then it had been held that the term 'Hindu' included Jains. The Hindu Wills Act
of 1870 which applied to the territories under the Lt. Governor of Bengal and
the cities of Bombay and Madras no doubt mentioned Jains as well as Hindus
being governed by certain sections of the (1) I.L.R. 3 All. 55. (2) I.L.R. 31
(3) I.L.R. 1941 Bom. 250.
127 Succession Act of 1865 and the Indian
Succession Act 1925 was a commodating Act which repealed the previous Act of
1865 as well as Hindu Wills Act of 1870. It was, therefore, probably thought
necessary ex-majore cautela to separately mention the Jains in the
consolidating measure. However, in all the other enactments affecting the Hindu
Law there was no separate mention of Jains along with the Hindus. The Jains
were, therefore, governed by the Hindu Law of Inheritance (Amendment) Act 1929.
The mention of Jains separately in Article 25 of the Constitution was noticed
in Pannalal v. Sita Bai(1) and it was observed that the framers of the Constitution
felt, having regard to the differences in the two faiths that an express
mention might be made of all faiths ex-abundanti cautela and to put the matter
beyond all controversy, and that faith is one thing and law is another and the
Constitution could not be taken to have undone the long series of decisions on
the subject. Before the amendment and codification of major branches of Hindu
law by the four statutes, i.e. The Hindu Marriage Act 1955, the Hindu
Succession Act 1956, the Hindu Minority and Guardianship Act 1956, the Hindu
Adoption and Maintenance Act, 1956, the undisputed position was that the Jains
were governed by the Hindu law modified by custom and a Jain joint family was a
Hindu joint family with all the incidents attached to such a family under the
Hindu law. The legislative practice also was to generally treat Jains as
included in the term 'Hindu' in various statutory enactments. Wherever Jains
were mentioned in addition it was only by way of abundant caution. The new
statutes did not change the situation and it is not possible how the High Court
in the judgment under appeal pressed them into service in support of its view.
The fallacy underlying the reasoning of the High Court is that the artificial
field of application of the law in those statutes shows that Jainism is not
treated even as a form or a development of Hinduism.
That is an erroneous approach. We are not
concerned with the question whether Jains are a sect of Hindus or Hindu
dissenters. Even if the religions are different, what is common is that all
those who are to be governed by the provisions of these enactments are included
in the term 'Hindu'. They are to be governed by the same rules relating to
marriage, succession, minority, guardianship, adoption and maintenance as
Hindus. The statutes thus accord legislative recognition to the fact that even
though Jains may not be Hindus by religion they are to be governed by the same
laws as the Hindus. In this view of the matter the expression 'Hindu undivided
family' Will certainly include the 'Jain undivided family'. The latter class of
family is not known to law. The Jains are governed by all the incidents
relating to the Hindu joint family. Hindu undivided (1) I.L.R.1954 Nagpur 30.
128 family is a legal expression which has
been employed in taxation laws. It has a definite connotation and embodies the
meaning ascribed to the expression 'Hindu joint family'.
For the above reasons the appeal is allowed
and the question referred is answered in favour of the Revenue and against the
assessee. There will be no order as to costs in this Court. The appeal by
Certificate (CA 1686/68) being defective for want of reasons is her-by
K.B.N. Appeal allowed.