INSPECTOR ASSISTANT COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALES TAX, KOZHIKODE versus V. K. RAMUNNI PANIKKAR, RECEIVER OF ZOMORIN ESTATE

Citation: [1972] 1 S.C.R. 934 · Decided: 05-10-1971 · Supreme Court of India · Bench: K.S. HEGDE · Disposal: Dismissed

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Judgment (excerpt)

934 
INSPECTOR 
ASSISTANT 
COMMISSIONER 
AGRICULTURAL 
INCOME 
TAX AND 
SALES 
KOZHIKODE 
OF 
A 
TAX,. 
v. 
V. K. RAMUNNI PANIKKAR, RECEIVER OF ZOMORIN 
ESTATE 
October 5, 1971 
[K. S. HEGDE AND A, N. GROVER, JJ.J 
Hindu Succession Act, 1956, s. 7(3) and Kera/a Agricultural /ncome-
1«x Act, 1950, s. 24(1)-Sthani liable to pay t'flx-Death of Sthani-
Liabi/ity of other members of Tarwad. 
Section 7(3) of the Hindu Succession Act, 1956, by a fiction deems 
that the Sthanam property stands divided amongst the sthani and the 
members of his tarwad, a split second before the death of the sthani. The 
members of the tarwad took the property as co-owners and not as heirs 
of the deceased sthani. The purpose of the fiction was to gradually abolish 
the sthanams and to provide for the devolution of the sthanam properties 
on the members of sthani's tprwcd except as regards one per capita share 
which the personal heirs of the sthani are to inherit as the heirs of the 
Sthani. 
On May 2, 1958, the Zamorin of Calicut died. In respect of the agri-
cultural income-tax under the Kerala Agricultural Income-tax Act, 1950, 
which he was liable to pay for the period November I, 1956 to March 31. 
1958, the person who took possession of the sthanam property claiming 
10 be the succeeding sthani was assessed to tax as the successor sthani. 
After his death, the Agricultural Income-tax Officer attempted to collect 
the tax from the successive senior most membe'rs of the Zamorin's family. 
The validity of the ~ssessment was challenged and the High Court held 
that the liability to pay the tax and penalty imposed was only that of the 
l'ersonal heirs of the person who took possession of the properties imme-
·diately after the death of the Zamorin, and that, only to the extent of the 
assets of that person which had come into their possession. Thel-eafter, 
it was ordered by the Department that, as the entire sthanam property 
had cJ.evoh-ed on the 693 members of the tarwad all those persons were 
liable to pay the tax and penalty, but the order was made without notice 
to the parties. 
When the authdrities threatened to proceed against the 
properties in the hands of the Receivers, who were appointed in the par-
tition suit in the Zamorin's family, the Receivers filed a writ petition 
challenging the right of the Agricultural Income-tax Officer to collect the 
arrears of tax and penalty from out of the properties in their hands. The 
High Court quashed the demand holding that the only persons who were 
liable to pay the tax were the personal heirs of the Zamorin as it was they 
who had received the income. 
Dismissing the appeal to this Court, 
HELD : Under the law relating to sthanams the st1"'ni was alone 
entitled to the income of the sthanam properties. Therefore the income 
of the sthanam property in the present case, during November I, 1956 to 
March 31, 1958 was the exclusive property of the Zamorin who ha\! the 
sthani. Hence, he alone w.S liable to pay the tax. Under the Agl"icultural 
Income-tax Act, no charge is created~ on property in respect .of. t!'e arrears 
of agricultural income-tax. Under s. 24(1) of the Act the hab1hty to pay 
B 
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A 
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D 
E 
F 
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ASST. COMMR. AGRIC. v. v. K. RAMUNNI (Hegde, J.) 
935 
the arrears of tax due from the deceased sthani fell on his personal heirs 
and tnat, only to the extent they received any of his asset's. The assessment 
made of the person who took possession of the properties after the Zamorin'.1i 
death as the successor sthani was an invalid assessment, because, legally 
he never became the sthani. On the death of the Zamorin the sthanani 
came to an end and the only persons who could have represented the 
estate of the Zamorin were his pCrsonal heirs \vho, however, were not 
made parties to the assessment. [938 F-H; 939 A-Bl 
Income-tax Officer, Kozhikode v. Mrs. Susheela Sadananda, 51 l.T.R. 
168, K. K. Kochuni v. State of Madras, [19601 3 S.C.R. 887 and M. K. B. 
Menon v. Asst~. Controller of Estate Duty, C.A. No. 1137/1969 dt. 
5-10-1971, referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1397 of 
1969. 
Appeal from the judgment and order dated January 1, 1968 
of the Kerala High Court in 0. P. No. 2413 of 1965. 
V. A. Sey id Muhammad and A. G. Pudissery, for 'the appellant. 
alias 
A. R. Somanatha Iyer and P. Kesava Pillai, for the responde1H. 
The Judgment of the Court was delivered by 
Hegde J. One K. C. Sreemanavikraman alias Eattan Raja 
was

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