1991 (12) TMI 52 - HC - Wealth-tax

Summary

Issues Involved:
1. Applicability of Rule 1BB of the Wealth-tax Rules for the assessment year 1978-79.
2. Nature of Rule 1BB - whether procedural or substantive.
3. Retrospective application of procedural rules.

Summary:

1. Applicability of Rule 1BB for Assessment Year 1978-79:
The core issue was whether Rule 1BB, enacted from April 1, 1979, could be applied for the valuation of properties for the assessment year 1978-79. The Tribunal held that Rule 1BB, being procedural, applied to assessments pending at the time of its enactment. The Revenue contended that Rule 1BB should apply only prospectively from the assessment year 1979-80.

2. Nature of Rule 1BB - Procedural or Substantive:
The court analyzed Section 3 (charging section) and Section 7 (valuation procedure) of the Wealth-tax Act, 1957. It was noted that Section 7 is a machinery provision aiding the charging section and is subject to any rules made in this behalf. Rule 1BB, framed u/s 46 of the Act, provides a method for determining the market value of residential properties and is procedural in nature. The court referred to multiple precedents, including the Supreme Court's observations in Standard Mills Co. Ltd. v. CWT and CWT v. Maharaja Kumar Kamal Singh, affirming that Section 7 and Rule 1BB are procedural.

3. Retrospective Application of Procedural Rules:
The court held that procedural laws, including Rule 1BB, are retrospective unless expressly stated otherwise. This principle was supported by various judgments, including CWT v. Shri Kasturbhai Mayabhai and CWT v. Laxmipat Singhania, which established that procedural rules apply to pending assessments. The court emphasized that Rule 1BB was intended to streamline valuation procedures and reduce litigation, thus applying retrospectively to all pending assessments as of its enactment date.

The court concluded that Rule 1BB is procedural and has retrospective application, thus applying to the assessment year 1978-79. The Tribunal did not err in applying Rule 1BB for the valuation of properties for the assessment year 1978-79. The reference was answered accordingly, with no orders as to costs.