1985 (11) TMI 9 - HC - Wealth-tax

Summary

Issues Involved:
1. Applicability of Rule 1BB of the Wealth-tax Rules, 1957, retrospectively.
2. Nature of Rule 1BB - whether substantive or procedural.
3. Impact of Rule 1BB on pending assessments and appeals.

Summary:

1. Applicability of Rule 1BB Retrospectively:
The Tribunal referred the question of whether Rule 1BB, inserted by the Wealth-tax (Amendment) Rules, 1979, effective from April 1, 1979, applies to the assessee for the assessment years in question. The Revenue contended that Rule 1BB is substantive and must operate prospectively, while the assessee argued it is procedural and should apply retrospectively. The court concluded that Rule 1BB is procedural and thus applies retrospectively.

2. Nature of Rule 1BB - Substantive or Procedural:
The court examined whether Rule 1BB is substantive or procedural. It noted that section 7(1) of the Wealth-tax Act, 1957, is a machinery provision for estimating the market value of assets, and Rule 1BB provides a formula for valuing residential properties. The court observed that Rule 1BB facilitates the determination of market value and is intended to streamline the valuation process. Since Rule 1BB lays down a method for valuation and does not impair any vested rights or create new obligations, it is procedural in nature.

3. Impact on Pending Assessments and Appeals:
The court addressed the applicability of Rule 1BB to pending assessments and appeals. It held that procedural laws are generally retrospective and affect pending cases. The court explained that the process of assessment continues until the final decision in appeal, and the appellate authority can modify the original assessment order to make it consistent with Rule 1BB. Therefore, Rule 1BB applies to cases pending before the Wealth-tax Officer and appellate authorities.

Conclusion:
The court answered the question in the affirmative, holding that Rule 1BB applies retrospectively to the assessee for the assessment years in question. The reference was disposed of with no order as to costs.