1984 (5) TMI 27 - HC - Wealth-tax

Summary

Issues:
- Reduction of penalty by the Tribunal for assessment years 1965-66, 1966-67, 1967-68, and 1968-69.
- Justification of penalty reduction by the Tribunal.
- Applicability of retrospective effect of the amendment in s. 18(1)(a) of the Wealth Tax Act.

Analysis:

The High Court of Patna dealt with a batch of cases referred under s. 27(1) of the Wealth Tax Act, 1957, regarding the reduction of penalties imposed by the Wealth Tax Officer for assessment years 1965-66 to 1968-69. The penalties were reduced by the Tribunal from amounts imposed by the WTO. The primary issue was whether the Tribunal's decision to reduce the penalties was justified based on the circumstances of each case. The Tribunal upheld the penalties of Rs. 82, Rs. 95, Rs. 113, and Rs. 110 for the respective assessment years, citing that the law before the 1969 amendment applied to these years. The Tribunal reasoned that the amendment in 1969 could not have retrospective effect, affecting the substantive rights of the assessee. The High Court examined whether the Tribunal's view on the retrospective effect of the amendment was correct.

The assessee argued that the Department failed to prove deliberate default and contended that she was unaware of her wealth tax liability until the filing date. However, the Tribunal found these arguments untenable, upholding the penalties imposed by the WTO but reducing the amounts. The High Court concurred with the Tribunal's decision, citing the Supreme Court's ruling in CWT v. Suresh Seth, which established that amendments affecting substantive rights do not have retrospective application unless expressly stated. The Court held that the amendment in 1969 did not apply to assessment years before 1969-70, affirming the Tribunal's application of penalty computation based on the law in force at the time of filing. Consequently, the questions posed were answered in favor of the assessee and against the Revenue.

In conclusion, the High Court supported the Tribunal's decision to reduce the penalties for the assessment years in question based on the non-retrospective nature of the amendment in s. 18(1)(a) of the Wealth Tax Act. The judgment emphasized the principle that statutory provisions affecting substantive rights do not have retrospective effect unless explicitly stated, as established by the Supreme Court precedent. The Court appreciated the Revenue's fair stance and made no order as to costs.