1983 (6) TMI 24 - HC - Wealth-tax

Issues Involved:
1. Applicability of Section 5 of the Limitation Act, 1963 in proceedings under Section 27(3) of the Wealth-tax Act, 1957.
2. Whether the Wealth-tax Act is a special law.
3. Whether Section 27(3) of the Wealth-tax Act prescribes a period of limitation different from the Limitation Act.
4. Applicability of Sections 4 to 24 of the Limitation Act to proceedings under Section 27(3) of the Wealth-tax Act.
5. Whether the delay in filing applications under Section 27(3) of the Wealth-tax Act can be condoned.

Issue-wise Detailed Analysis:

1. Applicability of Section 5 of the Limitation Act, 1963 in proceedings under Section 27(3) of the Wealth-tax Act, 1957:

The court examined whether it has jurisdiction to extend the period of limitation prescribed by Section 27(3) of the Wealth-tax Act ("the Act") using Section 5 of the Limitation Act. Section 5 allows the court to entertain applications beyond the prescribed period if sufficient cause is shown. The court noted that Section 3 of the Limitation Act mandates dismissal of applications filed beyond the prescribed period unless Sections 4 to 24 apply. The court concluded that an application under Section 27(3) of the Act is an application contemplated under the Limitation Act, 1963.

2. Whether the Wealth-tax Act is a special law:

The court acknowledged that the Wealth-tax Act is a special law. It noted that the Act deals with direct taxes, assessments, appeals, and other specific legal obligations, distinguishing it from general laws. The court referenced Salmond on Jurisprudence to emphasize that special laws apply to particular subjects or classes of subjects, confirming that the Wealth-tax Act qualifies as a special law.

3. Whether Section 27(3) of the Wealth-tax Act prescribes a period of limitation different from the Limitation Act:

The court determined that Section 27(3) of the Wealth-tax Act prescribes a period of limitation different from the Limitation Act. It referenced previous judgments, including State of Assam v. Naresh Chandra Das and Canara Bank Ltd. v. Warden Insurance Co. Ltd., to support the view that a special law prescribing a period of limitation not covered by the Limitation Act constitutes a "different" period. The court concluded that Section 27(3) prescribes a different period of limitation, making Section 3 of the Limitation Act applicable to proceedings under Section 27(3) of the Wealth-tax Act.

4. Applicability of Sections 4 to 24 of the Limitation Act to proceedings under Section 27(3) of the Wealth-tax Act:

The court found that Sections 4 to 24 of the Limitation Act apply to proceedings under Section 27(3) of the Wealth-tax Act. It noted that Section 27 of the Act does not expressly exclude these sections. The court explained that the deletion of Section 27(9) of the Wealth-tax Act, which previously applied Section 5 of the Limitation Act, was due to the redundancy created by the Limitation Act, 1963. The court concluded that the legislative intent was to apply Sections 4 to 24 of the Limitation Act to proceedings under Section 27(3) of the Wealth-tax Act.

5. Whether the delay in filing applications under Section 27(3) of the Wealth-tax Act can be condoned:

The court examined the merits of the applications to determine if the delay could be condoned. The assessees filed applications beyond the prescribed period of 90 days, claiming they acted on erroneous legal advice from their counsel, who confused the period of limitation under the Wealth-tax Act with that under the Income-tax Act. The court found that even considering the counsel's mistake, the applications were filed beyond the extended period of six months from the date of service of the notice of refusal. The court concluded that there was no sufficient cause to condone the delay from January 29, 1979, to March 2, 1979, and dismissed the applications.

Conclusion:
The court held that the provisions of Section 3 and Sections 4 to 24 of the Limitation Act are applicable to proceedings under Section 27(3) of the Wealth-tax Act, and the High Court has the jurisdiction to extend the period of limitation under Section 27(3) of the Wealth-tax Act, provided the applicant shows sufficient cause. However, in this case, the delay was not satisfactorily explained, and the applications were dismissed.

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