1982 (8) TMI 48 - HC - Wealth-tax

Summary

Issues: Interpretation of the term "jewellery" under section 5(1)(viii) of the Wealth-tax Act for assessment years prior to April 1, 1972.

The judgment by the High Court of Madhya Pradesh dealt with the interpretation of the term "jewellery" under section 5(1)(viii) of the Wealth-tax Act for assessment years before April 1, 1972. The court was tasked with determining whether gold ornaments not studded with precious or semi-precious stones would be considered as jewellery under the Act. The court analyzed the legislative history and amendments made to the Act to provide exemptions for certain assets, including jewellery. The court referred to previous decisions by other High Courts that had conflicting views on the definition of jewellery, particularly regarding the inclusion of gold ornaments without precious stones. The court highlighted the addition of an Explanation to the Act in 1972, which expanded the definition of jewellery to include various items made of precious metals or stones. However, the court noted that this Explanation could not be applied retroactively to assessments before 1972.

The court delved into the ordinary meaning of the term "jewellery" as understood in common parlance, citing dictionary definitions to support its interpretation. The court emphasized that the general sense of the word "jewellery" in modern usage typically referred to items containing precious or semi-precious stones, rather than all types of ornaments. The court rejected the notion that the inclusive definition provided in the Explanation should apply to assessments before 1972, as it was intended to broaden the scope of jewellery only from that date onwards. The court distinguished a previous Supreme Court decision that was not directly relevant to the specific issue at hand. Ultimately, the court aligned with the views of the Orissa and Calcutta High Courts, concluding that for assessment years preceding April 1, 1972, jewellery did not encompass gold ornaments lacking precious or semi-precious stones under section 5(1)(viii) of the Wealth-tax Act.

In conclusion, the High Court of Madhya Pradesh answered the reference question by stating that, for assessment years prior to April 1, 1972, gold ornaments not studded with precious or semi-precious stones would not fall under the definition of jewellery as per section 5(1)(viii) of the Wealth-tax Act. The case was remitted to the Division Bench for final disposal, with no order as to costs.