1985 (6) TMI 64 - AT - Wealth-tax

Summary

Issues:
1. Whether the Tribunal was justified in directing the WTO to revalue the property at 15-B, Friends Colony, in accordance with rule 1BB of the Wealth-tax (Amendment) Rules with retrospective operation?
2. Whether the question sought by the revenue in the reference application merits referral to the High Court?

Analysis:

Issue 1:
The Tribunal was faced with the question of whether it was justified in directing the WTO to revalue the property at 15-B, Friends Colony, with retrospective operation in accordance with rule 1BB of the Wealth-tax (Amendment) Rules. The Tribunal, in its order dated 1-9-1983, followed the decision of the Special Bench in the case of Biju Patnaik v. WTO. However, the Tribunal declined to draw up a statement of the case, stating that the answer to the question was self-evident. The Accountant Member, in disagreement with the Judicial Member, referred to the divergence of opinions among different Benches in Delhi on the retrospective operation of rule 1BB. Eventually, the matter was referred to a Special Bench to determine if a referable question of law arose regarding the retrospective operation of rule 1BB. The Third Member, after considering the arguments, concluded that a question of law did arise out of the Tribunal's order, as the Special Bench had already decided that the operation of rule 1BB was a question of law involving the interpretation of the rules.

Issue 2:
The second issue revolved around whether the question sought by the revenue in the reference application merited referral to the High Court. The Judicial Member initially opined that no referable question of law arose from the Tribunal's order, citing a previous case as precedent. However, the Accountant Member disagreed, pointing out that in a similar case, a question of law was referred to the High Court following the Special Bench decision in Biju Patnaik's case. The Third Member concurred with the Accountant Member, emphasizing that the question of law regarding the retrospective operation of rule 1BB was significant and required consideration by the regular Bench for disposal of the reference application in line with the majority view.

In conclusion, the judgment addressed the contentious issue of retrospective operation of rule 1BB of the Wealth-tax Rules, highlighting the divergent opinions among different Benches and ultimately affirming that the question of law did merit referral to the High Court for consideration.