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TMI Blog1994 (9) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ivided family and company. The expression "net wealth" is defined in section 2(m) of the Act. Section 2(q) defines "valuation date". Section 4 enumerates the assets to be included in computing "net wealth". Sections 5 and 6 exempt certain assets in India and outside from being included in computing the net wealth. Section 7-and this provision is of particular relevance here-speaks of how the value of the assets has to be determined. Section 7(1), as it stood during the relevant period, i.e., prior to April 1, 1989, when it stood substituted by the Direct Tax Laws (Amendment) Act, 1989, with effect from April 1, 1989, provided: " 7. (1) Subject to any rules made in this behalf the value of any asset other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth-tax Officer it would fetch if sold in the open market on the valuation date." The Central Board of Revenue in pursuance of the rule-making power conferred by section 46 of the Act promulgated rules known as the Wealth-tax Rules, 1957. These were amended from time to time and rule 1BB-with which we are now concerned-came to be inserted by the Wealth-tax (Amendment) Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made on February 8, 1983, by which time rule 1BB had been introduced into the Rules. The assessee, a Hindu undivided family, contends that its immovable properties be valued by applying the the said rule 1BB even though the assessments in question pertain to the orders prior to April 1, 1979, on which date the said rule came into force. The Wealth-tax Officer rejected this claim and proceeded to value the immovable properties independently of this said rule 1BB. The appeals preferred by the assessee before the Commissioner of Wealth-tax (Appeals) were allowed and the appellate authority held in favour of the applicability of rule 1BB. The appeals of the Revenue before the Income-tax Appellate Tribunal, Ahmedabad, were unsuccessful. The Tribunal upheld the order of the Commissioner of Wealth-tax (Appeals). The Revenue sought a reference under section 27(1) of the Wealth-tax Act in respect of both the assessment years. The Tribunal referred the following question of law for the opinion of the High Court: "Whether, in law and on facts, the Appellate Tribunal is right in directing the Wealth-tax Officer to compute the value of Shahibagh Bungalow under rule 1BB of the Wealth-tax Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in CWT v. O. P. Tandon [1992] 195 ITR 688; the Calcutta High Court in Smt. Manjushree Biswas v. CWT [1988] 171 ITR 348 and Dilip Kumar Mitra v. CWT [1993] 200 ITR 336. The basis of distinction between statutes affecting rights and those affecting merely procedure is well-recognised. Dixon C. J. in Maxwell v. Murphy [1957] 96 CLR 261 at 267 drawing upon the following words of Lord Justice Mellish in Republic of Costa Rica v. Erlanger [1876] 3 Ch. D. 62 (CA) at 69, said: "No suitor has any vested interest in the course of procedure, nor any right to complain, if during the litigation the procedure is changed, provided, of course, that no injustice is done." It is true that if one traces any substantive right back far enough it will be found secreted in the interstices of procedure. In W. H. Cockerline and Co. v. IRC [1930] 16 TC 1 (CA) at 19, Lord Hanworth quoted with approval the following passage from the judgment of Sargant L. J.: "The liability is imposed by the charging section, namely, section 38, the words of which are clear. The subsequent provisions as to assessment and so on are machinery only. They enable the liability to be quantified, and when quantified to be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edy and the right, while the law of procedure defines the modes and conditions of the application of the one to the other." In Izhar Ahmad Khan v. Union of India, AIR 1962 SC 1052 ; [1962] Suppl. 3 SCR 235 at 251, it is observed (at page 1059 of AIR 1962 SC): "The division of law into two broad categories of substantive law and procedural law is well-known. Broadly stated, whereas substantive law defines and provides for rights, duties and liabilities, it is the function of the procedural law to deal with the application of substantive law to particular cases and it goes without saying that the law of evidence is a part of the law of procedure." In Kesoram Industries and Cotton Mills Ltd. v. CWT [1966] 59 ITR 767 (SC) at 793, Justice Shah observed: " Section 7(2) merely provides machinery in certain special cases for valuation of assets, and it is from the aggregate valuation of assets that the net wealth chargeable to tax may be ascertained.... This is an artificial rule adopted with a view to avoid investigation of a mass of evidence which it would be difficult to secure or, if secured, may require prolonged investigation." Though this was part of the minority opinion, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely with matters of procedure may properly, unless that construction be textually inadmissible, have retrospective effect attributed to them, provisions which touch a right in existence at the passing of the statute are not to be applied retrospectively in the absence of express enactment or necessary intendment' (See Delhi Cloth and General Mills Co. Ltd. v. ITC, AIR 1927 PC 242). The second is that a right of appeal being a substantive right the institution of a suit carries with it the implication that all successive appeals available under the law then in force would be preserved to the parties to the suit throughout the rest of the career of the suit. There are two exceptions to the application of this rule, viz., (i) when by competent enactment such right of appeal is taken away expressly or impliedly with retrospective effect; and (ii) when the court to which appeal lay at the commencement of the suit stands abolished (See Garikapati Veeraya v. N. Subbiah Choudhry [1957] SCR 488; AIR 1957 SC 540, and Colonial Sugar Refining Co. Ltd. v. Irving [1905] AC 369 (PC))." Halsbury's Laws of England (Fourth edition, Vol. 44, paragraph 925) states: " The presumption against retrosp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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