Continuing default penalty must be split between pre-amendment and post-amendment periods under the applicable law

Where a penalty for delayed filing continues across a statutory amendment, the penalty must be computed separately for the pre-amendment and post-amendment periods under the law applicable to each period. The court rejected the view that liability was confined to the maximum penalty in force on the original due date of the return, and upheld the Revenue's computation basis. For delay before 1 April 1969, the unamended section 18 of the Wealth-tax Act, 1957 applied; for delay after that date, the amended provision introduced by the Finance Act, 1969 governed the computation.

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Issues: Whether, for penalty under section 18(1)(a) of the Wealth-tax Act, 1957, the relevant date is the date on which the return was actually due, and whether the penalty for delay must be computed only with reference to the law in force on that date.

Analysis: The reference arose from a default in filing the wealth-tax return within time. The question was whether the Tribunal was right in restricting the penalty to the maximum period applicable on the original due date. Following the earlier binding view, the penalty for delay prior to 1 April 1969 had to be calculated under the unamended section 18 of the Wealth-tax Act, 1957, while the delay after 1 April 1969 had to be computed under the amended provision as introduced by the Finance Act, 1969. The relevant penalty is thus not confined to the law as it stood only on the date the return became due.

Conclusion: The question was answered in the negative and against the assessee. The Tribunal's view was rejected and the Revenue's computation basis was upheld.

Final Conclusion: Penalty for delayed filing under the Wealth-tax Act, 1957 must be split according to the periods before and after the statutory amendment, rather than being confined to the pre-amendment maximum applicable on the original due date.

Ratio Decidendi: Where a statutory provision governing penalty is amended during the period of continuing default, the penalty must be computed separately for the pre-amendment and post-amendment periods in accordance with the law applicable to each period.

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