Mandatory notice period under Wealth-tax law must be respected before prosecution; defective notice and no hearing rendered proceedings unsustainable.

Prosecution under the Wealth-tax Act was treated as unsustainable where the notice under section 17 did not comply with the amended requirement of allowing not less than thirty days to file the return. The notice relied upon by the department was either undated or fixed a much shorter response time, which was inconsistent with the statutory mandate. The reasoning also treated the absence of a proper opportunity of hearing as a breach of natural justice. On that basis, the complaint and consequential proceedings were quashed.

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Issues: Whether the prosecution launched under section 35B of the Wealth-tax Act, 1957 was liable to be quashed for want of compliance with the mandatory notice requirement under section 17 of the Wealth-tax Act, 1957 and for breach of natural justice.

Analysis: The return for the relevant assessment year had been filed after substantial delay and the prosecution was initiated long after the assessment and penalty proceedings had concluded. The amended section 17(1) of the Wealth-tax Act, 1957, as applicable from 1 April 1989, required the notice to grant not less than thirty days for filing the return. The notice relied upon by the department either did not bear a date or, where dated, required a reply within a period far shorter than thirty days. That was inconsistent with the statutory mandate. The reasoning also accepted that launching prosecution without giving a proper opportunity of hearing offended the principles of natural justice.

Conclusion: The prosecution was not sustainable and the complaint, with all consequential proceedings, was quashed.

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