Discretion to waive wealth-tax penalty upheld where differential treatment across years was based on a rational basis.

Section 18(2A) of the Wealth-tax Act empowers the Commissioner to reduce or waive minimum penalty where the assessee has made a full, voluntary and good-faith disclosure. The Commissioner may differentiate between assessment years on a rational basis, and the finality clause in section 18(2B) does not remove the High Court's writ jurisdiction. However, the Court will not substitute its own discretion for that of the statutory authority merely because another view is possible. On the facts, the Commissioner's different treatment of the years based on the length of delay in filing returns was held to be judicious, and no interference under Article 226 was warranted.

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Issues: Whether the Commissioner of Wealth-tax properly exercised discretion under section 18(2A) of the Wealth-tax Act, 1957 in waiving penalty for one assessment year and reducing it for the other two years, and whether interference under Article 226 of the Constitution of India was warranted.

Analysis: Section 18(2A) vested discretion in the Commissioner to reduce or waive minimum penalty where the assessee had made full and voluntary disclosure in good faith. The finality clause in section 18(2B) did not oust the High Court's writ jurisdiction, but the Court would not substitute its own discretion for that of the statutory authority. The Commissioner differentiated between the assessment years on the basis of the relative length of delay in filing the returns, and such differentiation was held to be rational and within the scope of the statutory discretion.

Conclusion: The Commissioner's exercise of discretion was held to be judicious and no ground for interference under Article 226 was made out. The petition was therefore dismissed, against the assessee.

Ratio Decidendi: Where a statute confers discretionary power to waive or reduce penalty and the authority applies a rational basis of differentiation, the High Court will not substitute its own view in writ jurisdiction merely because another outcome was possible.

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