Delegated rule-making exceeded statutory power where retrospective wealth-tax liability and valuation machinery were added beyond the enabling provision.

Rule 5(2) of the Wealth-tax (Exemption of Heirloom Jewellery of Rulers) Rules, 1958 exceeded the enabling power under section 5(1)(xiv) of the Wealth-tax Act, 1957 because, although the rule-making power could include conditions for recognition and withdrawal of heirloom status, it could not authorise retrospective wealth-tax liability or a valuation method inconsistent with section 7. The rule therefore went beyond delegated authority, and the consequential withdrawal order and demand notices founded on it were invalid and liable to be quashed.

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Issues: Whether rule 5(2) of the Wealth-tax (Exemption of Heirloom Jewellery of Rulers) Rules, 1958, and the consequential order withdrawing recognition retrospectively and raising wealth-tax demands were ultra vires the Wealth-tax Act, 1957.

Analysis: Section 5(1)(xiv) of the Wealth-tax Act, 1957, empowered the Central Government to frame rules subject to which the Board could recognise a Ruler's jewellery as heirloom. That delegated power extended to prescribing conditions for recognition and, by necessary implication, conditions for withdrawal of recognition. However, rule 5(2) did not stop at withdrawal of recognition. It further created a scheme for imposing wealth-tax for past assessment years and for determining the value of the jewellery in a manner inconsistent with section 7 of the Act, which requires valuation on the basis of market price on the valuation date. The Central Government had no authority under section 5(1)(xiv) to prescribe such liability and valuation machinery, and the rule therefore travelled beyond the scope of the enabling provision.

Conclusion: Rule 5(2) was held ultra vires, and the withdrawal order and demand notices founded on it were invalid and liable to be quashed.

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