Quasi-judicial discretion in wealth-tax demands requires hearing and reasons before refusing stay or defaulter relief.

A Wealth-tax Officer exercising discretion under section 31(6) of the Wealth-tax Act must act judicially, on a fair and reasonable basis, rather than arbitrarily. The power was treated as analogous to section 220(6) of the Income-tax Act, so the assessee had to be heard before refusal of stay of demand or denial of non-treatment as a defaulter, and reasons had to be recorded for rejection. An order passed without hearing or reasons was held invalid, and the impugned orders were quashed with a direction to reconsider the application in accordance with law.

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Issues: Whether the Wealth-tax Officer, while deciding an application under section 31(6) of the Wealth-tax Act, 1957, was required to act judicially by hearing the assessee and recording reasons before refusing stay of demand and non-treatment as a defaulter.

Analysis: The discretion conferred by section 31(6) was treated as analogous to the power under section 220(6) of the Income-tax Act, 1961, and therefore as a quasi-judicial function. Such power had to be exercised fairly, reasonably, and not arbitrarily. The Court held that the assessee should be heard before the application is rejected and that reasons must be given for the refusal, because the absence of hearing and reasons renders the exercise of discretion invalid.

Conclusion: The impugned orders could not stand and were quashed; the Wealth-tax Officer was directed to reconsider the application judicially after following the required procedure.

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