Binding precedent governs penalty computation under the Wealth Tax Act unless strong reasons justify departure.

Binding precedent on the computation of penalty under the Wealth Tax Act required application of the later ruling in Maya Rani Punj to penalty proceedings for the relevant assessment years. The Supreme Court declined to reconsider that precedent, holding that no compelling reason had been shown to depart from it. On that basis, the unamended view accepted by the High Court could not stand, and the enhanced amended scale of penalty governed the matter. The governing principle is that a coordinate court must follow an existing binding interpretation of a penalty provision unless strong grounds justify reconsideration.

---

---

Issues: Whether penalty under Section 18(1)(a) of the Wealth Tax Act, 1957 for the relevant assessment years was to be computed under the unamended provision or under the amended enhanced scale of penalty.

Analysis: The Court followed the ruling in Maya Rani Punj and declined to reconsider it. It held that there were no compelling reasons to depart from that binding precedent, and that the later decision governed the present reference. The earlier High Court view favouring the assessee was therefore unsustainable.

Conclusion: The question was answered in the negative, in favour of the Revenue and against the assessee, and the appeals were allowed.

Final Conclusion: The governing principle applied was that an existing binding precedent on the computation of penalty under the relevant fiscal provision must be followed absent strong grounds for reconsideration.

Ratio Decidendi: A coordinate court must apply a binding precedent on the interpretation and operation of a penalty provision unless compelling reasons justify departure or reconsideration.

---