1996 (12) TMI 419 - SC - Wealth-tax

Supreme Court overturns High Court decision in favor of Revenue

The Supreme Court allowed the appeals, overturning the High Court's decision in favor of the assessee and ruling in favor of the Revenue. The Court relied ... Penalty under Section 18(1)(a) of the Wealth Tax Act - application of amended penalty provisions to defaults spanning the amendment date - binding effect of a three-Judge Bench decision - overruling of earlier precedent and its effect on subsequent casesPenalty under Section 18(1)(a) of the Wealth Tax Act - binding effect of a three-Judge Bench decision - overruling of earlier precedent and its effect on subsequent cases - Whether the penalty for assessment years 1962-63, 1963-64 and 1964-65 was to be levied as per the provision of Section 18(1)(a) as it stood before the amendment with effect from 1.4.1965. - HELD THAT: - The Court held that the decision in Maya Rani Punj, rendered by a three-Judge Bench and having overruled the earlier decision in Suresh Seth, governs the present controversy. Although Maya Rani Punj concerned the Income Tax Act, the relevant provisions in the Wealth Tax Act are similar and the principle applies. The Bench concluded there were no sufficient grounds to reconsider or depart from the law laid down in Maya Rani Punj and accordingly declined the respondent's submission that Suresh Seth's ratio should be retained. [Paras 3, 4]Question answered in the negative; appeals allowed in favour of the Revenue and against the assessee, and the High Court's order set aside.Penalty under Section 18(1)(a) of the Wealth Tax Act - application of amended penalty provisions to defaults spanning the amendment date - Whether penalties for assessment years 1965-66 to 1968-69 were to be calculated in accordance with the law as it stood before amendment on 1.4.1969 even where the period of default extended beyond 31.3.1969. - HELD THAT: - These appeals were heard with Civil Appeal Nos. 2952-54 of 1979 and no separate arguments were addressed. Applying the same principle as in the earlier allowed appeals, the Court answered the referred question against the assessee and in favour of the Revenue, holding that the increased scale introduced with effect from 1.4.1969 governed the matter as held in the controlling decision. [Paras 5]Appeals allowed; the question referred to the High Court answered in favour of the Revenue and against the assessee.Final Conclusion: Both sets of appeals are allowed; the High Court's references are answered against the assessee and in favour of the Revenue, the Court applying the binding precedent of Maya Rani Punj and refusing to revisit that three-Judge Bench decision; no order as to costs. The Supreme Court allowed the appeals, setting aside the High Court's order in favor of the assessee and ruling in favor of the Revenue. The Court followed the decision in Maya Rani Punj overruling the earlier decision in Suresh Seth, answering the questions against the assessee. No costs were awarded.