Prospective application of building regulations excluded retrospective wealth-tax valuation under Schedule III for existing property.

Valuation of immovable property under the Wealth-tax Act is governed by section 7 and Schedule III, and Rule 6's specified-area formula applies only where a law in force requires a larger minimum open space. The Jaipur Development Authority (Jaipur Region Building) Regulations, 1996 were framed to regulate future construction and development, came into force on publication, and did not require existing completed structures to be retrospectively aligned with them. Because these Regulations were substantive regulatory norms with penal consequences, they could not be imported through Rule 6's proviso to revalue an already existing property. The Regulations were therefore treated as prospective and inapplicable for valuation purposes.

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Issues: Whether the Jaipur Development Authority (Jaipur Region Building) Regulations, 1996 could be applied retrospectively for valuing the assessee's existing property under Rule 6 of Schedule III to the Wealth-tax Act, 1957, and thereby alter the specified area and valuation methodology for the relevant assessment years.

Analysis: The valuation of immovable property under the Wealth-tax Act is governed by section 7 and, for the relevant years, by Schedule III. Rule 6 of Schedule III contains the specified-area formula, while its proviso applies only where some law for the time being in force requires a larger minimum open space. The Regulations of 1996 were framed under the Jaipur Development Authority Act, 1982 to regulate future construction and development in Jaipur Region. They came into force from the date of publication and contained no indication that existing constructions already raised in an old and completed form had to be brought into conformity with those regulations. A rule prescribing a method of valuation may be procedural and capable of application to pending matters, but these Regulations were not merely procedural or evidentiary; they were substantive regulatory provisions governing building activity and carrying penal consequences. The proviso to Rule 6 could not be invoked to import a later set of construction regulations into the valuation of an already existing property which had not been developed under those regulatory constraints.

Conclusion: The Regulations of 1996 were held to be prospective and inapplicable to the disputed property for valuation purposes. The Tribunal's reliance on those Regulations was rejected, and the valuation had to be made only under Schedule III to the Wealth-tax Act, 1957. The issue was decided in favour of Revenue and against the assessee.

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