Continuing default in wealth-tax return filing did not let a later amendment revive penalty beyond the pre-amendment maximum.

Late filing of wealth-tax returns was treated as a continuing default, but penalty liability was governed by the law in force when the default was committed. Under the pre-amendment regime, the penalty accrued at 2% per month and was capped at 50% of tax, so the penal consequences were exhausted after 25 months. Because that maximum had already been reached before the amendment effective from 1 April 1969, the later change could not revive or enlarge liability beyond the penalty already attracted under the earlier law. The reduced penalties were therefore sustained.

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Issues: Whether penalty for delayed filing of wealth-tax returns had to be computed under the law in force on the first day of the relevant assessment year or under the law prevailing during the continuance of the default, and whether the amendment effective from 1 April 1969 could revive liability beyond the maximum penalty already exhausted under the earlier law.

Analysis: Failure to file the return within the prescribed time constituted a continuing default, but for the purpose of penalty the relevant law was the law in force when the default was committed. Under the pre-amendment regime, the penalty was linked to tax and could operate only up to a maximum of 50 per cent, computed at 2 per cent for each month of default, which meant that the penal consequences were exhausted after 25 months. Since that period had expired before the amendment took effect, the later amendment could not revive offences that had already exhausted their penal consequences.

Conclusion: The amended provision did not apply so as to enhance the penalty beyond the maximum already attracted under the earlier law, and the penalties as reduced were upheld.

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