Penalty rate under Wealth-tax law applies on the date of default, not a later amended rate, for completed defaults.

Penalty under section 18(1)(a) of the Wealth-tax Act was governed by the law in force on the date of default, not by a later amendment enhancing the rate. The provision was treated as analogous to the corresponding Gift-tax Act provision, so the amended rate could not be applied to defaults already completed before its commencement. The pending special leave petition against the supporting High Court ruling did not suspend its operation while it continued to hold the field. The penalty was therefore required to be recomputed at the rate applicable on the date of default, and the assessee succeeded on that issue.

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Issues: Whether penalty under section 18(1)(a) of the Wealth-tax Act was to be recomputed with reference to the rate in force on the date of default or the later amended rate.

Analysis: The penalty provision was held to be governed by the law in force on the date when the default was committed. The provision under the Wealth-tax Act was treated as analogous to the corresponding provision considered under the Gift-tax Act, and the amendment enhancing the rate, which came into force later, was held inapplicable to defaults already completed before that date. The mere pendency of a special leave petition against the supporting High Court decision did not displace its operation while it continued to hold the field.

Conclusion: The penalty had to be recomputed with reference to the rate applicable on the date of default, and the assessee succeeded on this issue.

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