TaxTMI 
TaxTMI 
1981 (4) TMI 4
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....s filed his wealth-tax returns for the assessment years 1964-65 and 1965-66 on March 18, 1971, while he was required by s. 14(1) of the Act to file the return for the assessment year 1964-65 on or before June 30, 1964, and the return for the assessment-year 1965-66 on or before June 30, 1965. The WTO completed the assessments for the aforementioned years on March 22, 1971, determining the total wealth at Rs. 1,45,800 for the assessment year 1964-65 as against the declared wealth of Rs. 1,38,550 and at Rs. 1,65,200 for the assessment year 1965-66 as against the declared wealth of Rs. 1, 59,127 and also commenced proceedings for levying penalty under s. 18(1)(a) of the Act for late submission of returns. Ultimately, the penalties were levied as follows : " Assessment year 1964-65 (i) For the period from 1-7-64 to 31-3-69 : Penalty at 2% p.m. subject to a maximum of 50% of the wealth-tax payable under section 18(1)(a) before its amendment on 1-4-69 by the Finance Act, 1969 Rs. 115 (ii) For the period from 1-4-69 to 18-3-71: Penalty at 1/2% of the net wealth for each month of default under section 18(1)(a) as amended by the Finance Act, 1969 5,267 5,382 Ass....
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....this section. " After April 1, 1965: " 14. (1) Every person, if his net wealth or the net wealth of any other person in respect of which he is assessable under this Act on the valuation date was of such an amount as to render him liable to wealthtax under this Act, shall, before the thirtieth day of June of the corresponding assessment year, furnish to the Wealth-tax Officer a return in the prescribed form and verified in the prescribed manner setting forth the net wealth as on that valuation date ...... (3) The Wealth-tax Officer may, if he is satisfied that it is necessary so to do, extend the date for the delivery of the return under this section. " Section 15 of the Act which has not undergone any change since the commencement of the Act reads: " 15. Return after due date and amendment of return. -If any person has not furnished a return within the time allowed under section 14, or having furnished a return under that section discovers any omission or wrong statement therein, he may furnish a return or a revised return, as the case may be, at any time before the assessment is made. " The relevant parts of section 18 of the Act as they stood during the three periods referr....
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....or by such notice, as the case may be; or ...... he or it may, by order in writing, direct that such person shall pay by way of penalty (i) in the cases referred to in clause (a), in addition to the amount of wealth-tax, if any, payable by him, a sum, for every month during which the default continued, equal to one-half per cent. of (A) the net wealth assessed under section 16, as reduced by the amount of net wealth on which, in accordance with the rates of wealthtax specified in Paragraph A of Part I of the Schedule or Part II of the Schedule, the wealth-tax chargeable is nil, or (B) the net wealth assessed under, section 17, where assessment has been made under that section, as reduced by (1) the net wealth, if any, assessed previously under section 16 or section 17, or (2) the amount of net wealth on which, in accordance with the rates of wealth-tax specified in Paragraph A of Part I of the Schedule or Part II of the Schedule, the wealth-tax chargeable is nil, whichever is greater, but not exceeding, in the aggregate, an amount equal to the net wealth assessed under section 16, or, as the case may be, the net wealth assessed under section 17, as reduced in either case in th....
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....the Tribunal, as the case may be, could impose any amount as penalty having regard to all the relevant circumstances of the case including perhaps the time that had elapsed from the last day allowed to file the return. Between April 1, 1965, and March 31, 1969, the measure of penalty was regulated by s. 18 of the Act as amended in 1964. During that period the penalty imposable was a sum equivalent to 2 per cent. of the tax for every month during which the default continued but not exceeding in the aggregate fifty per cent. of the tax. The penalty leviable during this period was less onerous than it was before April 1, 1965. Then came the amendment made by the Finance Act of 1969. After April 1, 1969, by reason of the amendment introduced by the Finance Act of 1969, the penalty imposable was altered to a sum for every month during which the default continued equal to one-half per cent. of the net wealth calculated in accordance with the amended provisions in s. 18. The penalty leviable during this period was more drastic than what it was before. One significant difference between the law as it existed prior to April 1, 1965, and the law as it existed during the subsequent two period....
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....he default committed by the assessee in not filing the return due on June 30, 1965, for the assessment year 1965-66, is liable to be interfered with. To repeat, the relevant part of s. 18 of the Act can be divided into two parts, the first part contained in cl. (a) of s. 18(1) setting out the gist of the default and the second part prescribing the measure of penalty. The former part has more or less remained the same from the commencement of the Act and it is only the latter part which has undergone changes. The question is whether by reason of the changes in the latter part, there has been a change in the nature of the wrong referred to in s. 18(1)(a) of the Act. A liability in law ordinarily arises out of an act of commission or an act of omission. When a person does an act which law prohibits him from doing it and attaches a penalty for doing it, he is stated to have committed an act of commission which amounts to a wrong in the eye of law. Similarly when a person omits to do an act which is required by law to be performed by him and attaches a penalty for such omission, he is said to have committed an act of omission which is also a wrong in the eye of law. Ordinarily, a wron....
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....he case for purposes of determining the quantum of penalty but the default, however, is only one which takes place on the expiry of the last day for filing the return without penalty and not a continuing one. The default in question does not, however, give rise to a fresh cause of action every day. Explaining the expression 'a continuing cause of action' Lord Lindley in Hole v. Chard Union [1894] 1 Ch 293, 295, 296 (CA), observed : " What is a continuing cause of action ? Speaking accurately, there is no such thing; but what is called a continuing cause of action is a cause of action which arises from the repetition of acts or omissions of the same kind as that for which the action was brought. " In the same decision, Lord justice A. L. Smith, who concurred with the above view, said (p. 296) : " If once a cause of action arises, and the acts complained of are continuously repeated, the cause of action continues and goes on de die in diem. It seems to me that there was a connection in the present case between the series of acts before and after the action was brought ; they were repeated in succession, and became a continuing cause of action. They were an assertion of the same cl....
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.... factory without a licence issued thereunder was a continuing offence. Section 39 of the Indian Mines Act, 1923, which came up for consideration before the Patna High Court in State v. Kunja Behari Chandra, AIR 1954 Pat 371, on which reliance was placed by the revenue is a case of continuing offence Section 39 provided: "39. Whoever contravenes any provision of this Act or of any regulation, rule or bye-law or of any order made thereunder for the contravention of which no penalty is hereinbefore provided shall be punishable with fine which may extend to one thousand rupees, and in the case of a continuing contravention, with a further fine which may extend to one hundred rupees for every day on which the offender is proved to have persisted in the contravention after the date GI the first conviction. " In this case the language of the section itself made it obvious that its violation resulted in a continuing offence. The true principle appears to be that where the wrong complained of is the omission to perform a positive duty requiring a person to do certain act the test to determine whether such a wrong is a continuing one is whether the duty in question is one which requires ....