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Commissioner of Wealth-tax Vs. K. Butchaiah - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAndhra Pradesh High Court
Decided On
Case NumberCase Referred No. 49 of 1969
Judge
Reported in[1977]108ITR324(AP)
ActsWealth Tax Act - Sections 14(1), 14(2), 17, 18, 18(1), 18(2), 18(3), 18(4), 18(5), 27(1) and 39; Wealth Tax (Amendment) Act, 1964; ;General Clauses Act - Sections 6; Code of Civil Procedure (CPC) , 1908 - Sections 10; Government of Burma Adaptation of Laws Order, 1937; Income Tax Act, 1961 - Sections 274(1), 275 and 297(2); Income Tax Act, 1922 - Sections 22(4) and 28; Constitution of India - Article 14
AppellantCommissioner of Wealth-tax
RespondentK. Butchaiah
Excerpt:
direct taxation - levy of penalty - sections 14 (1), 14 (2), 17, 18, 18 (1), 18 (2), 18 (3), 18 (4), 18 (5), 27 (1) and 39 of wealth tax act, wealth tax(amendment) act, 1964 and section 6 of general clauses act - whether amended provisions of section 18 of wealth-tax act applicable to proceedings for levy of penalty - penalty levied in accordance with amended section 18 (1) (a) - in an appeal filed contended that on date of filing returns said amendment was not on statute - law applicable on date of completion of assessment proceedings will be applicable for proceedings relating to levy of penalty - law as on date of default is insignificant - assessment proceedings had already been completed when new section 18 had come into force - wealth-tax officer also not required to obtain prior.....vaidya, j. 1. the income-tax appellate tribunal, hyderabad bench, has referred under section 27(1) of the wealth-tax act the following question :'whether, on the facts and in the circumstances of the case, the appellate tribunal was justified in holding that the provisions of section 18(1)(a) of the wealth-tax act, as it stood prior to the amendment effected from april 1, 1965, were applicable '2. the facts leading to the reference are that the assessee, who is the respondent in this reference, had filed voluntary returns of net wealth on 26th november, 1963, for the assessment years 1958-59, 1959-60, 1960-61, 1961-62 and 1962-63. the wealth-tax officer on 28th july, 1965, issued notices under section 18(2) of the wealth-tax act as amended by act no. 46 of 1964, the amending act having.....
Judgment:

Vaidya, J.

1. The Income-tax Appellate Tribunal, Hyderabad Bench, has referred under Section 27(1) of the Wealth-tax Act the following question :

'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the provisions of Section 18(1)(a) of the Wealth-tax Act, as it stood prior to the amendment effected from April 1, 1965, were applicable '

2. The facts leading to the reference are that the assessee, who is the respondent in this reference, had filed voluntary returns of net wealth on 26th November, 1963, for the assessment years 1958-59, 1959-60, 1960-61, 1961-62 and 1962-63. The Wealth-tax Officer on 28th July, 1965, issued notices under Section 18(2) of the Wealth-tax Act as amended by Act No. 46 of 1964, the amending Act having come into force on the 1st day of April, 1965, to show cause why the penalty as provided in that section should not be levied for the delay on the part of the assessee in filing his returns of net wealth. On receipt of the show-cause notice, the assessee furnished an explanation that, on account of his failing health, old age and the fact that he was a villager, the delay had occurred. The explanation was not accepted by the Wealth-tax Officer who thereafter imposed penalties in respect of each of the assessment years mentioned above under the amended Act. The penalty that was levied was in accordance with the provisions of Section 18(2) of the amended section. The assessee carried the matter in appeal before the Appellate Assistant Commissioner who by a common order dated 26th September, 1966, accepted the assessee's contention that on the date on which the voluntary returns were filed by him, i.e., 26th November, 1963, Section 18(2) as amended was not on the statute book and penalties could be imposed only in terms of Section 18(2) as it stood prior to its amendment. The Appellate Assistant Commissioner set aside the orders of penalty passed by the Wealth-tax Officer and directed him to pass fresh orders in accordance with the law that prevailed at the time when the default had occurred. The Appellate Assistant Commissioner came to the conclusion that under Section 18, prior to its amendment, no order imposing penalty can be passed by the Wealth-tax Officer without obtaining the prior approval of the Inspecting Assistant Commissioner of Wealth-tax. Against the orders of the Appellate Assistant Commissioner, the department filed appeals for all the five assessment years and they were disposed of by a common order made by the Tribunal. Cross-objections were also filed by the assessee. The Tribunal also held that as punishment for an offence must be awarded in accordance with the law that was in force at the time when the offence was committed, the proper provision to be applied in the case was the provision of Section 18(1)(a) of the Wealth-tax Act as it stood prior to its amendment. This reference has come before us on an application made by the Commissioner of Wealth-tax, Andhra Pradesh.

3. The main question for consideration in this reference is whether the provisions of Section 18 of the Wealth-tax Act, as amended by Act No. 46 of 1964, are applicable to the proceedings for levy of penalty. Shri P. Rama Rao, the learned counsel for the department, contended that:

(1) the law applicable for levy of penalty is as prevailing on the date on which the assessment in the course of which penalty proceedings are initiated is completed. In the instant case, the assessments for all the years in dispute were completed on 28th July, 1965, and on the same date, notices under Section 18(2) were issued. The law applicable, therefore, is the amended Section 18 and not the unamended Section 18(2);

(2) the provisions of Section 18(4) prior to its amendment in regard to obtaining the previous approval of the Inspecting Assistant Commissioner of wealth-tax is only procedural. The assessee has no right in a procedural matter and cannot say that the penalty should be levied by a particular forum. By deleting the provision for obtaining the previous approval of the Inspecting Assistant Commissioner of Wealth-tax, only the forum has been changed. The amended section, therefore, would govern the proceedings for levy of penalty ;

(3) even assuming that the assessee had any vested right, such a right arose only on the date when the proceedings for levy of penalty were started. Section 18 as amended was in force on the date on which the notices for levy of penalty were issued. The proceedings are therefore governed by the amended section.

4. The learned counsel for the assessee argued that the provisions of Section 18(4) are not merely procedural but are substantive. A privilege is created in favour of the assessee by providing for a safeguard. By virtue of the provisions of Section 6(c) of the Central General Clauses Act, the repeal of old Section 18(4) will not in any way affect the safeguard granted to an assessee in respect of the default committed prior to the amendment of the section. Unamended Section 18(4) is, therefore, attracted to the case in question. The second contention is that when the amended Section 18 provides for a minimum penalty, Section 6(d) of the General Clauses Act is attracted. By virtue of that provision, a repeal of a provision cannot affect any penalty incurred in respect of any offence committed against any enactment so repealed. Penalty is levied because of default in furnishing the returns. The last day for furnishing the returns in each of the assessment years was the 30th June of that year. The default, therefore, was committed on the 30th June of the years, 1959, 1960, 1961, 1962 and 1963. The law applicable on the aforesaid dates in regard to the penalty will be applicable and not the amended Section 18.

5. Section 18 of the Wealth-tax Act, prior to the amending Act 46 of 1964, as is relevant to the case before us, reads :

'(1) If the Wealth-tax Officer......in the course of any proceedingsunder this Act is satisfied that any person-

(a) has without reasonable cause failed to furnish the return of his net wealth which he is required to furnish under Sub-section (1) or Sub-section (2) of Section 14 or Section 17 or has without reasonable cause failed to furnish it within the time allowed and in the manner required ; or......

he......may, by order in writing, direct that such person shall pay byway of penalty-

(i) in the case referred to in Clause (a), in addition to the amount of wealth-tax payable by him, a sum not exceeding one and a half times the amount of such tax, and......

(2) No order shall be made under Sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard.

(4) The Wealth-tax Officer shall not impose any penalty under this section without the previous approval of the Inspecting Assistant Commissioner of Wealth-tax.'

6. By Central Act 46 of 1964, which came into force from 1st April, 1965, the wealth-tax Act was amended. For Section 18, a new Section 18 was substituted which, as is material to the case before us, reads:

'(1) If the Wealth-tax Officer......in the course of any proceedingsunder this Act is satisfied that any person-

(a) has without reasonable cause failed to furnish the return which he is required to furnish under Sub-section (1) of Section 14 or by notice given under Sub-section (2) of Section 14 or Section 17, or has without reasonable cause failed to furnish it within the time allowed and in the manner required by Sub-section (1) of Section 14 or by such notice, as the case may be ; or......

he......may, by order in writing, direct that such person shall pay byway 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 equal to two 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 ;......

(2) No order shall be made under Sub-section (1) unless the person concerned has been given a reasonable opportunity of being heard......

(5) No order imposing a penalty under this section shall be passed after the expiration of two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of penalty have been commenced.

Explanation.--In computing the period of limitation for the purposes of this section, the time taken in giving an opportunity to the assessee to be reheard under the proviso to Section 39 and any period during which a proceeding under this section for the levy of penalty is stayed by an order or injunction of any court shall be excluded.'

7. A comparison of the aforesaid two provisions shows that, in the new section, there has been a departure in regard to the penalty that may be imposed on the assessee. Under the old Section 18, the maximum penalty was fixed at one and a half times of the amount of tax, there being no minimum stipulated whereas, in the new Section 18, a minimum penalty has been stipulated which is two per cent. of the tax for every month during which the default continued and the maximum penalty has been reduced to 50 per cent. of the amount of tax. Thus, it can be seen that the maximum penalty has been considerably reduced. Under Sub-section (4) of old Section 18, no penalty can be imposed by the Wealth-tax Officer without the prior approval of the Inspecting Assistant Commissioner whereas under Sub-section (3) of new Section 18, the Wealth-tax Officer has to make a reference to the Commissioner in cases where the minimum penalty imposable exceeds Rs. 1,000. No period of limitation was prescribed in the old Section 18 whereas a period of limitation of two years has been prescribed in Sub-section (5). The aforesaid are the changes introduced by the new Section 18 which are relevant to the case before us.

8. The question that is referred to us, though makes a mention of only Section 18(1)(a) of the Wealth-tax Act as it stood prior to the amendment effected from 1st April, 1965, the whole of the provisions of Section 18(a) that are relevant to the imposition of penalty under Section 18(1)(a) are within the ambit of the question referred to us. It is not argued by the learned counsel for the assessee that, while answering the question referred to us, we have to confine ourselves to the provisions of the old Section 18(1)(a) of the Act and cannot take into consideration the provisions of the old Section 18(4). While making an order of penalty under Section 18(1)(a), the provisions of Section 18(4) are attracted and, therefore, while answering the question referred to us, it is necessary to consider not only the provisions of Section 18(1)(a) but also the provisions of other sub-sections of the Act prior to its amendment and after its amendment to answer the question referred to us. There is no dispute about this aspect of the matter.

9. We have already pointed out that, while repealing Section 18 and enacting a new Section 18 which has been substituted in its place, no provision has been made for obtaining the previous approval of the Inspecting Assistant Commissioner before making any order levying penalty on the assessee. The question for consideration is whether the provision for obtaining prior approval of the Inspecting Assistant Commissioner before making an order levying penalty is procedural or substantive in nature. Under the old and new Section 18, the initial authority to levy penalty is theWealth-tax Officer. Under the old section, before levying penalty, it was necessary for him to obtain the previous approval of the Inspecting Assistant Commissioner. There is no provision in the Act which shows that an assessee can make a representation to the Inspecting Assistant Commissioner before he grants his approval to the Wealth-tax Officer to levy the penalty on an assessee. Under the old section, the jurisdiction to levy the penalty was vested in the Wealth-tax Officer with a superimposed condition that he cannot make an order unless the previous approval of the Inspecting Assistant Commissioner was obtained. The result of this provision was that instead of the order of penalty being considered by the Wealth-tax Officer alone, it was considered also by the Inspecting Assistant Commissioner. In other words, the forum for the imposition of penalty was the Wealth-tax Officer and also the Inspecting Assistant Commissioner. In the new Section 18, a provision similar to the old Section 18(4) does not find a place. The result, therefore, is that in cases governed by the new Section 18, it is no longer necessary for the Wealth-tax Officer to obtain the prior approval of the Inspecting Assistant Commissioner. The forum under the new section is restricted only to the Wealth-tax Officer. By virtue of the repeal of Section 18(4), the change effected is only a change in the forum. It is now well settled by the decision of the Supreme Court in Union of India v. Sukumar Pyne : 1966CriLJ946 that a person accused of the commission of an offence has no vested right to be tried by a particular court or a particular procedure except in so far as there is any constitutional objection by way of discrimination or the violation of any other fundamental right is involved. In the instant case, it cannot be said that there is any constitutional objection to the penalty proceedings being instituted by the Wealth-tax Officer.

10. The learned counsel for the assessee contended that by virtue of Section 6(c) of the General Clauses Act, Section 18(4) is applicable to the case as the offence for which penalty was being levied was committed long before the new Section 18 came into force. Section 6(c) of the General Clauses Act reads :

' Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not--......

(c) affect any right, privilege, obligation or liability, acquired, accrued or incurred under any enactment so repealed.'......

11. It is argued that the old Section 18(4) gave a right to the assessee that his case be considered by the Inspecting Assistant Commissioner before any order was made by the Wealth-tax Officer.

12. Assuming that there was no such right, it was a privilege conferred upon the assessee inasmuch as a safeguard was created in his favour. In order to determine whether Section 6(c) is applicable, it is necessary to first ascertain whether the old Section 18(4) created any right or privilege in the assessee. We have already shown that a person accused of an offence has no right to be tried by a particular court and, therefore, it cannot be said that any right was created in the assessee to have his case considered by the Inspecting Assistant Commissioner prior to the order levying penalty being made by the Wealth-tax Officer.

13. We now consider the question whether any privilege is created in favour of the assessee. The word 'privilege' occurring in Section 6(c) cannot be interpreted in isolation. It occurs along with the expressions 'right, obligation or liability'. It is in this light that the word 'privilege' will have to be interpreted. The word 'privilege' used in the section does not merely mean an advantage or boon which by virtue of an existing procedure a party may deem to have. In the context in which it appears, it has to be defined as a right, advantage or immunity in law enjoyed by a person or class of persons beyond the common advantages of others. The word has to be construed in a strict sense as having a legal meaning when it is employed in a statute and not as having a loose or figurative meaning.

14. The construction of the word 'privilege' came up for consideration before a Full Bench of the Rangoon High Court in Arunachalam Chettiar v. R. M. K. A. R. Valliappa Chettiar AIR 1938 Ran 130 . An argument was advanced before the learned judges by reference to Section 10 of the Civil Procedure Code as amended by the Adaptation of Laws Order, 1937, when the territory of Burma was separated from British India. Section 10, Civil Procedure Code, before its adaptation by the aforesaid order, enabled the court to stay the proceedings before it in case the matter in issue directly and substantially was in issue in a previously instituted suit between the same parties in British India. By the Adaptation of Laws Order, the effect of Section 10 was made applicable only to cases where a previously instituted suit was pending in a court in British Burma or before His Majesty in Council. It was argued by the learned counsel appearing for the respondent before the learned judges that the respondent had a privilege in that by being a litigant before 1st April, 1937, to ask the court to stay proceedings during the pendency of the suit at Devakottah, a court in British India. While dealing with this argument, the learned Chief Justice observed at page 132 :

'Now, where the word 'privilege' is coupled with 'right' in a statute it must be held to have a well-defined meaning. It does not mean some advantage or boon which by reason of existing procedure a party may deem himself in fact to possess, but may be defined as a right, advantage or immunity in law enjoyed by a person or class of persons beyond the common advantages of others. The word must be construed in a strict sense as having a legal meaning when it is employed in a statute and not as having a loose or figurative meaning.'

15. The learned Chief Justice AIR 1938 Rang 130 then extracted a passage from the judgment of Cockburn C.J. in Fearon v. Mitchell [1872] 7 QBD 690, which reads:

'The word 'rights' especially when taken in conjunction with the words 'powers or privileges' must mean rights acquired adversely to the rest of the world and peculiarly to the individual.'

16. The learned Chief Justice, after extracting the aforesaid passage, further observed :

'Therefore, the words, 'right, privilege, obligation or liability already acquired, accrued or incurred', in the Government of Burma Adaptation of Laws Order, 1937, must have reference not to the mere enjoyment of what is in fact a boon or to the existence of being in fact under a disadvantage, but to rights, privileges, obligations or liabilities which are enforceable at law.'

17. We are in respectful agreement with the aforesaid observations. Applying the principles set out above, we find that the safeguard granted by the old Section 18(4) does not amount to any privilege as it was not enforceable at law. We have, therefore, no hesitation in rejecting the contention of the learned counsel for the assessee that, by virtue of Section 6(c) of the Central General Clauses Act, old Section 18(4) should be held to be applicable to the case before us. We hold that it is not necessary for the Wealth-tax Officer to obtain the prior approval of the Inspecting Assistant Commissioner for levy of penalty against the assessee.

18. It was alternatively argued by the learned counsel for the department that assuming there was a vested right in the assessee, that penalty should be levied by a particular forum, that right will arise only from the date on which the penalty proceedings commenced and not on the date on which the default was committed. The Supreme Court in Garikapati Veeraya v. Subbiah Choudhury : [1957]1SCR488 has held that :

'The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal.'

19. It is well settled that penalty proceedings commence after the completion of the assessment proceedings. The Supreme Court in Jain Brothers v. Union of India : [1970]77ITR107(SC) , while determining the question whether Section 297(2)(g) of the Income-tax Act, 1961, offends Article 14 of the Constitution of India, held at pages 116 and 117:

'It is obvious that for the imposition of penalty it is not the assessment year or the date of the filing of the return which is important but it is the satisfaction of the income-tax authorities that a default has been committed by the assessee which would attract the provisions relating to penalty. Whatever the stage at which the satisfaction is reached, the scheme of Sections 274(1) and 275 of the Act of 1961, is that the order imposing penalty must be made after the completion of the assessment. The crucial date, therefore, for purposes of penalty, is the date of such completion.'

20. In view of the aforesaid two pronouncements of the Supreme Court, even assuming that there was a vested right in the assessee that the penalty proceedings should be completed by a particular forum, such a vested right arose only when the assessment proceedings were completed. The law applicable on the date of the completion of the assessment proceedings will be applicable for proceedings relating to levy of penalty and not the law on the date on which the default was committed. Admittedly, the assessment proceedings in the case before us were completed on 28th July, 1965, when the new Section 18 had come into force. The new Section 18, therefore, governs the penalty proceedings ; and it is not necessary for the Wealth-tax Officer to obtain the prior approval of the Inspecting Assistant Commissioner before levying penalty on the assessee.

21. The next question is whether, while determining the quantum of penalty, it is whether the old Section 18(1)(a) that will govern the proceedings or the new Section 18(1)(a). We have already pointed out the difference between the two sections. Under the old provision, no minimum penalty was prescribed and the maximum that could be levied was one and a half times the amount of such tax. In the new section a minimum of two per cent. of the tax per month has been stipulated and the maximum has been reduced from one and half times the amount of tax to 50 per cent. of the tax. It is contended by the learned counsel for the department that for determining the amount of penalty it is the provision of new Section 18(1)(a) which will have to be taken into consideration and not the provisions of old Section 18(1)(a) as the new provisions are not more onerous than the old provisions. He also contends that Section 6(d) of the General Clauses Act, is therefore, not applicable. On the contrary, it is the contention of the learned counsel for the assessee that, under the old provision, no minimum amount of penalty had been stipulated and the authorities concerned were competent to levy penalty which would in some cases be entirely nominal. Now, by stipulating the minimum penalty the discretion which vested in the authorities concerned has been taken away and as far as the amount of minimum penalty is concerned, the new provisions are more onerous than the old section, and, therefore, Section 6(d) of the General Clauses Act is attracted.

22. We will first determine whether the provisions of the new Section 18(1)(a) in regard to the amount of penalty are more onerous. In order to determine this question, we will have to consider the overall effect of the penalty provisions in the new section and cannot confine ourselves only to the minimum prescribed in the new section. Further, when a minimum penalty is not prescribed in a provision, it is the maximum penalty provided for, which has to be taken into consideration in determining whether a particular provision is more onerous. As already pointed out, under the provisions of the old section, the maximum penalty was one and half times the amount of the tax whereas under the new section, the maximum penalty is only 50 per cent. of the tax. Admittedly, therefore, the maximum penalty has been reduced. In addition to the reduction of the maximum penalty, there is a further provision in the new Section 18 which prescribes a period of limitation which certainly is advantageous to the assessee. Considering the provisions in regard to penalty contained in the new Section 18(1), we are of the opinion that those provisions are not more onerous than the provisions contained in the old Section 18(2). We are supported in this conclusion of ours by the following observations of the Supreme Court made in K. Satwant Singh v. State of Punjab : [1960]2SCR89 :

'A law which provides for a minimum sentence of fine on conviction cannot be read as one which imposes a greater penalty than that which might have been inflicted under the law at the time of the commission of the offence where for such an offence there was no limit as to the extent of fine which might be imposed.'

23. The aforesaid observation was made by their Lordships while considering the question whether Section 10 of Ordinance No. 29 of 1943 imposed penalty in contravention of the provisions of Article 20 of the Constitution. The fine which could have been imposed upon an accused under Section 420 of the Penal Code was unlimited. Section 10 of the Ordinance made provision for imposing a minimum fine.

24. Their Lordships of the Supreme Court in Jain Brothers' case : [1970]77ITR107(SC) , while comparing the provisions in regard to penalty in the Income-tax Act of 1922, and the Income-tax Act of 1961, observed at pages 114 and 115:

'As the present case relates only to a penalty having been imposed on account of the failure to furnish a return, we may notice the main changes made in the Act of 1961 in the matter of imposition of penalty for such a default. The first departure from the Act of 1922 is that no prosecution could be instituted under the Act of 1922 in respect of the same facts on which a penalty had been imposed. Under the Act of 1961, a penalty can be imposed and a prosecution launched on the same facts. The second change is that under the Act of 1922, the Income-tax Officer could not impose any penalty without the previous approval of the Inspecting Assistant Commissioner. Under the 1961 Act, no such previous approval is necessary. Thirdly, the Act of 1922 did not prescribe any minimum amount of penalty. According to the Act of 1961, the penalty cannot be less than the minimum prescribed. This is, of course, subject to the Commissioner's power of reduction. Fourthly, the maximum penalty imposable in a case where there has been a failure to file a return in compliance with a notice issued by the Income-tax Officer has been reduced under the Act of 1961. Lastly, there was no time limit in the Act of 1922 for passing of a penalty order but under the Act of 1961, a period of two years has been prescribed by Section 275 as stated above. Thus, whereas under the Act of 1922, a defaulting assessee had certain protection in the matter of prosecution no such protection has been afforded under the Act of 1961; but the maximum amount of penalty which can be imposed has been reduced and a period of limitation has been prescribed for passing a penalty order which is of distinct advantage to a defaulting assessee. It is not possible to accept the suggestion on behalf of the appellants that the substantive and procedural provisions relating to penalty contained in the Act of 1961 are altogether onerous.'

25. The aforesaid observation also supports our conclusion.

26. Section 6(d) of the General Clauses Act provides that a repeal shall not affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed This provision is applicable only in cases where the penalty provided by the repealing Act is more onerous than the penalty provided in the repealed Act. We have already shown that the provisions of the new Section 18(2) are not more onerous in regard to penalty than the provisions of the old Section 18(2). We are, therefore, of the opinion that Section 6(d) of the General Clauses Act is not attracted.

27. We will now consider the decisions relied upon by the learned counsel for the assessee. In Commissioner of income-tax v. Nazir and Sons : [1949]17ITR486(Bom) , the Bombay High Court decided that a new offence could not be retrospectively constituted by an amending Act. In the case before the learned judges, a registered firm had committed default by not complying with the requisition under Section 22(4) of the Indian Income tax Act, 1922, before the amendment of Section 28 of the said Act. At the date when the notice was issued against the assessee, his failure to comply with the requisition under Section 22(4) was not constituted an offence by thelegislature at all. It is in this context that the aforesaid observation was made by the learned judges. This decision is obviously not applicable to the case before us as there is no attempt to create any new offence by the amending Act. Reliance is also placed on behalf of the assessee on In re T.S. Chockalingam AIR 1945 Mad 521, where it has been held that the liability arises the moment the offence is committed. This decision also does not help the assessee as we have shown that the provisions of Section 6(d) of the General Clauses Act are not attracted. A decision of the Kerala High Court in Hajee K. Assainar v. Commissioner of Income-tax : [1971]81ITR423(Ker) was relied upon in support of the argument that where rights and procedure are dealt With together and are inextricably linked, it may well be the intention of the legislature that the old rights are to be determined by the old procedure and that only the new rights under the amended provision are to be dealt with by the new procedure. This decision also is not applicable as there is no inextricable linking up of right and procedure in the instant case.

28. In the result, we hold that the Appellate Tribunal was not right in holding that the provisions of Section 18(1)(a) of the Wealth-tax Act as it stood prior to the amendment effected on 1st April, 1965, were applicable. Our answer to the reference is that the provisions of Section 18(1)(a) of the Wealth-tax Act as amended on 1st April, 1965, are applicable to the case. The reference is answered in the negative and against the assessee.


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