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Manohar Lal Nagpal Vs. Commissioner of Wealth-tax and anr. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ Petition No. 1667 of 1977
Judge
Reported in[1985]151ITR558(P& H)
ActsWealth Tax Act, 1957 - Sections 14(2) and 18(1); Constitution of India - Article 226
AppellantManohar Lal Nagpal
RespondentCommissioner of Wealth-tax and anr.
Appellant Advocate R.C. Setia, Adv.
Respondent Advocate Ashok Bhan and; Ajai Mittal, Advs.
Excerpt:
- sections 80 (2) & 89 & punjab motor vehicles rules, 1989, rules 85 & 80: [t.s. thakur, cj, jasbir singh & surya kant, jj] appeal against orders of state or regional transport authority imitation held, a stipulation regarding the period of limitation available for invoking the remedy shall have to be strictly construed. that is because any provision by way of limitation is in the nature of a restraint on the remedy provided under the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply..........the years 1964-65 to 1968-69 were not filed till september 13, 1971. for this late submission of returns, a penalty was imposed upon the petitioner in respect of each year by the wto, bhatinda, by his order of march 25, 1975 (annexure p-2). the appeal against this order by the petitioner came to be dismissed ex parte on january 4, 1977.2. it appears, however, that the petitioner really looked for relief to the commissioner of wealth-tax, whom he had approached under section 18(2a) of the w.t. act, 1957 (hereinafter referred to as 'the act'), on may 10, 1972, seeking thereby the waiving of the penalty leviable under section 18(1)(a) of the act.3. the commissioner of wealth-tax, jullundur, by his order of march 24, 1977 (annexure p/3), waived the penalty in respect of the assessment.....
Judgment:

S.S. Sodhi, J.

1. There was late submission of wealth-tax returns by the petitioner, Manohar Lal. The returns for the years 1964-65 to 1968-69 were not filed till September 13, 1971. For this late submission of returns, a penalty was imposed upon the petitioner in respect of each year by the WTO, Bhatinda, by his order of March 25, 1975 (annexure P-2). The appeal against this order by the petitioner came to be dismissed ex parte on January 4, 1977.

2. It appears, however, that the petitioner really looked for relief to the Commissioner of Wealth-tax, whom he had approached under Section 18(2A) of the W.T. Act, 1957 (hereinafter referred to as 'the Act'), on May 10, 1972, seeking thereby the waiving of the penalty leviable under Section 18(1)(a) of the Act.

3. The Commissioner of Wealth-tax, Jullundur, by his order of March 24, 1977 (annexure P/3), waived the penalty in respect of the assessment years 1964-65 to 1967-68, but declined the petitioner's prayer for such waiver for the year 1968-69, on the ground that the return for this assessment year had been filed after the petitioner had been issued the requisite notice under Section 14(2) of the Act.

4. As regards the notice under Section 14(2) for the year 1968-69, it was issued in the name of the petitioner, but the person who actually received it was one Girdhari Lal. It has come on record that this Girdhari Lal was the secretary of the Fazilka Debwali Transport Company Limited, Abohar, of which the petitioner is a director.

5. Mr. R. C. Setia, counsel for the petitioner, sought to contend that there was no warrant for the assumption that receipt of notice by Girdhari Lal was receipt thereof by the petitioner as Girdhari Lal had not been authorised to receive such notices on behalf of the petitioner nor had it been established that the petitioner had been informed of it by Girdhari Lal. The argument thus being that the return for 1968-69 too had been filedwithout notice and was, therefore, a voluntary return entitling the petitioner to waiver of penalty for this assessment year also.

6. The matter whether or not a particular person is authorised to receive notices is one of fact to be determined by the competent authorities having regard to the material on record after hearing the party concerned. On this criteria, the finding recorded in this respect regarding the said Girdhari Lal warrants no interference. It was after hearing the petitioner and taking into account the matters mentioned in his order (annexure P-3) that the Commissioner held Girdhari Lal to have been authorised to receive notices on behalf of the petitioner. Upsetting this finding is clearly not called for. It must be taken, therefore, that the return of 1968-69 was filed after receipt of notice under Section 14(2) of the Act and, therefore, the case of the petitioner for the assessment year 1968-69 was not similar to that of the earlier years.

7. The other and main point urged was with regard to the relevant provisions of the W.T. Act under which penalty for late submission of the return for 1968-69 was leviable, the question here being whether it was to be as per the provisions of the Act as they stood on the last date for submission of returns, namely, June 30, 1968, or as on September 13, 1971, when the return was actually filed. Prior to March 31, 1969, the relevant provisions of Section 18 were as set out below:

'(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,...'

There was an amendment in the Act in 1969 and the provisions thereafter came to be as under ;

'(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 wealth-tax 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 the manner aforesaid...'

The question raised here stands concluded by the judgment of the Supreme Court in CWT v. Suresh Seth : [1981]129ITR328(SC) , where in dealing with a similar point, it was held that the amendment made in 1969 had no retrospective effect and further that non-performance of any of the acts mentioned in Section 18(1)(a) of the Act gave rise only to a single default, such default being committed on the last date allowed for filing the return and the penalty had thus to be computed in accordance with the law in force on the last day on which the return in. question had to be filed.

8. The law having been so settled, there can be no escape from the conclusion that the penalty leviable on the petitioner in respect of the year 1968-69 was that as per the provisions of the W.T. Act as they stood on June 30, 1968. This being so, the rate at which penalty had been imposed on the petitioner was on the face of it not warranted by law.

9. Faced with this situation, counsel for the Commissioner of Wealth-tax sought to press in aid the judgment of the Supreme Court in Shivram Poddar v. ITO : [1964]51ITR823(SC) , to contend on the precedent provided thereby that the W.T. Act provided a complete machinery for assessment of tax and for relief in respect of any improper or erroneous order made by the revenue authorities and, therefore, the petitioner's remedy lay under the provisions of this Act and not by way of writ under Article 226 of the Constitution. Great stress was here laid upon the fact that further appeal was competent which the petitioner chose not to avail of and he must, therefore, be barred from seeking relief in these proceedings.

10. The existence of an alternate remedy has of course to be taken into consideration in the exercise of the discretion which vests in the court under Article 226 of the Constitution, but where the impugned order is patently contrary to law in that it proceeds to decide the matter on the basis of a law not applicable and ignores that which really applies, interests of justice clearly impel interference. In the circumstances as exist in the present case, the fact that a further appeal lay and the petitioner did not avail of this remedy should not be taken to bar the relief claimed particularly when the petitioner had approached the Commissioner of Wealth-tax in the matter under Section 18(1)(a) of the Act.

11. For the foregoing reasons, the order of the Commissioner of Wealth-tax of March 24, 1977 (annexure P-3) with regard to the assessment year1968-69 is hereby set aside and the case is remitted to him for decision afresh according to law.

12. This writ petition is, accordingly, hereby accepted with costs. Counsel's fee Rs. 500.


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