COMMISSIONER OF WEALTH TAX, AMRITSAR versus SURESH SETH

Citation: [1981] 3 S.C.R. 419 · Decided: 07-04-1981 · Supreme Court of India · Bench: R.S. PATHAK · Disposal: Dismissed

Cited by 4 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

) 
419 
COMMISSIONER OF WEALTH TAX, AMRITSAR 
v. 
SURESH SETH 
April 7, 1981 
[ R.S. PATHAK AND E.S. VENKATARAMIAH, JJ.] 
Wealth Tax Act, 1957-Scope of section 18(1) (a) of the Act-Whether the 
offenre relating to the omission to file the Wealth Tax Returns was a continuing 
offence--Penalty has to be computed in accordance with the law in force on the 
last day on which the return in question has to be filed-The 1964 and 1969 Amend-
ments to the Wealth Tax Act has no retrospective effect. 
The assessee-respondent filed his Wealth Tax returns for the assessment 
years 1964-65 and 1965-66 on March 18, 1971, while he was required by section 
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 Wealth Tax Officer completed the assessment for the said years 
on March 22, 1971 and also commenced proceedings for levying penalty under 
section 18(1) (a) of the Act for the late submission of returns. The Wealth Tax 
Officer levied the penalties for different periods at different rates, as provided by 
the 1964 and 1969 Amendments, treating the failure to file the return in time as a 
"continuing offence"_ The orders levying penalties were upheld in appeal by 
the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal, 
Amritsar Bench, Amritsar. A consolioated reference made by the Tribunal at 
the- instance of the assessee was answered by the High Court of Punjab in favour 
of the assessee after rejecting the contention of the department that the default 
or failure to file the return in time was a continuing default and that the penalty 
had to be computed for the period prior to April I, 1965 in accordance with 
section 18 as it stood prior to its amendment by the Wealtli-tax (Amendment) 
Act, 1964, for the period between April 1, 1965 to March 31, 1969 in accordance 
with section 18 of the Act as amended by the Wealth-tax (Amendment) Act, 
1964 and for the period between April I, 1969 to March 18, 1971 (on which date 
the returns were filed) in accordance with section 18 of the Act as amended by 
the Finance Act, 1969. Aggrieved by the decision of the High Court, the 
Department has filed these appeals under Article 136 of the Constitution. 
Dismissing the appeals, the Court 
HELD 1:1. Where the default complained of is one falling under section 
18(1) (a) of the Wealth Tax A~t, the penalty has to be computed in accordance 
A 
B 
c 
D 
E 
F 
G 
with the law in force on the last day on which the return in question had to be 
H 
filed. Neither the amedment made in 1964 nor the amendment made in 1969 has 
retrospective effect. [ 434 C-D) 
A 
B 
c 
D 
E 
F 
G 
H 
420 
SUPREME COURT REPORTS 
(1981] 3 S.C.R. 
1 :2. Section 18 of the Wealth Tax Act does not require the assessee to file 
a return during every month after the last day to file it is over. Non-performance 
of any of the acts mentioned in section 18(1) (a) of the Act gives rise to a single 
default and to a single penalty, the measure of which, however, is geared up to 
the time lag between the last date on which the return has to be filed and the 
dak on which it is filed. 
The default, if any committed is committed-on the 
last date allowed to fil~ the return. The default cannot be one committed every 
month thereafter. [433 G-H, 434 A] 
l :3. The words "for every month during which tt>e default continued" indi-
cate only the multiplier to be adopted in determining the quantum of penalty and 
do not have the effect of making the default in question a continuing one. Nor 
do they make the amended provisions modifying the penalty applicable to earlier 
defaults in the absence of necessary provisions in the amending Acts; The princi-
ple underlying section 6 of the General Clauses Act is clearly applicable to 
these cases. [ 434 B-C] 
2:1. A liability in law ordinarily arises out of an act of commission or an 
act of omission. When a person does an act 
which Jaw 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 Jaw. 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 wrongful act or failure to perform an act required by 
law to be done beco

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