SMT. HARBANS KAUR versus THE COMMISSIONER OF WEALTH TAX, JULLUNDUR

Citation: [1997] 1 S.C.R. 184 · Decided: 13-01-1977 · Supreme Court of India · Disposal: Dismissed

Judgment (excerpt)

A 
SMT. HARBANS KAUR 
v. 
THE COMMISSIONER OF WEALTH TAX, JULLUNDUR 
JANUARY 13, 1977 
B 
[B.P. JEEVAN REDDY AND K.T. THOMAS, JJ.] 
Wea/tit Tax Act,, 1957: Sections 18(!) and 18-B. 
Wealth Ta.\~Assessment Years 1970-71 to 1975- 76---Commissioner of 
c Wealth Ta.\~Powcr-under S. 18-B-Scope of-Commissioner ordered reduc-' 
ti on of penalty in preference to gra11t of full waiver supported by 
reasons-field: such reduction of penalty was not unjust or i11"e/eva11t~is-
cretion has to be exercised fairly and justly and not arbitrarily or fanciful-
ly-lncome Tax Act, 1961, S.273-A. 
D 
Words and Phrases: 
"!11 his discretion" and "may"-Mea11i11g of-111 the -context of S.18-B of 
the Wealth Tax Act, 1957. 
E 
The appellant was liable to penalty under Section J !J uf the Wealth 
Tax Act, 1957 for failure to tile the wealth tax returns in 11!Spect of the 
.Assessment Years (AYs) 1970·71 to 1975-76. When the Act was amended 
by incorporating Section 18·8 In the Act, the appellant submitted wealth 
tax returns and made a request for run waiver or the penalty as envisaged 
in the new provision. The respondent-Commissioner round that the appel· 
F lant had complied with the conditions stipulated in Section 18·8 or the Act 
in respect of the said Assessment Years. However, keeping in view of the 
facts and circumstances of the case, the Commissioner, instead of granting 
waiver for the full penalty, had only reduced it to 5%. 
G 
The appellant bad filed a writ petition before the High Court con-
tending that once the appellant was found to be entitled to the benefit of 
Section 18·B of the Act, the Commissioner should have waived the entire 
amount of penalty. The. High Court dismissed the petition i11 limi11e. Hence 
this appeal. 
H 
Dismissing the appeal, this Court 
184 
>. 
,r 
-<., 
re 
' 
-- ' 
H. KAUR v. C.0.W.T. 
185 
HELD.: 1.1. lfthe conditions stipulated in section 18·8.ofthe Wealth A 
Tax Act, 1957 are satisfied the Commissioner has discretion in the matter. 
In exercise of that discretion, the Commissioner can either reduce the 
amount of the penalty or he may even waive the entire penalty. It is for the 
Commissioner to decide on the facts ,of a particular case whether a waiver 
in entirety or a reduction alone is warranted. [187-D] 
1.2. The words "the Commissioner may in his discretion ...... reduce or 
B 
-( 
waive the amount of penalty" in Section 18-B of the Act are clear enough 
> 
to show that the power conferred on the Commissioner is to be exercised 
by him in such manner as he deeins just and proper. When a discretion is 
conf~rred on an authority the same must be exercised fairly and not ar· C 
bitrarily, justly and not fancifully. [187-E] 
S.G. Jaisinghani v. U11io11 of India & Ors., AIR (1967) SC 1427, relied 
on. 
2. Even if the legislature has not used the words "in his discretion" D 
in Scctio11 18(B)(1) the Commissioner could have exercised only a discre-
tionary power in view of the employment of the word "may". There is no 
warrant for the proposition that the Commissioner, if satisfied of the 
compliance of conditions; has only one choice i.e. to waive the penalty in 
entirety; [18?·G, 188-~] 
Shalamtla Mehra, CWT (1976) 102 ITR (Del.); Sha11karaApaya Swami 
v. WTO, Belgauni, (1976) 103 ITR 649 (Kar.);A11ja11appa v. CWT (1980) 124 
ITR 433 (Kar.); Rasiklal Ra11chhodbhai Patel v. CWT, (1980) 121 ITR 219 
(Guj.); Sardar Kartar Singh v. CWT, (1982) 135 ITR 375 (Gau.) and Purshot· 
E 
tam Thackersey v. KN. A11a11trama A;yar, (1985) 154 ITR 438 (Born.), held F 
inapplicable. 
3. In the Jnstant case, the Commissfoner has indicated his own 
reasons for resorting to the power of reduction of the penalty in 
preference to granting full waiver of the penalty. The reasons indicated 
in the orders are not in any manner unjust or irrelevant Therefore, there 
is no ground to interfere with the impugned orders and the judgments 
of the High Court. [188-H, 189-A] 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1334 of 
G 
~1~ 
H 
186 
SUPREME COURT REPORTS 
(1997) 1 S.C.R. 
A 
From the Judgment and Order dated 8.8.80 of the Punjab and 
Haryana High Court in C.W.P. No. 1692 of 1980. 
Dhruv Mehta and S.K. Mehta for the Appellants. 
Dr. v. Gaurishankar, Anil Srivastava and B. Krishna Prasad for the 
B Respondent. 
The Judgment of the Court was delivered by 
THOMAS J. Appellants in these appeals were liable to penalty under 
C section 18 ~f the Wealth Tax Act, 1957, (for short the Act') for failure to, 
file the retu

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