VRINDAVAN GOVERDHAN LAL PITTIE versus UNION OF INDIA & ORS.

Citation: [1986] 2 S.C.R. 851 · Decided: 29-04-1986 · Supreme Court of India · Bench: R.B. MISRA · Disposal: Dismissed

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Judgment (excerpt)

851 
VRINDAVAN GOVERlllAN IAL PilTIE 
v. 
URION OF INDIA & <115. 
APRIL 29, 1986 
[R.B. MISRA AND G.L. OZA, JJ.] 
Wealth Tax Act, 1957 s. lB(l)(a) as amended by Finance 
)- Act 1969 - Delay in filing return - Minillllm penalty 1/2% of 
the value of net wealth for each month of delay - Leavy of 
penalty - Whether constitutionally valid. 
~ 
The petitioner was granted extension of time for three 
months for filing his wealth tax return. However, he filed the 
, 
return four months after the period of extension. The Wealth 
~ Tax Officer imposed a penalty on him under s. 18(l)(a) of the 
Wealth Tax Act 1957 at the rate of 1/2% of the total wealth 
A 
B 
c 
assessed for every month of default and the total penalty 
D 
imposed for four months was equal to Rs. 6,784. This order of 
the Wealth Tax Officer was 
maintained 
by the Appellate 
Assistant Colllllissioner. Thereafter, the petitioner filed a 
writ petition in the High Court challenging the constitutional 
validity of s. 18(l)(a) of the Act as amended by the Finance 
"'> Act, 1969 on the ground that it infringes Articles 14 and 
E 
19(l)(f) of the Constitution. The High Court dismissed the 
petition on the ground that the petitioner had not exhausted 
the alternative remedies available to him under the Act. 
'1 
The petitioner then filed the present writ petition 
before the Supreme Court challenging the provisions contained 
F 
in s. lB(l)(a) on the grounds : (i) that the section permits 
--+ 
the levy of minillllm penalty of 1/2% of the net wealth assessed 
per month for each month of delay in filing the return and 
therefore it is in contravention of Article 19(1 )(f) of the 
Constitution as in an appropriate case, the penalty may be 
equal to the value of total wealth assessed that is the 
G 
maximum limit of the penalty permissible and is therefore 
confiscatory ; (ii) that the penalty should be co-related with 
\. the duty and not with the net wealth assessed and thus the 
·-r penalty leviable at 1/2 per cent of the net wealth is 
unreasonable, and therefore, it is hit by Article 19(l)(f); 
H 
A 
B 
c 
D 
E 
F 
G 
H 
852 
SUPREME COURT REPORTS 
[1986] 2 s.c.R. 
(iii) that the provision gives a wide discretion to the Wealth 
Tax Officer without any guidelines to impose minilllllll penaltyi.-<" 
which is 1/2 per cent of the assessed wealth upto the maxi1111m 
which is equal to the total value of the assessed wealth and 
thus this discretion violates Article 14 of the Constitution ; 
and (iv) that so far as a smaller asses see is concerned the 
penalty of 1/2 per cent is harsh, whereas for a substantial 
assessee it is rather lenient and thus is discriminatory and, 
therefore, contrary to the provisions contained in Article 14 
of the Constitution. 
i 
Dismissing the Writ Petition, 
HELD : 1. The petition is without any substance. The~
imposition of penalty at the rate of 1/2 per cent of the total. 
assessed wealth for each 1110nth's delay could not be said to be 
confiscatory in nature. It is not unreasonable for any reasort 
on the basis of which it could be said that it will be in 
contravention of Article 19(l)(f). Moreover, the section has 
since been amended and no such dispute is likely to arise in 
future. (862 B; 860 H; E-F] 
2. In case of a smaller assessee 1/2% of the total 
wealth assessed will be 1111ch less as compared to the 1 /2 per 
cent in the case of a substantial assessee whose 
wealth.J.,_~ 
assessed is of 1111ch higher value thus although it is 1/2 per 
cent in both the cases, as it is related to the total wealth 
assessed, smaller the assessee lesser will be the penalty and 
richer the assessee the penalty will be higher and by no 
stretch of imagination this could be said to be eithel')-
unreasonable or discriminatory. 
The penalty will be for 
default of each month and in this view of the matter, 
therefore, neither it could be contended that it is i~ 
contravention of Article 19(l)(f) nor in contravention of 
Article 14 of the Constitution. (861 C-E] 
· 
.Jamb H.K. Sultan lbrahia .Adtma v. Wealth Tu Officer 
I(I) Iaraflgwlf, 91 I.T.R. 417, approved. 
Kwmathat 'lhatbomd Moopil !lair v. State of l'erala • . 
Anr., (1961] 3 S.C.R. 77, in-applicable. 
f--• 
ORIGINAL JURISDICTION : Writ Petition No. 75 of 1972. 
VRINDAVAN GOVERDllAN LAL v. U.O.I. [OZA, J.] 
853 
A 
Under Article 32 of the Constitution of India. 
K.L. Rathi and A. Subba Rao, for the Petitioner. 
S.C. Manchanda, K.C. Dua and Ms. A. Subhashini, for the 
Respondent. 
B 
The Judgm

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