Commissioner Of Wealth-Tax vs Himalaya Trading Company
1987 Latest Caselaw 139 Del

JUDGMENT

S. Ranganathan, J.

1. These are five reference application filed at the instance of the Commissioner of Wealth-tax relating to the assessment years 1965-66 to 1969-70. They raise one question of law which is framed in these terms by the applicant :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the Wealth-tax Officer to recalculate the value of the property at 14, Barakhamba Road, New Delhi ?"

2. The question does not really bring out the controversy between the parties which arises in the following way.

3. The Tribunal in disposing of the appeal by a common order approved of the direction given by the Commissioner of Wealth-tax (Appeals) that the value of the above property should be determined in accordance with rule 1BB of the Wealth-tax Rules. The grievance of the department is that this has been done overlooking the fact that rule 1BB came into operation only on April 1, 1979, and, therefore, according to the Department, it will be operative only for the assessment year 1979-80 and onwards. Counsel for the petitioner submits that this issue which was decided by the Tribunal in the case of Biju Patnaik is already the subject matter of reference both by the Tribunal directly as well as by the orders passed under section 27(3) of the Act by this court in a number of cases. He, therefore, requests that the question of law may be directed to be referred by the Tribunal.

4. On the other hand, on behalf of the respondent, it is submitted that the question of law sought to be raised by the Department even if considered to be a question of law need not be referred as the answer to it is self-evident. They point out that rule 1BB is a purely procedural provision (vide Standard Mills Co. Ltd. v. CWT ) and, therefore, it is retrospective in the sense that it will be applicable to all assessments which are pending as on April 1, 1979. In support of this contention, reliance is placed on the decision of the decision of the Karnataka High Court in CWT v. Vidyavathi Kapur [1984] 150 ITR 319, where an application under section 27(3) was dismissed in similar circumstances. Reference is also made to a decision of the Madhya Pradesh High Court in which the question of law, though referred under section 27(1) of the Act, was answered by the High Court in favor of the assessed. Certain other decisions are also relied upon which lead, according to the respondent, to the same conclusion. Counsel for the respondent also relies on an order made by this court on January 25, 1982, in W.T.C. No. 127 of 1979 where a question of law similar to the one presently under consideration was raised in relation to the applicability of section 7(4) of the Wealth-tax Act and inserted with effect from April 1, 1976. This court dismissed the Department's application on the ground that no question of law arose.

5. As we have already mentioned, this court has already directed a reference regarding the scope of the applicability of rule 1BB in a number of cases. The decision in W.T.C. No. 127 of 1979 was arrived at in relation to a different provision of law and on the ground that a contrary interpretation might lead to absurd results. The impact of this rule which is presently under consideration may have to be considered in the different context in which it is set. We think that a question of law does arise which is to be considered and decided by this court. We, therefore, direct the Tribunal to make a consolidated statement of these cases for the assessment years 1965-66 to 1969-70 and refer the following question of law for the decision of this court :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in directing the Wealth-tax Officer to value the property at 14, Barakhamba Road, New Delhi, on the basis of rule 1BB of the Wealth-tax Rules 1957 ?"

6. The applications stand disposed of. There will be no order as to costs.