TMI Blog2003 (1) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - - Dated:- 29-1-2003 - Judge(s) : D. K. SETH., R. N. SINHA. JUDGMENT D. K. SETH J. -An application for interim order in terms of prayer (f) of the petition has since been asked for in connection with this appeal. A preliminary objection has since been raised by Mr. Mallick that this writ petition has become infructuous in view of the omission of rule 2 of the Wealth-tax Rules which been challenged in this writ petition as ultra vires, invalid and inoperative. In elaborating his submission, he contended that the appellant had prayed for a declaration that rule 2 is inapplicable to the case of the appellant and ultra vires in view of section 4(1)(b) of the Wealth-tax Act, 1957. On this ground, a prayer is made in the writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submission during two days on various aspects and addressed the court on the merits of the case. The moot point he had advanced is that rule 2 was not purely procedural, neither Schedule III is a procedural law and, therefore, omission of rule 2 will not deprive the petitioner of his rights and absolve the liabilities and hence the writ petition requires determination on the merits and cannot be dismissed as infructuous. This question has to be determined on the basis of the averments made and the prayers sought for in the writ petition. Paragraphs 27 and 28 as aforesaid read thus : "27. Under the partnership law and partnership agreement net assets or net wealth of a firm, that is assets minus liabilities, is determined only once th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubsistence of the partnership and so long as the assessee continues to remain as a partner in the firm and the firm in question is not ripe for liquidation or has not been dissolved on the relevant valuation date." The prayers that have been made are quoted below : "(a) A declaration that rule 2 of the said Rules is inapplicable in the case of valuation of a partner's interest in the firm during the subsistence of the partnership under section 4(1)(b) of the said Act and is ultra vires, invalid and inoperative. (b) A writ and/or order and/or direction of and/or in the nature of certiorari commanding the respondents and each of them to transmit and certify records of the case to this court in order that rule 2 of the said Rules and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot claim any right under the other part of the rule that he is entitled to certain rights under the said rule which is to be maintained. Once a rule is omitted and if it is procedural in nature, in that event, its omission will not be germane to the issue and shall in no way affect the right or liability of the parties since no one has any right to procedure. Admittedly, the substantive right flows from the statute, namely, under section 4(1)(b) or under section 7 of the Wealth-tax Act, respectively, under which the valuation is to be made. The procedure for valuation was prescribed in rule 2 in respect of partnership firms, which has since been omitted and substituted by Schedule III. These are, admittedly, manners in which the valuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the said rule stands omitted. It is stated on instruction by Mr. Mallick at the Bar that the Department will not proceed on the basis of rule 2, it will proceed on the basis of Schedule III. Therefore, on the basis of notice, the Department cannot proceed on the basis of rule 2 since omitted. Then again, as soon it is held that Schedule III is a procedural one, in that event, on the introduction of Schedule III all pending matters are to be governed by Schedule III. There is no scope for the Department to proceed on the basis of rule 2 after Schedule III had come into force in respect of matters, which are pending adjudication. Therefore, relief in the form of quashing of the notice appears to have already been achieved. If Dr. Pal h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... position will not be different even if the rule has been framed by virtue of the power vested under an enactment; it remains a 'rule' and takes its colour from the definition of the term in the Act (General Clauses Act) . . ." Admittedly, here rule 2 is neither a Central Act nor a Regulation as contemplated under section 6 of the General Clauses Act and as such the omission thereof will not attract the application of section 6 of the General Clauses Act. Dr. Pal had relied on unamended section 7 and had pointed out that it had created some liability with which rule 2 is in contradiction. Section 7(1) also stood amended. But that is not under challenge. By reason of section 7(1), as it stood prior to the amendment, it cannot be conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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