TMI Blog2002 (10) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... the one arrived at on the application of a particular method of valuation which is also one of the recognised and accepted methods. The rule is procedural and not substantive and is applicable to all proceedings pending on April 1, 1979, when the rule came into force. The procedural law, generally speaking, is applicable to pending cases. No suitor can be said to have a vested right in procedure'. - Since the controversy stands concluded by the aforesaid judgment of the Supreme Court, no referable question of law arises - - - - - Dated:- 4-10-2002 - Judge(s) : N. N. MATHUR., H. R. PANWAR. JUDGMENT The judgment of the court was delivered by N.N. MATHUR J.-The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has made the instant reference under section 27(1) of the Wealth-tax Act, 1957, seeking opinion of this court on the following questions: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amendment made by the Finance Act, 1988, removing wealth-tax on stock-in-trade was a substantive law and hence not retrospective in operation? 2. Whether, on the facts and in the circumstances of the case, the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the remaining years, i.e., 1985-86, 1986-87, 1987-88 and 1988-89, were also completed. However, by the time the assessments were completed, section 40 of the Finance Act was amended whereby it was provided that certain assets which were held by the company as stock-in-trade in a business carried on by it, such assets shall not form part of the net wealth of the company for the purpose of levy of wealth-tax. The Commissioner of Wealth-tax (Appeals) held that the amendment brought by the Finance Act, 1988, was effective from April 1, 1989, and as such the assessee was not entitled to any exemption for the assessments from 1985 to 1989. He, however, revised the valuation of various properties. The Tribunal also held that the amendment by the Finance Act, 1988, removing the levy of wealth-tax on stock-in-trade being in the realm of substantive law, does not have a retrospective operation. The Tribunal accordingly directed the Assessing Officer to value the properties as per Schedule III to the Wealth-tax Act, 1957. Question No. 1: This question has been referred at the instance of the assessee. It is submitted by Mr. Rajendra Mehta, learned counsel for the assessee, that by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to a substantial extent. With a view to circumventing tax avoidance by such persons, I propose to revive the levy of wealth-tax in a limited way in the case of closely held companies. Accordingly, I am proposing the levy of wealth-tax in the case of closely held companies at the rate of two per cent., on the net wealth represented by the value of specified assets, such as, jewellery, gold, bullion, buildings and lands owned by such companies. Buildings used by the company as factory, godown, warehouse, hotel or office for the purposes of its business or as residential accommodation for its low paid employees will be excluded from net wealth." The relevant sections as appearing in the Finance Bill, 1983, are extracted as follows: "(3) The assets referred to in subsection (2) shall be the following, namely:- (i) gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals; (ii) precious or semi-precious stones whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel; (iii) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals not being any such precious metal or alloy held for use as raw material in industrial production; (ii) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel; (iii) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel; (iv) utensils made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals (v) land other than agricultural land: Provided that nothing in this clause shall apply to any unused land held by the assessee for industrial purposes or for construction of a hotel for a period of two years from the date of its acquisition by him. (vi) building or land appurtenant thereto, other than building or part thereof used by the assessee as factory, godown, warehouse, cinema house, hotel or office for the purposes of its business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Explanation.--For the purposes of this sub-section, 'balance-sheet', as drawn up on the valuation date, shall have the same meaning as in rule 11 of Schedule III to the Wealth-tax Act. (5) For the purposes of the levy of wealth-tax under the Wealth-tax Act, in pursuance of the provisions of this section, (a) section 5, clause (a) of sub-section (2) of section 7 and clause (d) of section 45 of that Act and Part II of Schedule I to that Act shall not apply and shall have no effect; (b) the remaining provisions of that Act shall be construed so as to be in conformity with the provisions of this section. (6) Nothing in this section shall apply to any institution, association or body, whether incorporated or not and whether Indian or non-Indian, which the Central Government may, having regard to the nature and object of such institution, association or body, specify by notification in the Official Gazette and every notification issued under this sub-section shall be laid, as soon as may be after it is issued, before each House of Parliament. (7) Subject to the provisions of sub-section (5), this section shall be construed as one with the Wealth-tax Act." It is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thomson C.B., in giving judgment for the Attorney-General, said: 'The duty in this instance was in fact imposed by the first Act, but the gross mistake of the omission of the weight for which the sum expressed was to have been payable occasioned the amendment made by the subsequent Act, but that had reference to the former statute as soon as it passed, and they must be taken together as if they were one and the same Act.' Where an Act is in its nature declaratory, the presumption against construing it retrospectively is inapplicable. In Attorney-General v. Theobald [1890] 24 QBD 557, section 11 of the Customs and Inland Revenue Act, 1889, as to the liability of voluntary settlements to stamp duty, was held retrospective, although the litigation in which its terms were involved had commenced before it was passed. Acts of this kind, like judgments, decide similar cases pending when the judgments are given, but do not reopen decided cases." The apex court in Channan Singh v. Smt. Jai Kaur, AIR 1970 SC 349 has held: "It is well settled that if a statute is curative or merely declares the previous law retroactive operation would be more rightly a scribed to it than the legislatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued as retrospective and applies to all the pending matters on the date when the amendment was made unless there is a specific indication that such was not the intention of the Legislature. The court answered the questions referred as follows: "The controversy in the present case stands concluded by the judgment of the Supreme Court in CWT v. Sharvan Kumar Swarup and Sons [1994] 210 ITR 886. It has been held by the apex court in this case that 'rule 1BB partakes of the character of a rule of evidence. It deems the market value to be the one arrived at on the application of a particular method of valuation which is also one of the recognised and accepted methods. The rule is procedural and not substantive and is applicable to all proceedings pending on April 1, 1979, when the rule came into force. The procedural law, generally speaking, is applicable to pending cases. No suitor can be said to have a vested right in procedure'. Since the controversy stands concluded by the aforesaid judgment of the Supreme Court, no referable question of law arises in the matter and the learned members of the Tribunal were justified in refusing to state the case and to refer the question for adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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