Law:

Section:

Section 18(1)(a) (as it stood for assessment year 1969-70) of the Wealth-tax A ct, 1957 - Penalty - For late filing of return - Whether section 18(1)(a), as it stood for assessment year 1969-70, was violative of articles 14 and 19(1)(f) of the constitution of India - Held, no Facts The petitioner challenged the constitutional validity of section 18(1)( a), as it stood for the assessment year 1969-70, on the following grounds: (i) that this provision permitted the levy of minimum penalty of ½ per cent of the net wealth assessed per month for each month of delay in filing the return and, therefore, it was in contravention of article 19(1)(f) of the Constitution as in ah appropriate case the penalty may be equal to the value of total wealth assessed, that is, the maximum limit of the penalty permissible, and was, therefore, confiscatory; (ii) that section 18(1)(a)( i) permitted the imposition of penalty for delay of each month whereas the wealth-tax was assessed on the net wealth per year and this was in contravention of article 19(1)(f); (iii ) that the penalty should be co-related with the duty and not with the net wealth assessed and, thus, the penalty being leviable at ½ per cent of the net wealth was unreasonable and was hit by article 19(1)(f); (iv)that as this provision conferred jurisdiction on the WTO to impose minimum penalty which was 2 per cent of the assessed wealth up to the maximum which was equal to the total value of the assessed wealth and thereby gave a wide discretion to the WTO without any guidelines, this discretion violated article 14 of the Constitution; and (v) that levy of penalty at the rate of ½ per cent was discriminatory because the assessee, who was a smaller assessee and whose wealth-tax was assessed at ½ per cent. also will suffer a penalty of ½ per cent whereas the other who may be a substantial assessee and paid wealth-tax at a higher rate still the penalty which could be imposed was only ½ per cent and in this manner so far as a smaller assessee was concerned it was harsh, whereas for a substantial assessee it was rather lenient and, thus, was discriminatory and, therefore, contrary to the provisions contained in article 14 of…

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