Law: Wealth Tax Act, 1957

Section: 18B

Wealth tax--- ----Penalty---Interest---Reduction or waiver of penalty and interest--­Discretion of CWT under S.18B---CWT satisfied that grounds existed for waiver of penalty and interest---CWT not granting complete waiver---Reasons for not granting complete waiver must be given---Commissioner of Wealth Tax's order not valid---Indian Wealth Tax Act, 1957, S.18B---Constitution of India, Art.226. Section 18B of the Wealth Tax Act, 1957, gives the power to or vests the power in the Commissioner to reduce or waive interest and penalty when there is a satisfaction on certain factors. But, if the Commissioner chooses not to waive in full despite the satisfaction having been arrived at f6r waiver, there must be sound and convincing reasons expressed therefore. Held, accordingly, that since the Commissioner of Wealth Tax had stated that the conditions laid down in section 18B were satisfied in the case of the petitioner but without stating reasons had granted waiver of only 50 percent. of the interest and penalty, his order is not valid. JUDGMENT S. NAINAR SUNDARAM, C.J.---Rule. Mr. M.R. Bhatt, learned counsel appears for the respondent and waives service of rule. Considering the limited scope of the controversy involved in this special civil application, we have taken it up for final disposal today itself. We heard learned counsel on both the sides, on the merits. The impeachment in this special civil application is of the order made by the respondent under section 18B of the Wealth Tax Act, 1957 (hereinafter referred to as "the Act"), for waiver. The order of the respondent is brief and he has chosen to reduce the interest charged and penalty levied by 50 percent. only. The primary complaint advanced by Mr. J.P. Shah, learned counsel for the petitioner, is that having found satisfaction with the case of the assessee for waiver, no reason has been expressed for denying total waiver and confining it only to 50 percent. Advancing this argument, learned counsel for the petitioner submits that what happened at the hands of their respondent violates the rule of audi alteram partem. We find when we go through the impugned order of the respondent that the complaint of learned…

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