Madras High Court
Commissioner Of Wealth Tax vs Varadharaja Theatres (P) Ltd. on 15 December, 1998
Equivalent citations: (2000)162CTR(MAD)276
Author: R. Jayasimha Babu
Bench: R. Jayasimha Babu
ORDER
R. Jayasimha Babu, J:
The Tribunal has held that the cinema building owned by the assessee is entitled to exemption from wealth-tax under section 40(3)(vi) of Finance Act, 1983, as it stood during the relevant period, namely, the years 1984-85, 1985-86, 1986-87, despite the fact that cinema house was not mentioned in that provision and it came to be included therein only after the Finance Act, 1988, was passed and that amendment was given effect to from 1-4-1988. The Tribunal has taken the view that that amendment was curative and declaratory. That view of the Tribunal cannot be approved. When Parliament enacts law, the law must be understood with reference to the language used in the provision construed in the light of the scheme of the Act and object of the statute and the provisions therein. If with a view to confer a benefit which had not been conferred before the law was that does not necessarily imply that the amendment is to be given retrospective effect even without a legislative declaration, to that effect. Every case of removal of hardship by Parliament does not indicate a Parliamentary intention to remove that hardship from an anterior date unless the scheme of the Act, the context in which the amendment was made and the language of the amendment warrants such a view. When a thing which was specifically excluded is subsequently included, such inclusion cannot be regarded an indicative of an intention on the part of the legislature to have treated what is now included as having been included at all times.
2. One possible way of testing as to whether an amendment is merely declaratory or is substantive and, therefore, prospective is to examine the amended provision with a view to ascertain as to whether that provision without the aid of amendment is capable of taking within it what was subsequently included after the amendment. Applying that test to the facts of this case it is clear that section 40(3)(vi) of the said Act as it stood at the relevant time was not capable of being construed as including cinema house when what was regarded as business assets had been exhaustively listed and that list did not include cinema house
3. Counsel for the revenue very fairly brought to our notice the decision rendered by the Karnataka High Court in the case of CWT v. Prakashi Talkies (P) Ltd. (1993) 202 ITR 121 (Karn) wherein that court took the view that the mentioning of cinema houses in section 40(3)(vi) of the said Act is to be regarded as only curative and declaratory. Having perused that judgment, with great respect to the learned Judges who decided that case, we are unable to agree with that view, The memorandum explaining the provisions of the Amending Act does not support the view that Parliament intended this amendment to be declaratory. If, as already observed, without the aid of the amendment, it is not possible to treat cinema houses as exempted from wealth-tax as per unamended provision. The fact that the provision was subsequently amended does not of its own force make it declaratory.
4. We, therefore, answer the question referred to us which reads as follows :
"Whether on the facts and in the circumstances of the case, the Tribunal was right in cancelling the orders of the Commissioner of Wealth Tax passed under section 25(2) of the Wealth Tax Act, 1957 on the ground that the theatre building has to be excluded out of the assets included in section 40(3)(vi) of the Finance Act, 1983, as it forms part of the business assets of the assessee-company for the assessment years 1984~85, 1985-86 and 1986-87"'?
In favour of the revenue and against the assessee and hold that for the assessment years from 1984-85 to 1986-87, the cinema house owned by the assessee was not exempt from wealth-tax under section 40(3)(vi) of the said Act.