Gauhati High Court
Commissioner Of Wealth-Tax vs Smt. Ratni Devi Beria And Smt. ... on 6 October, 1988
Equivalent citations: [1989]179ITR202(GAUHATI)
Author: B.L. Hansaria
Bench: B.L. Hansaria, S.N. Phukan
JUDGMENT B.L. Hansaria, J.
1. These applications are under Section 27(3) of the Wealth-tax Act, 1957, hereinafter called "the Act". The question of law on which reference was prayed for before the learned Income-tax Appellate Tribunal, Gauhati Bench, was as follows :
"Whether, on a proper construction of Section 5(1)(viii) of the Wealth-tax Act, 1957, the Tribunal was justified in holding that the value of gold ornaments which was included by the Wealth-tax Officer on the basis that these were jewellery is not includible in the net wealth of the assessee for the assessment years 1969-70, 1970-71 and 1971-72 ?"
2. After due consideration of the rival submissions, the learned Tribunal felt that the following question of law does arise out of the order :
"Whether the word 'jewellery' in Section 5(1)(viii) of the Wealth-tax Act, 1957, prior to the amendment of the Section and the introduction of Explanation 1 by the Finance (No. 2) Act of 1971, could take in gold ornaments without precious or semi-precious stones embedded on them ?"
3. Despite having felt that a question of law did arise, the Tribunal declined to make a reference to this court and rejected the applications filed by the petitioner in view of the decision of the Orissa High Court in CWT v. Smt. Binapani Chakraborty [1978] 114 ITR 82. The Tribunal has also stated that the question required to be referred by the Revenue was academic and self-evident.
4. It is contended by Shri Choudhury that the decision rendered by the Orissa High Court is not binding on the Tribunal and he submitted that the question should be decided by this court whose decision would be binding on the Gauhati Bench of the Tribunal. Though Shri Choudhury is right in making the submission, Shri Saraf has urged that the answer to the point is self-evident, and, as such, there is no compulsion on this court to ask the Tribunal to state the case and to refer the question for an answer by this court. In this connection, he referred to CIT v. Chander Bhan Harbhajanlal [1966] 60 ITR 188 (SC), wherein it was stated by the apex court that when the question of law raised is not substantial and the answer to the question is self-evident, the High Court is not bound to call for a reference.
5. Whether jewellery is a part of the net wealth or not has been the subject-matter of discussion in legal circles. Before the words "but not including jewellery" were inserted in Section 5(1)(viii) of the Act, it was held by the Supreme Court in CWT v. Arundhati Balkrishna [1970] 77 ITR 505, that jewellery intended for the personal use of the assessee would be exempted from the purview of the Act. This view was taken by referring to Clause (viii) of Section 5(1) which was in the following language :
"furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee."
6. It may be stated that this Clause (viii) deals with the assets which are exempted from taxation because of what has been stated in Section 5(1) of the Act. The question before the Supreme Court in Arundhati's case [1970] 77 ITR 505, was, whether jewellery can be said to be an asset intended for the personal use of the assessee. This question was answered in the affirmative. Clause (viii) was thereafter amended and the words "but not including jewellery" were inserted in this clause by the Finance (No. 2) Act of 1971 by Section 32 of the Act. This amendment was made retrospective with effect from April 1, 1963. The same Finance Act, by the same section, inserted Explanation 1 in Clause (viii) which reads as below :
"For the purposes of this clause and Clause (xiii), 'jewellery' includes --
(a) 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 stones, and whether or not worked or sewn into any wearing apparel."
7. This amendment was, however, given effect to from April 1, 1972.
8. The position which thus emerges is that though jewellery was brought out from the purview of Section 5(1)(viii) of the Act and the same was given retrospective effect from April 1, 1963, Explanation 1 which sought to include gold ornaments within the definition of "jewellery" was given effect to from April 1, 1972. This clearly shows that the intention of the Legislature was not to include gold ornaments within the definition of "jewellery" prior to April 1, 1972.
9. In our view, the answer to the question posed above, therefore, is self-evident inasmuch as though jewellery was taken out of the purview of Clause (viii) aforesaid, gold ornaments were included in the definition of "jewellery" with effect from April 1, 1972. Thus, for the assessment years prior to April 1, 1972, gold ornaments could not have been included within the definition of "jewellery". As, in the present case, we are concerned with the assessment years 1969-70, 1970-71 and 1971-72, it is apparent, according to us, that gold ornaments could not have been brought within the fold of the Act for the purpose of realising wealth-tax. The position after April 1, 1972, would, of course, be different.
10. In this connection, Mr. Choudhury has, however, drawn our attention to a decision of the Gujarat High Court mentioned in the A.I.R. Manual as reported in 1974 Taxation 134 (See CWT v. Jayantilal Amritlal [1976] 102 ITR 105 (Guj)). The main decision being not before us, we have not felt it safe to take into consideration the ratio as mentioned in the Manual.
11. Before closing, it may be stated that though Shri Choudhury has argued that the Explanation was added as a matter of abundant caution to allay any apprehension and to bring it in harmony with the main section, we are of the view that even if it be so the Explanation cannot be given effect to prior to April 1, 1972, because though the exclusion of jewellery from Section 5(1)(viii) was given retrospective effect from April 1, 1963, Explanation 1 was made effective from April 1, 1972. If the Legislature had wanted gold ornaments to be made part of jewellery from April 1, 1963, there was obviously no hurdle in making the Explanation effective from April 1, 1963.
12. In view of what has been stated above, though a point of law has arisen, it cannot be held that the answer is not self-evident
13. The petitions are, therefore, dismissed.