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.

J.P. Shah for the Appellant.

M.R. Bhatt of Messrs R.P. Bhatt and Co. for the Respondent.

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 counsel for the petitioner could not be characterised as baseless and, that on the other hand, it is perfectly justified. All that the respondent said on the question goes thus:

"XXX. I have gone through the case records of the assessee and have considered the submission made on behalf of the assessee and given my careful consideration to the matter. I am of the view that the assessee deserves to get some relief, as the conditions laid down in section 18B of the Act for the waiver/reduction of interest charged and penalty levied/leviable are satisfied in the case of the assessee. On a careful consideration of the matter. I am of the view that 50 percent. reduction of interest charged and penalty levied/leviable in the case of the assessee would meet the ends of justice and, accordingly, interest charged and penalty levied/leviable by the Assessing Officer in the case of the assessee referred to above is reduced by 50 percent. and the balance 50 percent. shall be payable by the assessee. The Assessing Officer to give effect to this order XX."

As per the extract made above, there is a view expressed that the conditions laid down in section 18B of the Act are satisfied in the case of the petitioner. However, without expressing any reason, the respondent proceeds to say that the petitioner deserves to get some relief. The provision set forth in section 18B of the Act gives the power or vests the power to reduce or waive when there is a satisfaction on certain factors. But, if the respondent chooses not to waive in full despite the satisfaction having been arrived at for waiver, there must be sound and convincing reasons expressed therefor. That is absolutely lacking in the present case. This feature alone obliges us to interfere in this special civil application. Accordingly, this special civil application is allowed and the order impugned is quashed. Rule is made absolute to the above extent, with no order as to costs.

We make it clear that it will be open to the respondent to deal with the matter afresh in accordance with law and we are sure that, while doing so, the respondent will not depart from the well-accepted norms on the question of waiver.

M.BA./186/T.F.Order accordingly.