COMMISSIONER OF WEALTH TAX Vs. SADIQALI SAMSUDDIN

JUDGEMENT

(1.) AT the instance of the CWT, Gujarat, the following question is referred to us for our advice "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the fixed deposit blocked account of the assessee in the Ceylonese bank, the face value of which had been subjected to tax in the assessee's wealth-tax assessment was not cash and, therefore, it should have been valued under s. 7(1) of the WT Act, 1957 ? Briefly stated, the facts leading to this reference are as under : The assessment years involved in this reference are 1969-70 to 1973-74. The assessee is a repatriate from Ceylon where he was carrying on business. The assessee claimed that he was compelled to leave Ceylon and that though he was permitted to visit that country occasionally for short duration, he was not allowed to carry on business there, with the result that he left behind certain assets which were, under the directions of the Ceylon Government, required to be disposed of and the proceeds realised had to be kept with a Ceylon bank. Though it is not clear from the statement of the case, it appears that the assets were disposed of somewhere in 1968-69 and the amount so realised and deposited in the Chartered Bank of Ceylon in a fixed deposit account, as converted into Indian currency at the official rate of exchange as on the valuation date, was as shown below :

(2.) THE next question of law arises as to whether the amount belonging to an Indian national and lying in the frozen fixed deposit account in a bank in a foreign country and subject to temporary restraint prohibiting repatriation of such amount and permitting repatriation, if at all, of the balance amount only after certain deductions would amount to cash so as to entitle the wealth-tax authorities to take the face value thereof for the purpose of computation of the wealth-tax liability of the assessee. Sec. 3 of the Act is a charging section which provides that subject to the other provisions contained in the Act, there shall be charged for every assessment year commencing on and from the first day of April, 1957, a tax in respect of the net wealth on the corresponding valuation date of every individual, HUF and company at the rate or rates specified in the Schedule. Sec. 2(m) defines "net wealth" to mean the amount by which the aggregate value computed in accordance with the provisions of the Act of all the assets, wherever located, belonging to the assessee on the valuation date, including assets required to be included in his net wealth as on that date under the Act, is in excess of the aggregate value of all the debts owed by the assessee

(3.) IN the first place, it should be emphasised that the legislative intent as evidenced in the scheme incorporated in s. 7 for the purpose of valuation of assets is what value it would fetch if sold in the open market. In other words, the basic scheme contained in s. 7 is to evaluate every asset with reference to its market value, i.e., the value which a willing seller will realise from a willing buyer. It is from this formula of the scheme of valuation that "cash asset" has been excluded. On recognised principles of interpretation of statutes, an exception clause is to be strictly construed. It is, therefore, difficult for us to agree with the learned counsel for the Revenue that there is no warrant in the section for giving a restricted meaning to the term "cash". On principle as well as on authority, it is settled position in law that an exception clause must be construed strictly and cannot be interpreted so as to nullify or destroy the main provision. (See T. Devadasan vs. Union of India, AIR 1964 SC 179). An exception has to be confined within its own limits and must be restricted to the matter embraced within it and it is not permissible to extend the meaning of the exception by analogy or by reference to the meaning of the same or similar word, in other cases, so as to include cases which cannot be reasonably brought within the purview of the language employed. Having regard to the overall context of the provision, we are not inclined to agree with the learned counsel for the Revenue that the word "cash" should be given an extended and enlarged meaning since otherwise it would include all sorts of bank accounts, including bills of exchange, deposits, cheques, bonds, dividend warrants and other securities which can be easily converted into money, Our attention has been invited by the learned counsel for the Revenue to the principle digested in Corpus Juris Secundum, Volume 14. He referred to article I 1, at page 14, in which the word "cash" has been defined. It has been stated that the word "cash" as a noun is generally used to signify money or its equivalent, including coin or specie, and, under certain circumstances, bank notes, drafts, bonds or commercial paper easily convertible into money. It is also true as digested in the said article at page 16 that in popular parlance, "cash" is used to refer not merely to money, but to money in hand, under full control for use in paying obligations and liabilities and has been defined as meaning money at command or in hand, either in current coin or other legal tender, or in bank bills or cheques paid and received as money; money in the treasury. We do not think that the learned counsel for the Revenue was justified in urging, on the basis of these observations in Corpus Juris Secundum, to persuade us to adopt a wider meaning for the term "cash" occurring in s. 7 of the Act, because in the ultimate analysis, it would depend in each instance on the context or circumstances of the use of the word "cash" in a given statute. At page 17 of Corpus Juris Secundum, Vol. 14, this is precisely what has been observed under the caption "What the term includes" :