JUDGMENT

Mrs. SUJATA V. MANOHAR, J.:—These appeals by special leave arise from a common judgment of the High Court of Orissa in seven Reference Applications before it under Section 27(1) of the Wealth-tax Act, 1957. The High Court was required to consider the following question (1976 Tax LR 978, Para 1) :-

"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 the Explanation by the Finance Act (No. 2) of 1971 could take in gold ornaments without precious or semi-precious stones embedded on them?"

The High Court has answered the question thus (1976 Tax LR 978, Para 4):-

"The word jewellery in Section 5(1) (viii) of the Wealth-tax Act of 1957 prior to amendment of the provision and introduction of Explanation I by the Finance Act (No. 2) of 1971 would not take in gold ornaments without precious or semi-precious stones embedded on them."

The Commissioner of Wealth Tax has filed the present appeals from the above decision.

2. The relevant assessment years are 1965-66 to 1971-72. The relevant valuation dates are 31st of March of each of the years in question. We are therefore, required to consider the provisions of Section 5(1)(viii) of the Wealth-tax Act, 1957 as in force during the relevant period. Section 5 of the Wealth-tax Act, 1957 deals with exemptions from wealth-tax granted in respect of certain assets. Section 5(1)(viii), prior to its amendment by the Finance Act 2 of 1971, was as follows:-

"5(1): Subject to the provisions of sub-section (1A) wealth-tax shall not be payable by an assessee in respect of the following assets, and such assets shall not be included in the net wealth of the assessee--

(1) x x x x x

x x x x x

(viii) furniture, household utensils, wearing apparel, provisions and other article intended for the personal or household use of the assessee."

Section 5(1)(viii) was interpreted in the context of the provisions of Section 5(1)(xiii) and 5(1)(xv) by this Court in the case of Commr, of Wealth-tax, Gujarat v. Arundhati Balkrishna, 77 ITR 505 : (AIR 1971 SC 915). The Court said that jewellery intended for the personal use of the assessee would come within the scope of the exemption granted under Section 5(1)(viii) -being "other articles intended for the personal - use of the assessee". As a consequence, the Finance Act 2 of 1971 amended the provisions of Section 5(1)(viii) with retrospective effect from 1st of April, 1963, to read as follows:-

"5(1)(viii): furniture, household utensils, wearing apparel, provisions and other articles intended for the personal or household use of the assessee, but not including jewellery."

(Underlining ours)

By the same Finance Act of 1971, Explanation I was also added to Section 5(1)(viii). The Explanation, however, was made effective only prospectively, with effect from 1-4-1972. Explanation 1 is as follows:-

"Explanation 1 : For the purposes of this clause and clause (xiii), jewellery includes-

(a) ornaments made of gold, silver, platinum of any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel;

(b) precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel."

3. In the present appeals we are concerned with the period during which the retrospectively amended Section 5(1)(viii) was in operation but without Explanation 1 (which came into effect from 1st of April, 1972). We have to consider what is excluded from the benefit of the exemption granted under Section 5(1)(viii). Is it only those items of jewellery which are studded with precious or semi-precious stones or whether all ornaments and jewellery made out of precious metals (such as gold, silver or platinum or alloys with precious metals) are excluded from the exemption, although they may not be studded with precious or semi