The main legal point established in the judgment is that curative and remedial amendments are generally intended to have retrospective operation, and the applicability of procedural laws to pending cases.

N.N. Mathur, J.-The Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has made the instant reference under Section 27(1) of the Wealth-tax Act, 1957, seeking opinion of this Court on the following questions

1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the amendment made by the Finance Act, 1988, removing wealth-tax on stock-in-trade was a substantive law and hence not retrospective in operation?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in directing that the immovable properties be valued as per Schedule III to the Wealth-tax Act for the assessment of assessment year 1984-85 whereas the said Schedule III came into existence with effect from the assessment year 1989-90?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the decision of the Supreme Court in the case of CWT vs. Sharwan Kumar Swamp and Sons [1994] 210 ITR 886 given in respect of the Wealth-tax Rules was applicable to the provisions of Schedule III to the Wealth-tax Act and thereby in giving retrospective effect to the provisions contained in Schedule III to the Wealth-tax Act ?“

2. The material facts necessary for answering the reference are that the asses-see, Jodhan Real Estate Development Co. (P.) Ltd., is a wholly owned subsidiary of Jodhan Investment and Finance Corporation Pvt. Ltd. The holding company is a closely held company wherein the shares are held by Shri Gaj Singh of Jodhpur and his family members. The main business of the company is that of dealing in real estate, purchasing and developing of land, acquiring, taking on lease, sub-lease, etc., any property and to invest and deal in lands, buildings, shares, debentures, etc. The company purchased the following properties for consideration as mentioned against each of them from Shri Gaj Singh:

Rs.

Jawahar Khana 48,000

Saloon House 1,57,000

Large house, Mt. Abu 46,000

Land near Stadium, Jodhpur 77,000

Land to the east and west of Circuit House 80,000

3. Theassessee also constructed a cinema hall in the name of Darpan Cinema costing Rs. 50.67 lakhs. The cinema was made open for public in June, 1985. The sale consideration for the properties purchased in the

year 1971 was not paid up to the assessment year 1988-89. The property of Darpan Cinema was shown as fixed asset in the balance-sheet of the company, other properties have been shown as stock-in-trade valued at cost amounting to Rs. 4,30,500. On account of revival of the levy of wealth-tax in the case of closely held companies by Section 40 of the Finance Act, 1983, the assessee filed its return of wealth for the assessment year 1984-85 on March 30, 1985, declaring a total wealth of Rs. 14,52,800. The Assessing Officer enhanced the valuation of the properties and computed the net wealth at Rs. 1,14,62,300. The assessments for the remaining years, i.e., 1985-86, 1986-87, 1987-88 and 1988-89, were also completed. However, by the time the assessments were completed, Section 40 of the Finance Act was amended whereby it was provided that certain assets which were held by the company as stock-in-trade in a business carried on by it, such assets shall not form part of the net wealth of the company for the purpose of levy of wealth-tax. The Commissioner of Wealth-tax (Appeals) held that the amendment brought by the Finance Act, 1988, was effective from April 1, 1989, and as such the assessee was not entitled to any exemption for the assessments from 1985 to 1989. He, however, revised the valuation of various properties. The Tribunal also held that the amendment by the Finance Act, 1988, removing the levy of wealth-tax on stock-in-trade being in the realm of substantive law, does not have a retrospective operation. The Tribunal accordingly directed the Assessing Officer to value the properties as per Schedule III to the Wealth-tax Act, 1957.

Question No. 1

This question h