Holding

The default under section 18(1)(a) is not a continuing offence; penalty must be computed according to the law in force on the last day the return was due, and the 1964 and 1969 amendments are not retrospective.

Summary

The Commissioner of Wealth Tax, Amritsar appealed against a High Court order that had ruled in favour of Suresh Seth, who had filed his wealth‑tax returns for 1964‑65 and 1965‑66 years several years late. The department had levied penalties under section 18(1)(a) of the Wealth Tax Act, applying different rates for periods before and after the 1964 and 1969 amendments, treating the failure to file as a "continuing offence". The Supreme Court examined whether the omission to file a return constitutes a continuing offence and whether the penalty must be computed according to the law in force on the last day the return was due. It held that the default is a single act occurring on the due date, not a continuing offence, and that penalties must be calculated based on the law applicable on that due date; the 1964 and 1969 amendments have no retrospective effect. Consequently, the appeals were dismissed.

Issues considered

Whether the omission to file wealth‑tax returns under section 18(1)(a) of the Wealth Tax Act is a continuing offence.
Whether the penalties levied for the assessment years 1964‑65 and 1965‑66 should be computed using the amendment provisions of 1964 and 1969 or only the law in force on the last day the returns were due.

Legislation cited

Subjects

Wealth TaxPenaltySection 18Continuing offenceRetrospective amendmentGeneral Clauses ActTax defaultSpecial Leave Petition

Judgment

419

A

COMMISSIONER OF WEALTH TAX, AMRITSAR
v. B
SURESH SETH

April 7, 1981

[ R.S. PATHAK AND E.S. VENKATARAMIAH, JJ.]

Wealth Tax Act, 1957-Scope of section 18(1) (a) of the Act-Whether the
c
offenre relating to the omission to file the Wealth Tax Returns was a continuing
offence--Penalty has to be computed in accordance with the law in force on the
last day on which the return in question has to be filed-The 1964 and 1969 Amend-
) ments to the Wealth Tax Act has no retrospective effect.

The assessee-respondent filed his Wealth Tax returns for the assessment
years 1964-65 and 1965-66 on March 18, 1971, while he was required by section D
14(1) of the Act to file the return for the assessment year 1964-65 on or before
June 30, 1964 and the return for the assessment year 1965-66 on or before June
30, 1965. The Wealth Tax Officer completed the assessment for the said years
on March 22, 1971 and also commenced proceedings for levying penalty under
section 18(1) (a) of the Act for the late submission of returns. The Wealth Tax
Officer levied the penalties for different periods at different rates, as provided by
the 1964 and 1969 Amendments, treating the failure to file the return in time as a E
"continuing offence"_ The orders levying penalties were upheld in appeal by
the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal,
Amritsar Bench, Amritsar. A consolioated reference made by the Tribunal at
the- instance of the assessee was answered by the High Court of Punjab in favour
of the assessee after rejecting the contention of the department that the default
or failure to file the return in time was a continuing default and that the penalty
had to be computed for the period prior to April I, 1965 in accordance with F
section 18 as it stood prior to its amendment by the Wealtli-tax (Amendment)
Act, 1964, for the period between April 1, 1965 to March 31, 1969 in accordance
with section 18 of the Act as amended by the Wealth-tax (Amendment) Act,
1964 and for the period between April I, 1969 to March 18, 1971 (on which date
the returns were filed) in accordance with section 18 of the Act as amended by
the Finance Act, 1969. Aggrieved by the decision of the High Court, the
Department has filed these appeals under Article 136 of the Constitution. G
Dismissing the appeals, the Court

HELD 1:1. Where the default complained of is one falling under section
18(1) (a) of the Wealth Tax A~t, the penalty has to be computed in accordance
with the law in force on the last day on which the return in question had to be H
filed. Neither the amedment made in 1964 nor the amendment made in 1969 has
retrospective effect. [434 C-D)
420 SUPREME COURT REPORTS (1981] 3 S.C.R.

A 1:2. Section 18 of the Wealth Tax Act does not require the assessee to file
a return during every month after the last day to file it is over. Non-performance
of any of the acts mentioned in section 18(1) (a) of the Act gives rise to a single
default and to a single penalty, the measure of which, however, is geared up to
the time lag between the last date on which the return has to be filed and the
dak on which it is filed. The default, if any committed is committed-on the
last date allowed to fil~ the return. The default cannot be one committed every
B month thereafter. [433 G-H, 434 A]

l :3. The words "for every month during which tt>e default continued" indi-
cate only the multiplier to be adopted in determining the quantum of penalty and
do not have the effect of making the default in question a continuing one. Nor
do they make the amended provisions modifying the penalty applicable to earlier
defaults in the absence of necessary provisions in the amending Acts; The princi-
c ple underlying section 6 of the General Clauses Act is clearly applicable to
these cases. [434 B-C]

2:1. A liability in law ordinarily arises out of an act of commission or an
act of omission. When a person does an act which Jaw prohibits him
from doing it and attaches a penalty for doing it, he is stated to have
committed an act of commission which amounts to a wrong in the eye
D of Jaw. Similarly when a person omits to do an act which is required by
law to be performed by him and attaches a penalty for such omission, he is
said to have committed an act of omission which is also a wrong in the
eye of law. Ordinarily a wrongful act or failure to perform an act required by
law to be done becomes a completed act of commission or of omission, as the
case may be, as soon as the wrongful act is committed in the former case and
when the time prescribed by law to perform an act expires in the latter case and
E the liability arising thereform gets fastened as soon as the act of commission or
of omission is completed. The extent of that liability is ordinarily measured
according to the law in force at the time of such completion. In the case of acts
amounting to crimes the punishment to be imposed cannot be enhanced at all
under our Constitution by any subsequent legislation by reason of Article 20(1)
of the Constitution which declares that no person shall be subjected to a penalty
greater than that which might have been inflicted under the law in force at the
F time of the comission of the offence. In other cases, however, even though the
liability may be enhanced it can only be a subsequent law (of course subject to
the Constitution) which either by express words or by necessary implication pro-
vides for such enhancement. (429 G-H, 430 A-DJ

2:2. The distinctive nature of a continuing wrong is that the law that is
violated makes the wrongdoer continuously liable for penalty. A wrong or
G default which is complete but whose effect may continue to be felt even after its
completion is, however, not a continuing wrong or default. [430 D-E]

2:3. The court should not be eager to hold that an act or omission is a
continuing wrong or default unless there are words in the statute concerned which
H make out that such was the intention of the legislature. In the instant case when-
ever the question of levying penalty arises what has to be first considered is
whether the assessee has failed without reasonable cause to file the return as re-
C.W.T. v. SURESH SETH (Venkataramiah, J.) 421

quired by law and if it is held that he has failed to do so then penalty has to be A
levied in accordance with the measure provided in the Act. When the default is
the filing of a delayed return the penalty may be correlated to the time lag
between the last day for filing it without penalty and the day on which it is filed
and the quantum of tax or wealth involved in the ;case for purposes of determin-
ing the quantum of penalty but the default however is only one which takes
place on the expiry of the last day for filing the return without penalty and not a
continuing one. The default in question does not, however, give rise to a fresh B
cause of action every day. [430 E-Hl

2:4. Where the wrong complained of is the omission to perform a positive
duty requiring a person to do a certain a;t the test to determine whether such a
wrong is a continuing one is whether the duty in question is one which requires
him to continue to do that act. Breach of a covenant to keep the premises in
good repair, breach of a continuing guarante~, obstruction to a right of way, c
obstruction to the right of a person to the unobstructed flow of water, refusal by
a man to maintain his wife and children whom he is bound to maintain under
law and the carrying on of mining operations or the running of a factory without
complying with the m~asures intended for the safety and well-being of workmen
may be illustrations of continuing breaches or wrongs giving rise to civil or
criminal liability, as the case may be, de die in diem. [433 A-D]
D
Hole v. Chard Union, [1894] l Ch. D. 293, quoted with approval.

State v. A. Bhiwandiwalla, A. I. R. 1955 Born. 161 ; The State v. Kunja
Behari Chandra and Ors. A. I. R. 1954 Patna 37 J, approved,

Balkrishna Sava/ram Pujari and Ors. v. Shree D:iyaneshwar Maharaj Sansthan
and Ors,, [1959] Supp. 2 S;C.R. 476, referred to. E
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos; 768-769
of 1978.

Appeals by Special Leave from the Judgment and Order dated
28.1.1977 of the Punjab and Haryana High Court in Income Tax F
Reference No. 29 of 1975.

B. B. Ahuja and Miss A. Subhashini for the Appellant.

G. C. Sharma, E. D. Helms, R. S. Sh[lrma and K. B. Rohtagi
for the Respondent. G
The Judgment of the Court was delivered by

VENKATARAMIAH, J. The Commissioner of Wealth Tax,
Amritsar has filed the above appeals by special leave against the H
ljudgment of the High Court of Punjab and Haryana in a reference
made under section 27(1) of the Wealth-tax Act, 1957 (hereinafter
422 SUPREME COURT REPORTS (1981) 3 S.C.R

A referred to as 'the Act') answering in favour of the assessee the
following two questions :

"I. Whether, on the facts and in the circumstances
of the case, the Tribunal was right in law in holding that
the offence relating to the omission to file the Wealth-
B tax returns was a continuing offence ?

2. Whether, on the facts and in the circumstances of the
case, the Tribunal was right in law upholding the penalties
of Rs. 5382/- and Rs. 7759/- levied by the department on
the assessee under section 18(l)(a) of the Wealth-tax Act,
C 1957, for the assessment years 1964-65 and 1965-66 respec-
tively ?"

The assessee, the respondent in these appeals filed his wealth-
tax returns for the assessment years 1964-65 and 1965-66 on March
18, 1971 while he was required by section 14(1) of the Act to file the
D return for the assessment year 1964-65 on or before June 30, 1964
and the return for the assessment year 1965-66 on or before June 30,
1965. The Wealth-tax Officer completed the assessments for the afore-
mentioned years on March 22, 1971 determining the total wealth at
Rs. 1,45,800/- for the assessment year 1964-65 as against the declar-
ed wealth of Rs. 1,38,550/- and at Rs. 1,65,200/- for the assessment
E year 1965-66 as against the declared wealth of Rs. l ,59,127/- and
also commenced proceedings for the levying penalty under section
18(1)(a) of the Act for late submission of returns. Ultimately the
penalties were levied as follows :

"Assessment year 1964-65 :
F
(i) For the period from 1.7.64 to 31.3.69:
Penalty at 2% p.m. subject to maximum
of 50% of the wealth-tax payable under
section 18(1)(a) before its amendments on
1.4.69 by the Finance Act, 1969: Rs. 115/-
G
(ii) For the period from 1.4.69 to 18.3:71
Penalty at l /2 % of the net wealth for each
month of the default under section l 8(l)(a}
H as amended by the Finance Act, 1969 : Rs. 5,267/-

Rs. 5,382/-
C.W.T. v. SURESH SETH (Venkataramiah, J.) 423

Assessment year 1965-66 : A
(i) For the period from I. 7.65 to 30.3.69
Penalty at 2% p.m. subject to maximum of
50% of the wealth-tax payable under sec-
tion 18 (I )(a) before its amendment on
J.4.69 by the Finance Act, 1969 : Rs. 163/- B
(ii) For the period from 1.4.69 to 18.3.71
Penalty at I/2% of the net wealth for each
month of default under section 8(1 )(a) as
amended on 1.4.69 by the Finance Act, c
1969: Rs. 7,596/-

Rs. 7,759/-

The above orders levying penalties were upheld in appeal by
the Appellate Assistant Commissioner an.d the Income-tax Appellate
Tribunal, Amritsar Bench, Amritsar. At the instance of the assessee D
a consolidated reference was made by the Income-tax Appellate
Tribunal to the High Court referring the above two questions for
its opinion. The High Court answered the said questions in favour
of the assessee after rejecting the contention of the department that
the default or failure to file the return in time was a continuing default
and that the penalty had to be computed for the period prior to E
April l, 1965 in accordance with section 18 as it stood prior to
its amendment by the Wealth-tax (Amendment) Act, 1964, for the
period between April I, 1965 to March 31, I 969 in accordance with
section 18 of the Act as amended by the Wealth-tax <Amendment)
Act, 1964 and for the period between Aprill, 1969 to March J8,
1971 (on which date the returns were filed) in accordance with F
sec. 18 of the Act as amended by the Finance Act, 1966. Aggrieved
by the decision of the High Court, the Department has filed these
appeals under Article 136 of the Constitution.

Before dealing with the contentions of the parties, it is appro-
. G
priate to set out the provisions of the Act which have a bearing on
the question involved in the present appeals as they stood during
the relevant periods :

Prior to April 1, 1965, sub-sections (1) and (3) of section 14 . ff
of the Act stood as follows :-
424 SUPREME COURT REPORTS (1981] 3 S.C.R.

A "14. Return of wealth-(1) Every person whose net
wealth on the valuation date was of such amount as to
render him liable to wealth-tax under this Act shall, before
the thirtieth day of June of the corresponding assessment
year, furnish to the Wealth-tax Officer a return in the pres-
cribed form and verified in the prescribed manner setting
B forth his net wealth as on the valuation date;

(2) ................. .

(3) The Wealth-tax Officer may, if he is satisfied that
it is necessary so to do, extend the date for the delivery of
c return under this section."

Afur April I, 1965:

"14. (l) Every person, if his net wealth or the net
wealth of any other person in respect of which he is assess-
able under this Act on the valuation date was of such an
D
amount as to render him liable to wealth-tax under this Act,
shall, before the thirtieth day of June of the corresponding
assessment year, furnish to the Wealth-tax Officer a return
in the prescribed form and verified in the prescribed manner
setting forth the net wealth as on the valuation date.
E (2) ............. ..

(3) The Wealth-tax Officer may, if he is rntisfied that it
is necessary so to do, extend the date for the delivery of the
return under this section .." ' ,,r·

F Section 15 of the Act which has not undergone any change
since the commencement of the Act reads :

"15. Return after due date and amendment of return-
If any person has not furnished a return within the time
allowed under section 14 or having furnished a return under
G that section discovers any omission or a wrong statement
therein, he may furnish a return or a revised return, as the
case may be, at any time before the assessment is made."

The relevant parts of section 18 of the Act as they stood
H duri~g the three periods referred to above read as follows :-
C.W.T. v. SURESH SETH (Venkataramiah, J.) 425

Prior to April 1, 1965 'A

"18. (I) If the Wealth-tax Officer, Appellate Assistant
Commissioner, Commissioner or Appellate Tribunal in the
course of any proceedings under this Act is satisfied that
any person-
B
(a) has without reasonable cause failed to furnish the
return of his net wealth which he is required to furnish
under sub-section (I) or sub-section. (2) of section 14 or
section 17 or has without reasonable cause failed to
furnish it within the time allowed and in the manner
required; or c
(b)

(c)

he or it may, by order in writing, direct that such person D
shall pay by way of penalty-

(i) in the case referred to in clause (a), in addition to the
amount of wealth-tax payable by him, a sum not ex-
ceeding one and a half times the amount of such tax,
and ......... "
E
Between April 1, 1965 and March 31, 1969

"18. (I) If the Wealth-tax Officer, Appellate Assistant
Commissioner, Commissioner or Appellate Tribunal in the
course of any proceedings under this Act is satisfied that
any person- F
(a) has without reasonable cause failed to furnish the
return of his net wealth which he is required to furnish
under sub-section (a) of section 14 or by notice given
under sub-section (2) of section 14 or section 17 or has
without reasonable cause failed to furnish it within the G
time allowed and in the manner required by sub-sec-
tion (!) of section 14 or by such notice, as the case
may be; or

(b) ................. . H
(c) ................ ..
426 SUPREME COURT REPORTS [1981) 3 S.C.R.

A he or it may, by order in writing, direct that such person
shall pay by way of penalty-

(i) in the cases referred to in clause (a), in addition to the
amount of wealth-tar, if any, payable by him, a sum
equal to two per cent of the tax for every month during
B which the default continued, but not exceeding in the
aggregate fifty per cent of the tax; ........ .

Afier April 1, 1969 and as on March 18, 1971 on whilh
date the returns were flied.

c "18. (I) If the Wealth-tax Officer, Appellate Assis-
tant Commissioner, Commissioner or Appellate Tribunal in
the course of any proceedings under this Act is satisfied
that any person-

(a) has without reasonable cause failed to furnish the
return which he is required to furnish under sub-section
n (I) of section 14 or by notice given under sub-section
(2) of section 14 or section 17, or has without reason-
able cause failed to furnish within the time allowed
and in the manner required by sub-section (I) of section
14 or by such notice, as the case may be; or

E (b)

(c) .................... .

he or it may, by order in writing, direct that such person
shall pay by way of penalty-

(i) in the cases referred to in clause (a), in addition to the
amount of wealth-tax, if any, payable by him, a sum,
for every month during which the default continued,
equal to one-half per cent of-

(A) the net wealth assessed under section 16, as reduced by
the amount of net wealth on which in accordance with
the rates of wealth tax specified in Paragraph A of Part
I of the Schedule or Part II of the Schedule, the
wealth-tax chargeable is nill; or
(B) the net wealth assessed under section 17, where assess·
H
ment has been made under that section, as reduced
by-
C.W.T. v. SURESH SETH (Venkataramiah, J.) 427

(I) the net wealth, if any, assessed previously under sec- A
tion 16 or section 17 or

(2) the amount of net wealth on which in accordance with
the rates of wealth-tax specified in Paragraph A of Part
I of the Schedule or Part II of the Schedule, the wealth-
tax chargeable is nil, B
whichever is greater, but not exceeding, in the aggre-
gate, an amount equal to the net wealth assessed under
section 16, or, as the case may be, the net wealth
assessed under section 17, as reduced in either case in
the manner aforesaid; ............ "
c
Now let us analyse the above provisions of law. Section 14
of the Act which has not undergone any material change from the
commencement of the Act in so far as the question involved in these
appeals is concerned requires a person the value of whose
wealth is such as would attract the liability to pay tax to file a return
of his wealth as on the valuation date in the prescribed manner D
before the Wealth-tax Officer on or before the thirtieth of June of the
assessment year or on or before any date upto which the Wealth-tax
Officer has extended the time to file the return. Section i 5 of the
Act, however, enables such a person to file a return at any time
before the assessment is made. The distinction between section 14
and section 15 of the Act lies in the fact that whereas under section E
14 a duty is imposed on the assessee to file a return within the
prescribed date, section 15 enables him to file a return before the
assessment is made even though the last date prescribed by section
14(1) is over. Section 18 of the Act deals with three types of penal-
ties for certain specified acts or omissions on the part of the assessee
referred to in clauses (a), (b) and (c) of sub-section (I) thereof. F
We are concerned in this case with the question of levy of penalty
in respect of omissions referred to in clause (a) of section 18(1) of
the Act. There are four kinds of omissions referred to in that
clause-(i) failure to furnish the return which the assessee is required
to furnish under sub-section (i) of section 14; (ii) failure to furnish
the return as required by a notice issued under section 14(2) or sec- G
tion 17, (iii) failure to furnish the return as required by section 14(1)
within the time allowed and in the prescribed manner and (iv) failure
to furnish the return as required by a notice issued under section
14(2) or section 17 within the time allowed and in the prescribed
manner. Each one of these omissions expose the assessee to the
H
\evy of penalty unless reasonable cause is shown for not performing
428 SUPREME COURT REPORTS (1981] 3 S.C.R.

A the duty. In clause (i) of section 18(1) of the Act, the penalty
leviable for any of the omissions referred to in section 18(l)(a) is
set out but the measure of penalty imposable has varied from time
to time. Prior to April 1, 1965 the penalty imposable was a sum
~'iTot exceeding one and a half times the amount of wealth tax payable
by the assessee during the assessment year in question. Within the
B outer limit referred to above, the officer concerned or the Tribunal
as the case may be could impose any amount as penalty having
regard to all the relevant circumstances of the case including perhaps
the time that had elapsed from the last day allowed to file the return.
Between April J, 1965 and March 31, 1969 the measure of penalty
was regulated by section J 8 of the Act as amended in 1964. During
c that period the penalty imposable was a sum equivalent to two per
cent of the tax for every month during which the default continued
but not exceeding in the aggregate fifty per cent of the tax. The
penalty leviable during this period was less onerous than it was
before April l, 1965. Then came the amendment made by the
Finance Act of 1969. After April l, 1969 by_ reason of the amend-
D ment introduced by the Finance Act of 1969 the penalty imposable
was altered to a sum for every month during which the default
continued equal to.one-half per cent of the net wealth calculated
in accordance with the amended provisions in section 18. The penalty
leviable during this period was more drastic than what it was before.
One significant difference between the law as it existed prior to
April I, 1965 and the law as it existed during the subsequent l\yo
periods is that whereas during the period prior to April I, 1965 there
was no specific reference in clause (i) of section 18 (a) to the time
lag between the last date on which the return had to be filed and
the date on which it was actually filed, the said factor was ex-
pressly required to be taken into consideration after April I, 1965
F while determining the penalty payable by the assessee. Another
ii.gnificant factor which requires to be borne in mind is that neither
the Wealth-tax (Amendment) Act, 1964 nor the Finance Act, 1969
by which section 18 of the Act was amended expressly stated that
the amended provisions of section 18 would be applicable to an
assessee who had failed to file the return in respect of any preceding
G assessment year and the said default had continued after the amend-
ment came into force except using the phrase "for every month
during which the default continued", in that part of section 18 which
prescribed the measure of penalty.
H
The contention of the Department is that whatever may have
been the position of law before April I, 1965, on and after that date
C.W.T. v. SURESH SETH (Venkataramiah, J.) 429

the default committed by an assessee in not filing a return as re- A
quired by section 14(1) of the Act amounted to a continuing wrong
which attracted the penalty as provided by the law in force at the
time when such default continued. In other words it is contended that
in this case since the assessee who had to file a return after April I,
1965 for assessment year 1965-66 had not filed the same till March 13,
1971 penalty had to be computed for the period upto April 1, 1969 B
under the provisions of section 18 of the Act as it stood during that
period and for the subsequent period additional penalty should be
levied in accordance with section 18 as amended by the Finance Act,
1969. Relying upon the decision of the Kerala High Court in
Commissioner of Wealth-tax, Kera/a v. Smt. V. Pathummabi(') it is
argued that amendments made in 1964 and 1969 brought about a c
qualitative change in the nature of the default contemplated under
section 18 and that what could have been a completed default before
Aprill, 1965 became a continuing default. Even assuming that
this argument is correct it has to be held that the decision of the
High Court in so far as the default committed by the assessee in not
filing the return in respect of the assessment year 1964-65 is con-
D
cerned is not erroneous. What remains to be considered is whether
the decision in respect of the default committed by the assessee in
not filing the return due on June 30, 1965 for the assessment year
1965-66 is liable to be interfered with.

To repeat, the relevant part of section 18 of the Act can be
E
divided into two parts-the first part contained in clause (a) of
section 18(1) setting out the gist of the default and the second part
prescribing the measure of penalty. The former part has more or
less remained the same from the commencement of the Act and it is
only the latter part which has undergone changes. The question is
F
whether by reason of the changes in the latter part, there has been
a change in the nature of the wrong referred to in section 18 (I) (a)•·
of the Act.

A liability in law ordinarily arises out of an act of com-
-y mission or an act of omission. When a person does an act which Jaw G
pro hi bits him from doing it and attaches a penalty for doing
it, he is stated to have committed an act of commission which
amounts to a wrong in the eye of law. Similarly when a person
omits to do an act which is required by law to be performed
by him and attaches a penalty for such omission, he is said to have H
(I) 108 J.T.R. 689.
430 SUPREME COURT REPORTS [1981] 3 S.C.R

A committed an act of omission which is also a wrong in the eye of
law. Ordinarily a wrongful act or failure to perform an act re-
quired by law to be done becomes a completed act of commission or
omission, as the case may be, as soon as the wrongful act is
committed in the former case and when the time prescribed by law to
perform an act expires in the latter case and the liability arising
B therefrom gets fastened as soon as the act of commission or of
omission is completed. The extent of that liability is ordinarily
measured according to the Jaw in force at the time of such comple-
tion. In the case of acts amounting to crimes the punishment to be
imposed cannot be enhanced at all under our Constitution by any
subsequent legislation by reason of Article 20 (I) of the Constitution
c which declares that no person shall be subjected to a penalty greater
than that which might have been inflicted under the law in force at
the time of the commission of the offence. In other cases, however,
even though the liability may be enhanced it can only be done by a
subsequent Jaw (of course subject to the Constitution) which either
by express words or by necessary implication provides for such
D enhancement. In the instant case the contention is that the wrong
or the default in question has been altered into a continuing wrong
or default giving rise to a liability de die in diem, that is, from day
to day. The distinctive nature of a continuing wrong is that the
law that is violated makes the wrong doer continuously liable for
penalty. A wrong or default which is complete but whose effect
E may continue to be felt even after its completion is, however, not a
continuing wrong or default. It is reasonable to take the view that
the court should not be eager to hold that an act or omission is a
continuing wrong or default unless there are words in the statute
concerned which make out that such was the intention of the legis-
lature. In the instant case whenever the question of levying penalty
F arises what has to be first considered is whether the assessee has
jailed without reasonable cause to file the return as required by law
and if it is held that he has failed to do so then penalty has to be
levied in accordance with the measure provided in the Act. When
the default is the filing of a delayed return the penalty may be
correlated to the time Jag between the last day for filing it without
G penalty and the day on which it is filed aPd the quantum of tax or
wealth involved in the case for purposes of determining the quantum
of penalty but the default however is only one which takes place on
the expiry of the last day for filing the return without penalty and
not a continuing one. The default in question does not, however, give
H rise to a fresh cause of action every day. Explaining the expression
C.W.T. v. SURESH SETH (Venkataramiah, J.) 431

'a continuing cause of action' Lord Lindley in Hole v. Chard Union(1) A
observed :

"What is a continuing cause of action ? Speaking
accurately, there is no such thing; but what is called a
continuing cause of action is a cause of action which arises
from the repetition of acts or omissions of the same kind B
as that for which the action was brought."

In the same decision, Lord Justice A. L. Smith who concurred
with the above view said :
"If once a cause of action arises, and the acts com-
plained of are continuously repeated, the cause of action c
continues and goes on de die in diem. It seems to me that
there was a connection in the present case between the series
of acts before and after the action was brought; they were re-
peated in succession, and became a continuing cause of action.
They were an assertion of the same claim-namely, a claim D
to continue to pour sewage into the stream-and a conti-
nuance of the same alleged right. In my opinion, there
was here a continuing cause of action within the meaning
of the rule."

The distinction between a continuing offence and an offence E
which is not a continuing one is well brought out in the decision of
the High Court of Bombay in State v. A. H. Bhiwandiwalla('). In
that case,' the accused-respondent had been charged with two
offences namely, (a) failure to apply for registration of his factory
and to give notice of occupation and (b) running the factory without
a licence issued under the Factories Act, 1948. The accused had F

"··· a plea of limitation against the prosecution. In that context the
High Court observed : ·

"In civil law, we often refer to a continuing or re-
curring cause of action. Similarly, even in criminal law
the expression· "continuing offence"is frequently used. As G
observed by Beaumount C. J. in-'Emperor v. Chhotalal
Amarchand', AIR 1937 Born 1 (FB) the expression "conti-
nuing offence" is not a very happy expression. It assumes,
says the learned Chief Justice-

(!) [1894] 1 Ch.D. 293. H
(2) A.I.R. 1955 Born. 161.
,
432 SUPREME COURT REPORTS (1981] 3 S.C.R.
-
A " ...... that you can have a continuing offence in the
sense in which you can have a continuing tort, or a
continuing breach of contract, and I doubt, myself
whether the assumption is well founded, having regard
to the provisions of the_ Criminal Procedure Code as
to the framing of charges and as to the charges which
B can be tried at one and the same trial. It is quite
clear that you could not charge a man with committing
an offence 'de die in diem' over a substantial period."

Even so, this expression has acquired a well-recognised
meaning in criminal law. If an act committed by an
c accused person constitutes an offence and if that act conti-
nues from day to day, then from day to day a fresh offence
is committed by the accused so long as the act continues.
Normally and in the ordinary course an offence is com-
mitted only once. But we may have offences which can be
committed from day to day and it is offences falling in this
D latter category that are described as continuing offences."

Accordingly the High Court of Bombay held in Bhiwandi-
wa/la' s case (supra) that the failure to apply for registration of the
factory under the Factories Act and to give notice of occupation
thereof was not a continuing offence but the running of the factory
E without a licence issued thereunder was a continuing offence.

Section 39 of the Indian Mines Act, 1923 which came up for
consideration before the Patna High Court in The State v. Kunja
Behari Chandra & Ors.(1) on which reliance was placed by the
Revenue is a case of continuing offence. Section 39 provided :
F
"39. Whoever contravenes any provision of this Act
or of any regulation, rule or bye-law or of any order made
thereunder for the contravention of which no penalty is
hereinafter provided shall be punishable with fine which
may extend to one thousand rupees, and in the case of a
G continuing contravention, with a further fine which may
extend to one hundred rupees for every day on which the
offender is proved to have persisted in the contravention
after the date of the first conviction."

H (1) A.I.R. 1954 Patna 371.
c. w. T. v. SURESH SETH (Venkataramiah, J.) 433

In this case the 111nguage of the section itself made it obvious A
tllat its violation resulted in a continuing offence.
y- The true principle appears to be that where the wrong com-
plained of is the omission to perform a positive duty requiring a
person to do a certain act the test to determine whether such a
wrong is a continuing one is whether the duty in question is one B
which requires him to continue to do that act. Breacl1 of a cove-
nant to keep the permises in good repair, breach of a continuing
guarantee, obstruction to a right of the way, obstruction to the right
of a person to the unobstructed flow of water, refusal by a man
to maintain his wife and children whom he is bound to maintain
under law and the carrying on of mining operations or the running of c
a factory without complying with the measures intended for the
safety and well-being of workmen may be illustrations of conti-
nuing breaches or wrongs giving rise to civil or criminal liability.
as the case my be, de die in diem.

In Balkrishna Sava/arm Pujari & Ors. v. Shree Dayaneshwar D
Mcharrj Sansth::m & Ors.( 1) Gajendragadkar, J. (as he then was)
observed

"It is the very essence of a continuing wrong that it
is an act which creates a continuing source of injury and
renders the doer of the act responsible and liable for the E
continuance of the said injury. If the wrongful act causes
an injury which is complete, there is no continuing wrong
even though the clamage resulting from the act may con-
tinue. If, however, a wrongful act is of such a character
that the injury caused by it itself continue, then the act
constitntes a continuing wrong. In this connection it is F
necessery to draw a distinction between the injury caused
by the wrongful act and what may be described at the effect
of the said injury."

Section 18 of the Act with which we are concerned in this
case, however, does not require the assessee to file a return during G
every month after the last day to file it is over. Non-performance
of any of the acts mentioned in section 18(J)(a) of Act gives rise
to a single default and to a single penalty, the measure of which,

(l) (1959] Supp. 2 S.C.R. 476. H
434 SUPREME COURT REPORTS [I 981] 3 S.C.R.

A however, is geared up to the time lag between the last date on which
the return has to be filed and the date on which it is filed. The
default, if any committed is committed on the last date allowed to
file the return. The default cannot be one committed every month
thereafter. The words 'for every month during which the default
8 continued' indicate only the multiplier to be adopted in determi-
ning the quantum of penalty and do not have the effect of
making the default in question a continuing one. Nor do they
make the amended provisions modifying the penalty applicable to
earlier defaults in the absence of necessary provisions in the amen-
ding Acts. The principle underlying section 6 of the General
c Clauses Act is clearly applicable to these cases. It may be stated
here that the majority of the High Courts in India have also taken
the same view.

In the result we hold that where the default complained
of is one falling under section 18(1 )(a) of the Act, the penalty has
D to be computed in accordance with the law in force on the last day
on which the return in question had to be filed. Neither the amend-
ment made in 1964 nor the amendment made in 1969 has retros-
pective effect.

The appeals therefore fail and are dismissed with costs.
E
Hearing fee one set.

S. R. Appeals dismissed.

'
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