VATAP-264-2018 (O&M) -1-

IN THE HIGH COURT OF PUNJAB & HARYANA

AT CHANDIGARH

VATAP-264-2018 (O&M)

Date of decision : 18.07.2025

Excise and Taxation Commissioner, Haryana ......Appellant

Vs.

M/s Gobind Ram Narain Dass and another ......Respondents

CORAM: HON’BLE MRS. JUSTICE LISA GILL

HON’BLE MRS. JUSTICE SUDEEPTI SHARMA

Present:Ms. Mamta Singla Talwar, Advocate,

for the appellant.

Mr. Sandeep Goyal, Advocate,

for the respondents.

*****

SUDEEPTI SHARMA, J.

1. Present Appeal under Section 36 of the Haryana Value Added

Tax Act, 2003, is preferred against order dated 03.07.2017 passed by learned

Haryana Tax Tribunal in STA No.34 of 2014-15, which was filed by M/s

Gobind Ram Narain Dass, Hisar-respondent No.1.

FACTS NOT IN DISPUTE

2. Brief facts of the case are that assessment of respondent No.1

for the financial year 1996-97 was framed by the Excise and Taxation

Officer-cum-Assessing Authority, Hisar, vide order dated 29.03.2005 under

the Haryana General Sales Tax Act, 1973 (for short, ‘HGST Act’), whereby

an additional demand of Rs.12,25,914/- was raised on account of levy of

purchase tax on cotton purchased from within the State of Haryana without

payment of tax on the strength of registration certificate. Respondent No.1

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deposited the said amount on 27.04.2005. Aggrieved against order dated

29.03.2005 passed by the Assessing Authority, respondent No.1 filed an

appeal before the Joint Excise & Taxation Commissioner (Appeals), Rohtak,

(for short, ‘JETC’), which was dismissed vide order dated 29.11.2005 on the

ground that respondent No.1 was not entitled to exemption from payment of

purchase tax. Respondent No.1, being dissatisfied with order dated

29.11.2005 passed by JETC (Appeals), preferred an appeal before the

Haryana Tax Tribunal, which was also dismissed vide order dated

20.02.2006, holding the same view as expressed by JETC (Appeals) in its

order dated 29.11.2005 that the transactions in question did not fall under

Section 5(3) or Section 3 of the Central Sales Tax Act, 1956 (for short, ‘CST

Act’) and thus, could not be treated as inter-state sales calling for deduction

under Section 27(1)(b)(A)(ii) of the HGST Act, as inter-state sales are

deemed exports as defined under Section 3 of the CST Act covered by

Section 3. Deemed exports cannot be viewed as inter-state sales.

3. Thereafter, aggrieved of order dated 20.02.2006 passed by

learned Haryana Tax Tribunal, respondent No.1 filed a Civil Writ Petition

No.11017-2006 before this Court, which was dismissed vide judgment dated

02.04.2009 by learned Single Judge. Subsequently, Letters Patent Appeal

No.470 of 2010 was preferred against the said judgment dated 02.04.2009,

and the Division Bench of this Court, vide judgment dated 15.07.2010,

allowed the appeal and quashed the order of Assessing Authority for levying

purchase tax on cotton.

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4. Consequently, the refund of Rs.12,25,914/- was paid to

respondent No.1 vide Refund Order No.59/VAT/2011-12 dated 04.07.2011.

After receiving the refund amount of Rs.12,25,914/-, respondent No.1 filed

an application dated 11.07.2011 before the Assessing Authority, Hansi,

claiming interest under Section 20(8) of the Haryana Value Added Tax Act,

2003 (for short, ‘HVAT Act’) on the refund amount of Rs.12,25,914/- for the

period from the date of payment upto the date when refund was received by

him. However, this application was rejected by the Assessing Authority vide

order dated 08.07.2013 on the ground that the interest was claimed under the

provisions of the HVAT Act, 2003, whereas, the demand was raised under

the HGST Act, 1973, and hence, the provisions of HVAT Act were not

applicable in the present case. Thereafter, against the order dated

08.07.2013, respondent No.1 preferred an appeal before JETC (Appeals),

who remanded the case to the Assessing Authority, vide order dated

05.02.2014, with the directions to calculate interest on delayed payment for

124 days as per Section 25(5) of the HGST Act, 1973, and refund the same.

In compliance of order dated 05.02.2014 passed by JETC (Appeals), interest

of Rs.69,900/- was paid to respondent No.1, vide Refund Voucher

No.125/VAT/2014-15 dated 09.02.2015. Not satisfied with the refund

amount, respondent No.1 again approached learned Haryana Tax Tribunal by

way of filing an appeal against order dated 05.02.2014 claiming interest for

the entire period from the date of deposit till the date of refund on the basis

of Section 20(8) of the HVAT Act, 2003. Learned Haryana Tax Tribunal,

vide its order dated 03.07.2017, allowed the appeal, set aside both orders

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dated 08.07.2013 and 05.02.2014 passed by the Assessing Authority and

JETC (Appeals), respectively, and held respondent No.1 entitled to interest

on the entire refund amount from the date of deposit till the date of refund at

the rate of 1% per month under Section 20(8) of the HVAT Act. Hence, the

present appeal.

SUBMISSIONS OF LEARNED COUNSEL FOR THE PARTIES

Appellant-State

5. Learned counsel for the appellant inter alia contends that since

the demand of Rs.12,25,914/- was raised under the HGST Act and the refund

was also allowed under the same Act, the interest on such refund must be

payable in accordance with the provisions of Section 43(2) read with Rule

35(1)(b) of the HGST Act. She further contends that statutory provisions

have to be applied in toto and not in a piecemeal manner i.e for demand and

refund HGST Act and for interest HVAT Act. Furthermore, she contends

that interest cannot be granted on the basis of equity under the tax

enactment.

6. In support of her contentions, she relies upon the judgment

passed by this Court in Khazan Chand Nathi Ram Vs. State of Haryana,

2004 (136) STC, 261 , which was rendered at the time when there was

transition from HGST Act, 1973 to HVAT Act, 2003, wherein this Court by

referring to right to appeal observed that condition of pre-deposit for filing

an appeal for the Assessment Year under the HGST Act, would be

determined under the provisions of HGST Act and not under the HVAT Act.

This Court observed that under the HGST Act lis can be said to commence

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when the returns are filed or are required to be filed and that the right to

appeal is a substantive right governed by the provisions of law as it existed

when the lis commenced.

7. She, therefore, contends that the proposition of law as laid down

by this Court in Khazan Chand Nathi Ram’s case (supra) would apply in

the present case as well and that provisions relating to demand, refund and

interest being substantive in nature, must be governed by the HGST Act

even though the assessment order was passed after the HVAT Act came into

force in the year 2003. She further contends that the assessment order for

the Assessment Year 1996-97 was passed on 29.03.2005 under the HGST

Act, 1973, despite the fact that the HVAT Act, 2003, came into force by that

time. And that Section 61 of the HVAT Act contains the ‘Repeal and Saving’

provisions, the interpretation of which provides that for the assessment year

under the HGST Act, provisions of the HGST Act have to be applied for

substantive part and for procedural part such as limitation etc., the HVAT Act

has to be applied. Therefore, assessment order for the assessment year in

question i.e. 1996-97, though passed on 29.03.2005 i.e. after coming into

force of HVAT Act was passed under HGST Act and the provisions of HGST

Act were correctly applied for assessment. She therefore, contends that

learned Tribunal has erred in not appreciating settled law and the statutory

provisions of law and prays that the present appeal be allowed.

Respondent No.1

8. Per contra, learned counsel for respondent No.1 submits that

additional demand in question was created after coming in force of the

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HVAT Act and after repeal of HGST Act with effect from 01.04.2003.

Therefore, in view of Section 61(1) of the HVAT Act, assessment order dated

29.03.2005 shall be deemed to have been passed under the HVAT Act and

not under the HGST Act. Consequently, provisions of the HVAT Act and not

HGST Act would be applicable in the present case. He relies upon judgment

passed by the Division Bench of this Court in CWP-16213-2014 titled as

‘Haryana Vanaspati & General Mill Vs. The State of Haryana and

another’ decided on 07.08.2015. He further contends that the SLP(C)

No.7574 of 2016 filed by the State of Haryana against the said judgment

dated 07.08.2015 was also dismissed vide order dated 10.09.2024. He,

therefore, prays that the present appeal be allowed.

9. We have heard learned counsel for the parties and perused the

file with their able assistance.

10. While admitting the present appeal, this Court vide order dated

20.05.2024 framed the following questions of law for consideration: -

“(d)Whether the Hon’ble Haryana Tax Tribunal is justified in

allowing the interest on the delayed payment from the date of

deposit and not from the date of order in contravention of the

provisions of Section 43 and Rule 35(1)(b) of HGST Act, 1973.

(e)Whether the Hon’ble Haryana Tax Tribunal is justified in

not appreciating the provisions of Section 43 of the HGST Act,

1973.”

11. A perusal of the assessment order dated 29.03.2005 shows that

it is passed under the HGST Act, 1973. Admittedly, the assessment order in

the present case for the Assessment Year 1996-97 was passed on 29.03.2005,

whereby, additional tax demand of Rs.12,25,914/- was created. The said

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amount was deposited by the respondent on 27.04.2005. Respondent

challenged the tax demand of Rs.12,25,914 created vide order dated

29.03.2005, which was set aside by this Court in LPA-470-2010 arising out

of CWP-11017-2006.

12. Respondent filed an application for refund of the said amount

on 03.12.2010. The Assessing Authority issued refund order to the assessee

on 05.07.2011. Thereafter, the respondent filed application for grant of

interest on the above referred to amount from the date of deposit till the date

of refund. Excise and Taxation Officer, Hansi, dismissed the said

application vide order dated 08.07.2013.

13. First appeal filed by the respondent against the said order was

partly allowed by the First Appellate Authority, Rohtak, vide order dated

05.02.2014 by holding as under:-

“….. that additional tax demand was created by Assessing

Authority under the Haryana General Sales Tax Act, 1973 (in

short, the HGST Act) and refund was also issued under the Act

ibid and, therefore, provisions of Section 20(8) of the Haryana

Value Added Tax Act, 2003 (in short, the HVAT Act) are not

applicable. It was also held that as per Section 43(2) of the

HGST Act read with Rule 35(1)(b) of the Haryana General

Sales Tax Rules, 1975 (in short, the HGST Rules) refund had to

be made within 90 days of receipt of the application for refund

failing which interest shall be payable for the delay beyond the

said period of 90 days. Accordingly, the first Appellate

Authority directed payment of interest to the assessee-appellant

for the delayed period of 124 days.”

VATAP-264-2018 (O&M) -8-

14. Feeling still aggrieved, the respondent filed second appeal

before the learned Tribunal claiming interest on the amount of

Rs.12,25,914/- for the entire period from the date of deposit by it till the date

of refund was issued to it, as per Section 20(8) of the HVAT Act.

15. Relevant portion of order dated 03.07.2017 passed by learned

Tribunal is reproduced as under: -

“5.We have carefully considered the matter. It is undisputed

that if provisions of the HGST Act and the HGST Rules are held

to be applicable to the present case, then there is no error or

infirmity in impugned order of the first Appellate Authority in

allowing interest for the delayed period 124 days only in view

Section 43(2) of the HGST Act read with rule 35(1) (b) of the

HGST Rules. Conversely, if provisions of the HAVT Act are

held to be applicable to this case, then in view of Section 20(8)

of the Act ibid, the assessee-appellant is entitled to interest for

the entire period from the date of deposit of the amount by it till

the date of refund thereof to it. In this regard, there is also

clarification issued by the State Government vide order dated

03.07.2006 under Section 56(3) of the HVAT Act on the

application of M/s Caparo Maruti Ltd., Bawal, holding that in

view Section 20(8) of the HVAT Act, interest is payable from the

date the assessee made payment till the date of refund to the

assessee. So the question to be determined is as to whether the

HGST Act and the HGST Rules are applicable or the HVAT Act

is applicable?

6.Section 61 (1) of the HVAT Act is reproduced hereunder

for ready reference:-

“61. Repeal and Saving

(1) The Haryana General Sales Tax Act, 1973 (20 of

1973), is hereby repealed:

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PROVIDED that such repeal shall not-

(a) affect the previous operation of the Act so repealed

or anything duly done or suffered thereunder; or

(b)affect any right, title, privilege, obligation or

liability acquired, accrued or incurred under the said Act;

or

(c)affect any act done or any action taken (including

any appointment, notification, notice, order, rule, form,

regulation, certificate) in the exercise of any power

conferred by or under the said Act.

and any such act done or any action taken in the exercise

of the powers conferred by or under the said Act shall be

deemed to have been done or taken in the exercise of the

powers conferred by or under this Act as if this Act was in

force on the date on which such act was done or action

taken; and all arrears of tax and other amount due at the

commencement of this Act may be recovered as if the same

had accrued under this Act.”

7.In the instant case, assessment order 29.03.2005 creating

additional demand in question was passed after coming into

force of the HVAT Act and after repeal of the HGST Act w.e.f.

01.04.2003. Consequently, in view of Section 61 (1) of the

HVAT Act, assessment order dated 29.03.2005 is deemed to

have been passed under the Act ibid and not under the HGST

Act. Consequently, provisions of the HVAT Act and not of the

HGST Act are applicable to the present case. Therefore, in view

of Section 20 (8) of the HVAT Act, assessee-appellant is entitled

to interest on the amount in question for the entire period from

the date of its deposit by the assessee till the date of its refund

to it, as claimed by the assessee in the present appeal. This view

is supported by clarificatory order dated 03.07.2006 issued by

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the State Government on the application of M/s Caparo Maruti

Ltd., Bawal.

8. For the reasons aforesaid, this appeal is allowed.

Impugned orders of both the Authorities below are set aside.

The assessee-appellant is held entitled to interest on the amount

of Rs.12,25,914/- form the date of its deposit by the assessee till

the date of its refund to the assessee @ of 1% p.m. as per

section 20 (8) of the HVAT Act. The Assessing Authority is

directed to do the needful.”

16. Before proceeding further, it would be apposite to reproduce

Section 61 (Repeal and Saving) of the HVAT Act, which is as under:-

“SECTION 61

(REPEAL AND SAVING)

(1) The Haryana General Sales Tax Act, 1973 (20 of 1973), is

hereby repealed.

Provided that such repeal shall not-

(a) affect the previous operation of the Act so repealed or

anything duly done or suffered thereunder; or

(b) affect any right, power, title, privilege, obligation or

liability acquired, accrued or incurred under the said

Act; or

(c) affect any act done or any action taken (including any

appointment, notification, notice, order, rule, form,

regulation, certificate) in the exercise of any power

conferred by or under the said Act;

and any such act done or any action taken in the exercise

of the powers conferred by or under the said Act shall be

deemed to have been done or taken in the exercise of the

powers conferred by or under this Act as if this Act were

in force on the date on which such act was done or

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action taken; and all arrears of tax and other amount

due at the commencement of this Act may be recovered

as if the same had accrued under this Act.

(2) Notwithstanding anything contained in sub-section (1), -

(a) any application, appeal, revision or other

proceedings made or preferred to any officer or authority

under the said Act and pending at the commencement of

this Act, shall, after such commencement, be transferred

to and disposed of by the officer or authority who would

have had jurisdiction to entertain such application,

appeal, revision or other proceedings under this Act as if

the said Act had been in force on the date on which such

application, appeal, revision or other proceedings were

made or preferred. Notwithstanding anything to the

contrary contained in any judgment, decree or order of

any court or other authority, where no review, revision or

corrective action could be initiated or finalized in respect

of any assessment, order, proceeding under the said Act

prior to or after 1st April, 2003, because of judgment or

decree of any court or Tribunal and the said assessment

or order passed under the said Act had attained finality,

the limitation of five years as specified under Section 40

of the said Act shall be deemed to be eight years;

(b) any security in the form of cash deposit, bank

guarantee, personal bond, surety bond or in any other

form furnished on any day before the commencement of

this Act for the payment of any tax or other dues under

the said Act, shall remain in force and may be enforced

after the commencement of this Act for the payment of

any tax or other dues under this Act and for this purpose

this Act shall be deemed to have come into force on the

day such security was furnished;

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(c) declaration in form S.T.38 in force under the said Act

and the rules made thereunder shall remain in force after

the appointed day and shall be used mutatis mutandis for

the purpose for which it was being used before the

appointed day until the State Government directs, by

notification, the discontinuance of its use after such date

as may be specified in the notification;

(d) the provisions of Section 13B and Section 25A of the

said Act and the rules (hereinafter referred to as the

‘existing rules’), framed thereunder relating to tax

concessions to industrial units shall remain in force

subject to the following exceptions, restrictions and

conditions, namely: -

(i) an industrial unit availing the benefit of

exemption from payment of tax may, in the

prescribed manner, change over to deferment of

payment of tax for the remaining period and the

remaining extent of benefit or for such period and

such extent of benefit as may be prescribed but

where an industrial unit does not choose to do so,

exemption to it from payment of tax shall cease to

take effect on and from the appointed day and

further,-

(I) it shall be liable to maintain production at

a level so that its annual turnover does not

fall short of the average annual turnover

during the period of exemption; and

(II) it shall not export out of State any goods

produced by it, for a period of next five years

or such shorter period for which it has

availed of exemption from payment of tax and

if it fails to do so, it shall be liable to pay to

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the State Government, in the prescribed

manner the amount of tax in respect of which

it has availed of exemption from payment

after reducing therefrom the tax paid by it

before such failure;

(ii) an industrial unit availing the benefit of capital

subsidy may, in the prescribed manner, change

over to deferment of payment of tax for the

remaining period and the remaining extent of

benefit but where an industrial unit does not

choose to do so, the benefit of capital subsidy to it

shall cease to take effect on and from the

appointed day;

(iii) an industrial unit availing the benefit of

deferment of payment of tax, whether by change

over under the foregoing provisions or otherwise,

may, in lieu of making payment of the deferred tax

after five years, pay half of the amount of the

deferred tax upfront along with the returns and on

making payment in this manner, the tax due

according to the returns shall be deemed to have

been paid in full; and

(iv) the tax deferred in every other case shall be

converted into interest free loan in the manner

prescribed.

Explanation - For the purpose of this clause,

“tax” includes the tax under the Act of 1973 and

the Central Act;

(e) the tax chargeable under the Act of 1973 on the sale

or purchase of duty entitlement passbook, effected on or

before 31st March, 2003, shall be calculated at the rate

of four per cent of the turnover of sale or purchase of

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such goods, as the case may be, and shall be paid

voluntarily without payment of interest on or before 31st

March, 2004, where after interest at the rate of eighteen

per cent per annum on the amount of tax due for the

period of delay shall be charged :

Provided that where a dealer has charged tax at a

rate more than four per cent, the tax shall be calculated

and payable at such rate;

(f) the tax levied under section 6 read with section 17 of

the Act of 1973 on the last purchase of paddy effected

between 1st April, 1981 and 31st March, 2003 (both days

inclusive), by a dealer liable to tax under the said Act,

shall be valid notwithstanding anything to the contrary

contained in any judgment, decree or order of any court

or other authority, any levy, assessment, re-assessment or

collection of any amount by way of tax made or

purporting to have been made in respect of purchase of

paddy effected in the said period and used in the

manufacture of rice sold in the course of export of goods

out of the territory of India within the meaning of section

5 of the Central Act and any action taken or thing done

or purporting to have been taken or done in relation to

such levy, assessment, re-assessment or collection, shall

be deemed to be as valid and effective as if such levy,

assessment, re-assessment or collection had been made

or action taken or thing done under the said Act, and

accordingly-

(i) all acts, proceedings or things done or action taken by

the State Government or by any officer of the State

Government or by any authority, in connection with the

levy, assessment, re-assessment or collection of such tax

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shall, for all purposes be deemed to be, and to have

always been, done or taken in accordance with law;

(ii) no suit or other proceedings shall be maintained or

continued in any court or before any authority for the

refund of any such tax so collected; and

(iii) no court or authority shall enforce any decree or

order directing the refund of any such tax so collected.”

17. Bare reading of Section 61 of the HVAT Act reproduced above

shows that repeal has saved the action taken under the HGST Act, which

included orders as well, and Section 61 of the HVAT Act specifically

reads/provides that any such act done or any action taken in exercise of

powers conferred by or under the HGST Act shall be deemed to have been

done or taken in exercise of power conferred by or under this Act (HVAT

Act) as if this Act was in force on the date on which such Act was done or

action taken, and all arrears of tax and other amount due at the

commencement of this Act may be recovered as if the same had accrued

under this Act. Meaning thereby that Section 61 (Repeal and Saving)

secured the revenue so that it can be recovered as per procedure laid down

under the HVAT Act.

18. Now coming to the judgment referred to by the learned counsel

for the appellant as well as respondent No.1.

19. Learned counsel for respondent No.1 has relied upon judgment

dated 07.08.2015 passed by Division Bench of this Court in CWP-16213-

2014 titled as ‘Haryana Vanaspati & General Mill Vs. The State of

Haryana and another’, which was subsequently upheld by Hon’ble the

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Supreme Court vide order dated 10.09.2024 passed in SLP(C) No.7574 of

2016, wherein the SLP(C) No.7574 of 2016 filed by the State of Haryana

was dismissed.

20. The relevant portion of judgment dated 07.08.2015 passed in

CWP-16213-2014 titled as ‘Haryana Vanaspati & General Mill Vs. The

State of Haryana and another’ by the Division Bench this Court is

reproduced as under: -

“1.The petitioner has sought a writ of mandamus directing

the respondents to pay the interest on the tax collected by them

allegedly without authority of law and a writ of certiorari

quashing an order dated 22.05.2014 (Annexure P12) passed by

the Haryana Tax Tribunal and all other orders passed by the

other authorities in so far as the petitioner’s claim has not been

allowed in full.

2 to 4XXX XXX XXX

5.The question, therefore, is whether the petitioner is

entitled to interest from the dates on which the petitioner paid

the amounts to the respondents as a condition precedent to the

maintainability of the appeal. The respondents contend that the

provisions of the HGST Act and the Rules made thereunder do

not entitle an assessee to interest in such circumstances.

6 & 7XXX XXX XXX

8.In view of Section 39(5), the petitioner was compelled to

pay the tax assessed in order to have its appeal entertained. Sub

section (1) of Section 39 provides that an appeal from every

original order including an order under Section 40 passed

under the HGST Act or the Rules shall lie to the authority

stipulated in sub clauses (a), (b) and (c) thereof. Sub section (2)

provides for a further appeal against the orders passed by

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certain authorities to the Tribunal. It is important to note that

Section 39 (5) of the HGST Act requires an assessee to pay the

amount of the tax assessed and the penalty or interest, if any,

recoverable in order to have an appeal under sub section (1)

entertained. Sub section (5) of Section 39 provides that no

appeal shall be entertained unless the appellate authority is

satisfied that the amount of tax and the penalty or interest, if

any, recoverable from the person has been paid. Thus, sub

section (5) does not merely require the assessee filing the

appeal to deposit the amount before the authority or the

Tribunal, but to pay the amount of tax, penalty and interest in

order to have his appeal entertained. The tax, penalty or

interest, if paid, is, therefore, enjoyed by the revenue. The

petitioner had admittedly paid the amounts to the authorities.

The authorities have had the benefit thereof from the date of

payment. If the appeal succeeds, the assessee is entitled to a

refund of such an amount as may be directed by the Appellate

Authority. Absent any statutory bar, there is no justification for

denying a successful assessee interest upon the amount(s) to be

refunded for the period during which the revenue had the

benefit thereof. The revenue suffers no loss thereby for it has

enjoyed the benefit of the money during this period. It has

enjoyed the benefit of the money that it was never entitled to.

9. In equity, the petitioner’s claim is established. The

question is whether the claim is barred by any provision of law.

We think not. The question also is whether interest is payable in

law. It is, in view of the judgements of this Court, binding on us.

We, therefore, need look no further while granting interest.

10 & 11XXX XXX XXX

12. We are invited to exercise our extra-ordinary jurisdiction

under Article 226 of the Constitution of India and not

jurisdiction in any other proceeding such as in a Civil Suit or

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even in arbitration proceedings. The judgements of this Court

in similar matters have upheld the right of assesses to interest

in such circumstances.

13 & 14XXX XXX XXX

15.XXX XXX XXX

In this case, the petitioner restricted his claim for interest

from the date of the assessment order under which he was

entitled to the refund. The petitioner did not claim interest from

the date of the deposit. The Division Bench granted interest for

the period claimed, but did not hold that interest is not payable

from the date of the deposit.

16 to 19XXX XXX XXX

20.That case was under the Central Excise Tariff Act, 1985.

The present matter is under the HGST Act. This case, so far as

the Central Sales Tax Act, 1956 is concerned, was only for an

amount of Rs. 44/-. Further, the draft circular referred to in the

order was not even relied upon. The order does not support the

respondents’ case.

21. In these circumstances, the petition is disposed of by

modifying the impugned order by directing the respondents to

pay interest at 12% per annum on the amounts deposited from

the dates on which the deposits were made till payment.

21. Relevant portion of order dated 10.09.2024 passed by Hon’ble

the Supreme Court in SLP(C) No.7574 of 2016 is reproduced as under:-

“While exercising the extra ordinary jurisdiction under

Article 226 of the Constitution of India, the High Court after

recording a finding that there was unjust enrichment of the

State Government, has passed an order for payment of interest

to the respondent from the date on which the respondent

deposited the amount of tax. The High Court has not decided

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any issue in terms of the available statutory provisions. The

High Court has exercised extra ordinary jurisdiction under

Article 226 of the Constitution of India in the given facts of the

case. Hence, no case for interference is made out. The Special

Leave Petition is accordingly dismissed.”

22. A perusal of the above shows that the judgment referred to by

Mr. Goyal (learned counsel for respondent No.1) is not applicable to the

facts and circumstances of the present case since in above referred to

judgment, this Court granted interest as per the provisions of Section 43,

Rule 35 and Section 25 of HGST Act. Further, Hon’ble the Supreme Court

has categorically observed, as reproduced above, that the High Court has not

decided any issue in terms of the available statutory provisions rather, it has

exercised extraordinary jurisdiction under Article 226 of the Constitution of

India in light of the peculiar facts of that case.

23. In the present case we are not exercising extraordinary

jurisdiction under Article 226 of the Constitution of India but are deciding

the appeal. Therefore, judgment referred to by learned counsel for the

respondent does not come to his aid.

24. In the judgment passed by this Court in Khazan Chand Nathi

Ram’s case (supra), as referred to by learned counsel for the appellant, this

Court held that right of appeal is a substantive right that vests at the date of

commencement of the lis and is governed by the law prevailing at that time.

Section 39(5) of the HGST Act, requiring pre-deposit of tax, interest, and

penalty, continues to apply even after the repeal of the Act, as the right is

VATAP-264-2018 (O&M) -20-

saved under Section 4 of the Punjab General Clauses Act, 1898. Further that

lis under taxation laws commences on the date when returns are filed or

required to be filed. Cause of action arises from failure to furnish returns or

rejection of returns by the Assessing Authority. Pre-deposit condition under

Section 39(5) HGST Act for filing appeals remains enforceable despite

repeal, as the right to appeal is preserved by the General Clauses Act. Right

of appeal under taxation laws is substantive and accrues at the

commencement of the lis. It is governed by the law prevailing at the date of

initiation of proceedings, not by the law prevailing at the time of filing the

appeal or decision. Subsequent enactments cannot alter vested rights unless

expressly stated or implied.

25. The relevant portion of judgment passed in Khazan Chand

Nathi Ram’s case (supra), by this Court is reproduced as under:-

“2. The petitioner is a registered dealer under the Haryana

General Sales Tax Act, 1973 (for short "the HGST Act") and is

engaged in the business of purchase of paddy. For the

assessment year 1998-99, the Assessing Authority framed the

assessment under the HGST Act and raised an additional

demand on account of purchase tax calculated under Section 6

of the HGST Act. The petitioner filed appeal along with an

application under Section 39(5) of the HGST Act for

entertaining the appeal without prior payment of tax on account

of financial hardship on March 3, 2003. However, before the

appeal filed by the petitioner could be entertained by the

learned Appellate Authority, the HGST Act was repealed by

virtue of Section 61(1) of the Haryana Value Added Tax Act,

2003 (for short "the HVAT Act"). It was then alleged that under

VATAP-264-2018 (O&M) -21-

the HVAT Act, the appeal filed by the petitioner is required to be

entertained without any condition of pre-deposit of tax

assessed, therefore, the appeal filed by the petitioner is required

to be heard and decided under Section 33 of the HVAT Act. No

payment of tax can be insisted upon as a condition precedent

for hearing of appeal but still the learned appellate authority

vide order dated April 2, 2003 ordered the payment of tax

assessed in six monthly instalments as a condition precedent for

hearing of appeal. The said order of the learned appellate

authority was challenged by the petitioner in appeal before the

Haryana Tax Tribunal (for short “the Tribunal”). The learned

Tribunal dismissed the appeal holding that there is no implied

repeal of provisions of Section 39(5) of the HGST Act and the

appeal is to be entertained only under the provisions of Section

39(5) of the HGST Act. It is the said order which is impugned in

the present writ petition.

3. In the written statement, it has been pleaded that tax

liability related to the period when erstwhile HGST Act was still

in existence and has not been repealed. Reference was made to

the decision of the Supreme Court in the case of Titaghur Paper

Mills Co. Ltd. v. State of Orissa [1983] 53 STC 315 to state that

where any right or liability arises under a particular Act, the

remedy available under that Act has to be availed of. Reference

was also made to the decision of the Supreme Court in the case

of Manphul Singh Sharma v. Smt. Ahmedi Begum (1994) 5 JT

49 (SC) to state that when a repeal is accompanied by a fresh

legislation on the same subject, the provisions of the new Act

will have to be looked into to determine whether and how far

the new Act projects or keeps alive the old rights and liabilities.

It has been stated that the provisions of Sub-section (2) of

Section 61 of the HVAT Act envisages the procedure regarding

entertainment of pending appeals, applications, revisions or

VATAP-264-2018 (O&M) -22-

other proceedings made or preferred to any authority under the

old Act and pending at the commencement of the HVAT Act. It

has been pointed out that since the order of assessment has

been made before coming into operation of the HVAT Act,

therefore, the right of appeal is to be exercised in terms of the

HGST Act. Reliance was also placed upon Section 4 of the

Punjab General Clauses Act, 1898 (as applicable to the State of

Haryana).

4 to 17XXX XXX XXX

18.Learned Advocate-General, Haryana, also relied upon

the judgment of the Supreme Court in the case of Ramesh Singh

v. Cinta Devi (1996) 3 PLR 507 wherein the honourable

Supreme Court was considering the provisions of Section 173 of

the Motor Vehicles Act, 1988. It has been held that right of

appeal is a substantive right and is governed by the provisions

of law as it existed when the lis commenced. Since at the time of

commencement of lis, there was no condition of pre-deposit of

Rs. 25,000 for the purpose of filing of appeal, there cannot be

any insistence of pre-deposit of the said amount.

19 to 35XXX XXX XXX

36. In civil proceedings, lis commences on the presentation

of the plaint or in cases claiming compensation under the

Motor Vehicles Act on filing claim application. The question is

when lis can be said to commence under the taxation laws.

Section 25 of the HGST Act enjoins a duty upon an assessee to

file quarterly return and deposit tax thereon. If such returns are

accepted, there is no lis. Consequently, there would be no

occasion for the parties to file an appeal. However if such

returns are not accepted, the cause of action which arise on the

date when returns are required to be filed. The cause of action

can be said to be arisen also when an assessee is called upon to

furnish return on his failure to do so in terms of the provisions

VATAP-264-2018 (O&M) -23-

of the old Act. In fact, that is the relevant date as in Vitthalbhai

Naranbhai Patel's case [1961] 12 STC 219 (SC); AIR 1967

SC 344.

37. In view of the above discussion, we hold that right of

appeal is a vested right as if exists on the date of

commencement of lis. The lis can be said to commence under

the HGST Act on the date when return is filed or is required to

be filed. Therefore, the provisions of Section 39(5) of the HGST

Act would continue to govern the right of appeal vested in the

petitioner which is saved in terms of Section 4 of the Punjab

General Clauses Act (as applicable to State of Haryana).”

26. Above referred to judgment passed by this Court supports the

case of the appellant.

CONCLUDING ANALYSIS

27. Before proceeding to conclude, it would be apposite to

reproduce Section 6 of the General Clauses Act, 1897 along with the law

laid down by Hon’ble the Supreme Court.

28. Section 6 of the General Clauses Act, 1897, is reproduced as

under:-

6. Effect of repeal. — Where this Act, or any [Central Act] or

Regulation made after the commencement of this Act, repeals

any enactment hitherto made or hereafter to be made, then,

unless a different intention appears, the repeal shall not—

(a) revive anything not in force or existing at the time at

which the repeal takes effect; or

(b) affect the previous operation of any enactment so

repealed or anything duly done or suffered

thereunder; or

VATAP-264-2018 (O&M) -24-

(c) affect any right, privilege, obligation or liability

acquired, accrued or incurred under any enactment

so repealed; or

(d) affect any penalty, forfeiture or punishment incurred

in respect of any offence committed against any

enactment so repealed; or

(e) affect any investigation, legal proceeding or remedy

in respect of any such right, privilege, obligation,

liability, penalty, forfeiture or punishment as

aforesaid;

and any such investigation, legal proceeding or remedy may be

instituted, continued or enforced, and any such penalty,

forfeiture or punishment may be imposed as if the repealing Act

or Regulation had not been passed.”

29. Hon’ble the Supreme Court in State of Punjab Vs. Mohar

Singh Pratap Singh, 1955(1) SCR 893 held as under:-

“7.Under Section 30 of the General Clauses Act, which

corresponds to Section 27 of the Punjab Act, the provisions of

the Act are applicable to Ordinances as well. Of course, the

consequences laid down in Section 6 of the Act will apply only

when a statute or regulation having the force of a statute is

actually repealed. It has no application when a statute, which is

of a temporary nature, automatically expires by efflux of time.

The Ordinance in the present case was undoubtedly a

temporary statute but it is admitted that the period during

which it was to continue had not expired when the Repealing

Act was passed. The repeal therefore was an effective one

which would normally attract the operation of Section 6 of the

General Clauses Act. The controversy thus narrows down to the

short point as to whether the fact of the repeal of the Ordinance

VATAP-264-2018 (O&M) -25-

being followed by reenactment would make the provision of

Section 6 of the General Clauses Act inapplicable to the

present case.

8.The High Court, in support of the view that it took,

placed great reliance upon certain observations of Sulaiman

C.J. in ‘Danmal Parshotamdas v. Baburam Chhote Lal’,

AIR 1936 Allahabad 3. The question raised in that case was

whether a suit by an unregistered firm against a third party,

after coming into force of Section 69 of the Partnership Act,

would be barred by that section in spite of the saving clause

contained in section 74(b) of the Act. The Chief Justice felt

some doubts on the point and was inclined to hold that Section

74(b) would operate to save the suit although the right sought

to be enforced by it had accrued prior to the commencement of

the Act: but eventually he agreed with his colleague and held

that Section 69 would bar the suit.

While discussing the provision of Section 74(2) of the

Partnership Act, in course of his judgment, the learned Chief

Justice referred by way of analogy to Section 6(e) of the

General Clauses Act and observed as follows (at p.7): “It

seems that section 6(e) would apply to those cases only where a

previous law has been simply repealed and there is no fresh

legislation to take its place. Where an old law has been merely

repealed, then the repeal would not affect any previous right

acquired nor would it even affect a suit instituted subsequently

in respect of a right, previously so acquired. But where there is

a new law which not only repeals the old law, but is substituted

in place of the old law, section 6(e) of the General Clauses Act

is not applicable, and we would have to fall back on the

provisions of the new Act itself”.

These observations could not undoubtedly rank higher than

mere ‘obiter dictum’ for they were not at all necessary for

VATAP-264-2018 (O&M) -26-

purposes of the case, though undoubtedly they are entitled to

great respect. In agreement with this dictum of Sulaiman C.J.,

the High Court of Punjab, in its judgment in the present case,

has observed that where there is a simple repeal and the

Legislature has either not given its thought to the matter of

prosecuting old offenders, or a provision dealing with that

question has been inadvertently omitted, section 6 of the

General Clauses Act will undoubtedly be attracted.

But no such inadvertence can be presumed where there has

been a fresh legislation on the subject and if the new Act does

not deal with the matter, it may be presumed that the

Legislature did not deem it fit to keep alive the liability incurred

under the old Act. In our opinion the approach of the High

Court to the question is not quite correct. Whenever there is a

repeal of an enactment, the consequences laid down in section

6 of the General Clauses Act will follow unless, as the section

itself says, a different intention appears. In the case of a simple

repeal there is scarcely any room for expression of a contrary

opinion. But when the repeal is followed by fresh legislation on

the same subject we would undoubtedly have to look to the

provisions of the new Act, but only for the purpose of

determining whether they indicate a different intention.

The line of enquiry would be, not whether the new Act expressly

keeps alive old rights and liabilities but whether it manifests an

intention to destroy them. We cannot therefore subscribe to the

broad proposition that section 6 of the General Clauses Act is

ruled out when there is repeal of an enactment followed by a

fresh legislation. Section 6 would be applicable in such cases

also unless the new legislation manifests an intention

incompatible with or contrary to the provisions of the section.

Such incompatibility would have to be ascertained from a

consideration of all the relevant provisions of the new law and

VATAP-264-2018 (O&M) -27-

the mere absence of a saving clause is by itself not material. It

is in the light of these principles that we now proceed to

examine the facts of the present case.

9.The offence committed by the respondent consisted in

filing a false claim. The claim was filed in accordance with the

provision of section 4 of the Ordinance and under section 7 of

the Ordinance, any false information in regard to a claim was a

punishable offence. The High Court is certainly right in holding

that section 11 of the Act does not make the claim filed under

the Ordinance a claim under the Act so as to attract the

operation of section 7. 

Section 11 of the Act is in the following terms:

“The East Punjab Refugees (Registration of Land Claims)

Ordinance No. VII of 1948 is hereby repealed and any

rules made, notifications issued, anything done, any action

taken in exercise of the powers conferred by or under the

said Ordinance shall be deemed to have been made,

issued, done or taken in exercise of the powers conferred

by, or under this Act as if this Act had come into force on

3rd day of March, 1948.”

We agree with the High Court that the expression “anything

done” occurring in the section does not mean or include an act

done by a person in contravention of the provisions of the

Ordinance. What the section contemplates and keeps alive are

rules, notifications or other official acts done in exercise of the

powers conferred by or under the Ordinance and these powers

are mentioned in several sections of the Act. But although the

lodging of the claim does not come within the purview

of section 11 of the Act, we are of opinion that the proviso

to section 4 of the Act clearly shows that a claim filed under the

Ordinance would be treated as one filed under the Act with all

the consequences attached thereto. Section 4 of the Act

VATAP-264-2018 (O&M) -28-

provides for the registration of land claims. The first subsection

lays down how the claim is to be filed. The proviso attached to

it then says that “a refugee who has previously submitted a

claim under Ordinance VII of 1948 to any other authority

competent to register such claim shall not submit another claim

in respect of the same land to the Registering Officer”. Such

claim would be reckoned and registered as a claim under the

Act and once it is so treated the incidents and corollaries

attached to the filing of a claim, as laid down in the Act, must

necessarily follow. The truth or falsity of the claim has to be

investigated in the usual way and if it is found that the,

information given by the claimant is false, he can certainly be

punished in the manner laid down in sections 7 and 8 of the

Act.

If we are to hold that the penal provisions contained in the Act

cannot be attracted in case of a claim filed under the

Ordinance, the results will be anomalous and even if on the

strength of a false claim a refugee has succeeded in getting an

allotment in his favour, such allotment could not be cancelled

under section 8 of the Act. We think that the provisions

of sections 4,7 and 8 make it apparent that it was not the

intention of the Legislature that the rights and liabilities in

respect of claims filed under the Ordinance shall be

extinguished on the passing of the Act, and this is sufficient for

holding that the present case would attract the operation

of section 6 of the General Clauses Act.

It may be pointed out that section 1 1 of the Act is somewhat

clumsily worded and it does not make use of expressions which

are generally used in saving clauses appended to repealing

statutes; but as has been said above the point for

our consideration is whether the Act evinces an intention which

is inconsistent with the continuance of rights and liabilities

VATAP-264-2018 (O&M) -29-

accrued or incurred under the Ordinance and in our opinion

this question has, to be answered in the negative.

10.The Advocate-General of Punjab has drawn our attention

to certain American authorities which hold that in case of

simultaneous repeal and re-enactment, the re-enactment is to be

considered as reaffirmation of the old law and the provisions of

the repealed Act which are thus re-enacted continue in force

uninterruptedly. It appears that judicial opinion in America on

this point is not quite uniform and we do not consider it

necessary to express any opinion upon it. The provisions of

Section 6 of the General Clauses Act will, in our opinion, apply

to a case of repeal even if there is simultaneous enactment

unless a contrary intention can be gathered from the new

enactment. The result is that the appeal is allowed and the

judgment of the High Court set aside. The Advocate-General

does not press for enhancement of sentence passed on the

respondent. Consequently, it is unnecessary for the High Court

to hear the reference made to it by the District Magistrate,

Jullundur any further. The sentence already passed upon the

respondent by the trying Magistrate shall stand and if the fine

of Rs.120 has not already been, paid, it shall be paid now. In

default, the respondent shall suffer rigorous imprisonment for

one month.

Appeal allowed.”

30. Hon’ble the Supreme Court in M/s Gammon India Ltd. Vs.

Spl. Chief Secretary & Ors., 2006(3) SCC 354 held as under:-

“2.The principal question which falls for adjudication in

these appeals is regarding the jurisdiction of the Assistant

Commissioner of Commercial Taxes, Warangal Division,

Andhra Pradesh in initiating and completing penalty

VATAP-264-2018 (O&M) -30-

proceedings under the Andhra Pradesh General Sales Tax Act,

1957 (for short A.P.G.S. Tax Act) after its repeal.

3 to 10.XXXXXXXXX

11.The appellant, aggrieved by the said order, also filed a

writ petition which was heard by a Division Bench of the High

Court. The Division Bench examined the question whether the

Assistant Commissioner of Commercial Taxes was entitled to

initiate and complete the penalty proceedings under the

A.P.G.S. Tax Act subsequent to its repeal and introduction of the

A.P.V.A. Tax Act with effect from 1.4.2005. The High Court

while dismissing the writ petition held that the Assistant

Commissioner was not prohibited from initiating and

completing the said proceedings.

12.The Appellant, aggrieved by the said judgment, has filed

Special Leave Petitions under Article 136 before this Court.

For examining the jurisdiction of the Assiatant Commissioner

of Commercial Taxes in initiating and completing the penalty

proceedings under the A.P.G.S. Tax Act, it is necessary to note

the relevant provisions of the Act.

13.Section 80 of the A.P.V.A. Tax Act reads as under :

“80(1) The Andhra Pradesh General Sales Tax Act,

1957 is hereby repealed provided that such repeal shall

not effect the previous operation of the said Act or section

or any right, title, obligation or liability already acquired,

accrued or incurred thereunder and subject thereto,

anything done or any action taken (including any

appointment, notification, notice, order, rule from,

regulation, certificate, license or permit) in the exercise of

any power conferred by said Act or Section shall be

deemed to have been done or taken in the exercise of the

powers conferred by or under this Act, as if this Act was in

force on the date on which such thing was done or action

VATAP-264-2018 (O&M) -31-

was taken and all arrears of tax and other amounts due at

the commencement of this Act may be recovered as if they

had accrued under this Act.

(2) Notwithstanding anything contained in sub-section (1),

any application, appeal, revision or other proceedings

made or preferred to any officer or authority under the

said Act or section and pending at the commencement of

the Act, shall, after such commencement, be transferred to

and disposed of by the officer or authority who would have

had jurisdiction to entertain such application, appeal,

revision or other proceedings was made or preferred.

(3) Upon such repeal of the Andhra Pradesh General

Sales Tax Act, 1957 the provisions of Sections 8, 8-

A, 9 and 18 of the Andhra Pradesh General Clauses act,

1891 shall apply.”

14.Section 80(3) of the A.P.V.A. Tax Act provides for the

application of Section 8 of the Andhra Pradesh General

Clauses Act, 1891 on the repeal of the APGST Act,

1957. Section 8 of the A.P. General Clauses Act, 1891 deals

with the effect of repealing the Act, reads as under :

“Effect of Repealing an Act- Where any Act to which this

Chapter applies, repeals any other enactment, then the

repeal shall not :

(a) affect anything done or any offence committed, or any

fine or penalty incurred or any proceedings begun before

the commencement of the repealing act; or

(b) revive anything not in force or existing at the time at

which the repeal takes effect; or

(c) affect the previous operation of any enactment so

repealed or anything duly done or suffered under any

enactment so repealed; or

VATAP-264-2018 (O&M) -32-

(d) affect any right, privilege, obligation or liability

acquired, accrued or incurred under any enactment so

repealed; or

(e) affect any fine, penalty, forfeiture or punishment

incurred in respect of any offence committed against any

enactment so repealed; or

(f) affect any investigation, legal proceeding or remedy in

respect of any such right, privilege, obligation, liability,

fine, penalty, forfeiture or punishment as aforesaid; and

any such investigation, legal proceeding or remedy may be

instituted, continued or enforced, any such fine, penalty,

forfeiture or punishment may be imposed, as if the

repealing Act had not been passed.”

15.The Court observed that even in the absence of a

provision similar to Section 80(3) of the A.P.V.A. Tax Act,

Section 8 of the A.P.G.S. Tax Act, which is analogous to Section

6 of the General Clauses act, is not confined to mere repeal of a

statute but extends to a repeal followed by fresh legislation,

unless a different intention appears from the new enactment and

that is for the Court to enquire whether the fresh legislation had

preserved the rights and liabilities created under the old statute

or whether their intentment was to obliterate them. This

difficulty does not arise in the present case in as much as

Section 80(3) of the A.P.V.A. Tax Act specifically makes Section

8 of the A.P. General Clauses Act, 1891 applicable on the

repeal of the A.P.G.S.T. Act.

16 to 19XXX XXX XXX

20.We have noticed relevant facts and rival contentions.

Now, in order to ascertain the correct legal position it has

become imperative to examine relevant provisions and decided

cases, dealing with the ambit and scope of repeal and

reenactment of a statute. Since the General Clauses Act, 1897 is

VATAP-264-2018 (O&M) -33-

largely based on the English Interpretation Act, 1889, it is

appropriate to deal with English and other relevant cases

throwing light on issues involved in the case.

21.According to the law of England, as it stood before

Interpretation Act of 1889, the effect of repealing a statute was

to obliterate it as completely from the records of Parliament as

if it had never been passed, except for the purpose of those

actions, which were commenced, prescribed and concluded

while it was an existing law.

22.A repeal therefore, without any saving clause would

destroy any proceeding whether or not yet begun or whether

pending at the time of enactment of the Repealing Act and not

already prosecuted to a final judgment so as to create a vested

right.

23.The legal position which existed in England

before Section 38(2) was inserted in the Interpretation Act of

1889 is reflected from the following two English cases.

24.In Kay vs. Goodwin reported in (1830) 6 Bing. 576 :

English Reports (Volume 130) at page 1403, Tindal, Chief

Justice observed that the effect of repealing a statute is to

obliterate it as completely from the records of the Parliament as

if it had never been passed; and it must be considered as a law

that never existed except for the purpose of those actions which

were commenced, prosecuted and concluded whilst it was an

existing law.

25.Lord Tanterden in Surtees vs. Ellison - (1829) 9 B & C.

750 : English Report (Volume 109) at page 278 observed that

when an Act of Parliament is repealed, it must be considered

(except as to transactions past and closed) as if it had never

existed.

26.In England, to obviate such result a practice was

developed to insert a saving clause in the repealing statute with

VATAP-264-2018 (O&M) -34-

a view to preserve rights and liabilities already accrued or

incurred under the repealed enactment. When it was found

cumbersome to insert a saving clause in every statute, then in

order to dispense with the necessity of having to insert a saving

clause on each occasion, Section 38(2) was incorporated in the

Interpretation Act of 1889. Section 6 of the Indian General

Clauses Act is on the same lines as Section 38(2) of the

Interpretation Act of 1889. Section 38(2) of the Interpretation

Act, 1889 reads as under:

Effect of repeal in future Acts.

(1) xxx xxx xxx

(2) Where this Act or any Act passed after the

commencement of this Act repeals any other enactment,

then, unless the contrary intention appears, the repeal

shall not

(a) revive anything not in force or existing at the time at

which the repeal takes effect; or

(b) affect the previous operation of any enactment so

repealed or anything duly done or suffered under any

enactment so repealed; or

(c) affect any right, privilege, obligation, or liability

acquired, accrued, or incurred under any enactment so

repealed; or

(d) affect any penalty, forfeiture, or punishment incurred in

respect of any offence committed against any enactment so

repealed; or

(e) affect any investigation, legal proceeding, or remedy in

respect of any such right, privilege, obligation, liability,

penalty, forfeiture, or punishment as aforesaid;

and any such investigation, legal proceeding, or remedy

may be instituted, continued, or enforced, and any penalty,

VATAP-264-2018 (O&M) -35-

forfeiture, or punishment may be imposed, as if the

repealing Act had not been passed.”

27.The legal position dramatically changed after

incorporation of Section 38 (2) in the English Interpretation

Act, 1889. The following case is illustrative of the change which

took place after incorporation of the said provision.

28.Lord Morris of Borth-y-Gest, while interpreting Section

10 of the Interpretation Ordinance of Hong Kong, which

corresponds with Section 38 of the Interpretation Act of 1889 in

an appeal from the Judgment of the Supreme Court of Hong

Kong, in the matter of Director of Public Works vs. Ho Po

Sang reported in 1961 All England Law Reports Vol. 2 pg.

731, observed as under:

“It may be, therefore, that, under some repealed

enactment, a right has been given but that, in respect of it,

some investigation or legal proceeding is necessary. The

right is then unaffected and preserved. It will be preserved

even if a process of quantification is necessary. But there

is a manifest distinction between an investigation in

respect of a right and an investigation which is to decide

whether some right should or should not be given. On a

repeal, the former is preserved by the Interpretation Act.

The latter is not.”

29.When we look to the American law, we find basic

similarity in the scope and ambit of the provisions relating to

repeal and reenactment of the statute. We deem it appropriate

to refer some relevant American judgments.

30.In Bear Lake & River Waterworks & Irrigation Co. v.

Garland, 164 US 1, 41 L Ed 327, the U.S. Supreme Court

has held that the reenactment of a statute which has been

repealed by specific provision, or by implication from later

VATAP-264-2018 (O&M) -36-

legislation, invalidates the previous repeal and restores the

statute to effective operation.

31.In that very case, the Court held that a so-called

“simultaneous repeal and reenactment” is a misnomer, for

there is no repeal by implication effectuated of the original act,

and even though the "repeal" is declared by specific provision

in the later enactment the courts will construe the unchanged

provisions as being continuously in force.

32.In Commonwealth vs. Gross - 21 A.2d 238, 240, 145

Pa.Super. 92 it was observed that insofar as Workmen’s

Compensation Act of 1939 is a reenactment of Workmen’s

Compensation Act of 1937, it is “continuance” of such act, but

insofar as act of 1939 is in conflict with act of 1937, it is a

“repeal” of the act of 1937.

33.In State vs. Bemis 45 Neb. 724, 64 N.W. 348, the Court

held that the rule seems to be settled in this state that the

simultaneous repeal and reenactment of a statute in terms or in

substance is a mere affirmance of the original act, and not a

“repeal” in the strict or constitutional sense of the term.

34.The Court further held in this case that as a rule of

construction the simultaneous repeal and reenactment of the

same statute in terms or in substance is a mere affirmance of

the original act, and not a repeal in the strict and constitutional

sense of the term. Where the reenactment is in the words of the

old statute, and was evidently intended to continue the

uninterrupted operation of such statute, the new act or

amendment is a mere continuation of the former act, and not in

a proper sense a repeal.

35.In State v. Gray, 40 Or App 799, 596 P2d 611(1979)

the Court held that when the legislature incorporates in one

statute matter that is included in another, a subsequent repeal

of the statute containing the incorporated matter does not

VATAP-264-2018 (O&M) -37-

necessarily affect the statute in which it has been incorporated,

as the question is one of the legislative intent. In absence of

evidence of a contrary intent, the legislature will be presumed

to have intended the repeal not to affect the statute into which

the matter is incorporated.

36.In George v. City of Asheville, 80 F2d 50 (CCA4 1936)

the Court observed that the reenactment of a statute is a

continuation of the law as it existed prior to the reenactment as

far as the original provisions are repeated without change in

the reenactment. Consequently, an intermediate statute which

has been superimposed upon the original enactment as a

modification of its provisions is likewise not repealed by the

reenactment of the original statute, but is construed to be in

force to modify the reenacted statute as it modified the original

enactment.

37.In State v. Board of Appeals, 21, Wis 2d 516, 124

NW2d 809 (1963) the Court held that the continuous operation

of a statute was not interrupted by repeal and reenactment at

same time in substantially the same language.

38.In the case of Pentheny, Ltd. vs. Government of Virgin

Islands Federal Reporter 2d Series Vol. 360 pg. 786, the U.S.

Court of Appeals has observed as under:

“Simultaneous repeal and re-enactment of substantially

the same statute, or part thereof, is a substitution and not a

repeal, and the statute, or part thereof, thus substituted is

construed as a continuation of the original provisions to

the extent re-enacted and jurisdiction of administrative

agency under such statute is not disturbed as to those

provisions which were continued under the new statute.”

39.XXX XXX XXX

VATAP-264-2018 (O&M) -38-

40.Analysis of the provisions and some decided cases of

England and America reveal the existence of similar provisions

and interpretation in the respective countries.

41.Section 6 of the General Clauses Act, 1897 is

predominantly based on Section 38 of the English

Interpretation Act, 1889. We have already reproduced Section

38 of the English Interpretation Act, 1889. In order to discern

and evaluate the strong similarity between the Indian and

English Law on this subject, we deem it appropriate to set

out Section 6 of the Indian General Clauses Act, 1897.

“6. Effect of repeal.- Where this Act, or any Central Act or

Regulation made after the commencement o this Act,

repeals any enactment hitherto made or hereafter to be

made, then, unless a different intention appears, the repeal

shall not

(a) revive anything not in force or existing at the time at

which the repeal takes effect; or

(b) affect the previous operation of any enactment so

repealed or anything duly done or suffered thereunder; or

(c) affect any right, privilege, obligation or liability

acquired, accrued or incurred under any enactment so

repealed; or

(d) affect any penalty, forfeiture or punishment incurred in

respect of any offence committed against any enactment so

repealed; or

(e) affect any investigation, legal proceeding or remedy in

respect of such right, privilege, obligation, penalty,

forfeiture or punishment as aforesaid.

and any such investigation, legal proceeding or remedy

may be instituted, continued or enforced, and any such

penalty, forfeiture or punishment may be imposed as if the

repealing Act or Regulation had not been passed.”

VATAP-264-2018 (O&M) -39-

42.Following decided Indian cases would reveal, that Indian

courts have interpreted Section 6 of the said Act in the same

manner as the similar provisions have been interpreted by the

English and American courts.

43.In Basant Singh vs. Rampal Singh, AIR 1919 Oudh

217, it has been held that where an Act repeals a previous Act

and provides that all orders issued under the repealed Act shall,

so far as may be, be deemed to have been issued under the new

Act, or is repealed with proviso 'except as to things done under

it' the provision is designed to safeguard the validity of orders,

appointments, etc., issued under the repealed Act and not to

give retrospective effect to the new Act.

44.A Seven Judge Bench of this Court by majority laid down

in Keshavan Madhava Menon vs. The State of Bombay,

(1951) SCR 228, that the Court was concerned with the legality

of the prosecution of the appellant for contravention of the

Indian Press (Emergency Powers) Act, 1931. The offence had

been committed before the Constitution came into force and a

prosecution launched earlier was pending after January 26,

1950. The enactment which created the offence was held to be

void under Article 19(1)(a) read with Article 13 as being

inconsistent with one of the Fundamental rights guaranteed by

Part III of the Constitution. In the circumstances, the point that

was debated before this Court was whether the prosecution

could be continued after the enactment became void. In this

case, the Court by a majority judgment held that the

Constitution was prospective in its operation and that Article

13(1) would not affect the validity of these proceedings

commenced under pre-Constitution laws which were valid up to

the date of the Constitution coming into force, for to hold that

the validity of these proceedings were affected would in effect

be treating the Constitution as retrospective. Therefore, it was

VATAP-264-2018 (O&M) -40-

considered that there was no legal objection to the continuance

of the prosecution.

45.The controversy in issue was dealt with comprehensively

with meticulous precision by a Constitution Bench of this Court

in State of Punjab vs. Mohar Singh (1955) 1 SCR 893.

Respondent Mohar Singh filed a claim as an evacuee under

the East Punjab Refugees (Registration of Land Claims) Act,

1948. The claim was investigated into and it was found to be

false; it was held to be an offence under the Act. At the trial, on

his confession, the respondent was convicted and sentenced to

imprisonment. On suo motu revision, the District Magistrate

found the sentence to be inadequate and referred the case to the

High Court. The High Court found that since the ordinance was

repealed, he could not be convicted under Section 7 of the Act.

This Court, on appeal, reversed the decision and upheld the

conviction applying Section 6 of the General Clauses Act.

46.The principle which has been laid down in this case is

that whenever there is a repeal of an enactment, the

consequences laid down in section 6 of the General Clauses

Act will follow unless, as the section itself says, a different

intention appears. In the case of a simple repeal there is

scarcely any room for expression of a contrary opinion. But

when the repeal is followed by fresh legislation on the same

subject we would undoubtedly have to look to the provisions of

the new Act, but only for the purposes of determining whether

they indicate a different intention. The line of enquiry would be,

not whether the new Act expressly keeps alive old rights and

liabilities but whether it manifests an intention to destroy them.

We cannot therefore, subscribe to the broad proposition

that Section 6 of the General Clauses Act is ruled out when

there is repeal of an enactment followed by a fresh

legislation. Section 6 would be applicable in such cases also

VATAP-264-2018 (O&M) -41-

unless the new legislation manifests an intention incompatible

with or contrary to the provisions of the section.

47.In the case of Brihan Maharashtra Sugar Syndicate

vs. Janardan AIR 1960 SC 794, it was observed as under:

“Section 6 of the General Clauses Act provides that where

an Act is repealed, then, unless a different intention

appears, the repeal shall not affect any right or liability

acquired or incurred under the repealed enactment or any

legal proceeding in respect of such right or liability and

the legal proceeding may be continued as if the repealing

Act had not been passed. There is no dispute that Section

153- C of the Act of 1913 gave certain rights to the share-

holders of a company and put the company as also its

directors and managing agents under certain liabilities.

The application under that section was for enforcement of

these rights and liabilities. Section 6 of the General

Clauses Act would therefore preserve the rights and

liabilities created by Section 153-C of the Act of 1913 and

a continuance of the proceeding in respect thereof would

be competent in spite of the repeal of the Act of 1913,

unless of course a different intention could be gathered.”

48.A Constitution Bench of this Court in State of Orissa vs.

M.A. Tulloch and Co., (1963) 4 SCR 461, also had an

occasion to examine the controversy regarding repeal of the

Act. The submission in this case was that the supersession of

the Orissa Act by the Central Act was neither more nor less

than a repeal. The reference was made to Section 6 of the

General Clauses Act, 1897 which has been reproduced (supra).

In the said case, the submission was that the interpretation of

the Section was two-fold: (1) the word 'repeal' used in the

opening paragraph was not confined to express repeal but that

the word was comprehensive enough to include cases of implied

VATAP-264-2018 (O&M) -42-

repeals; (2) it was submitted that if the expression 'repeal'

in Section 6(b) be deduced as being confined to express

repeals, still the principle underlying Section 6 was of general

application and capable of being attracted to cases of implied

repeals also. 

49.In M.A. Tulloch's case (supra), the Court aptly observed

that we have to inquire the principle on which the saving clause

in Section 6 is based. It is manifest that every later enactment

which supersedes an earlier one or pouts an end to an earlier

state of the law is presumed to intend the continuance of rights

accrued and liabilities incurred under the superseded

enactment unless there were sufficient indications - express or

implied - in the later enactment designed to completely

obliterate the earlier state of the law.

50.The next question is whether the application of that

principle could or ought to be limited to cases where a

particular form of words is used to indicate that the earlier law

has been repealed. The entire theory underlying implied repeals

is that there is no need for the later enactment to state in

express terms that an earlier enactment has been repealed by

using any particular set of words or form of drawing but that if

the legislative intent to supersede the earlier law is manifested

by the enactment of provisions as to effect such supersession,

then there is in law a repeal notwithstanding the absence of the

word 'repeal' in the later statute. Now, if the legislative intent to

supersede the earlier law is the basis upon which the doctrine

of implied repeal is founded, could there be any incongruity in

attributing to the later legislation the same intent which Section

6 presumes where the word 'repeal' is expressly used. So far as

statutory construction is concerned, it is one of the cardinal

principles of the law that there is no distinction or difference

between an express provision and a provision which is

VATAP-264-2018 (O&M) -43-

necessarily implied, for it is only the form that differs in the two

cases and there is no difference in intention or in substance. A

repeal may be brought about by repugnant legislation, without

even any reference to the Act intended to be repealed, for once

legislative competence to effect a repeal is posited, it matters

little whether this is done expressly or inferentially or by the

enactment of repugnant legislation. If such is the basis upon

which repeals and implied repeals are brought about it appears

to us to be both logical as well as in accordance with the

principles upon which the rule as to implied repeal rests to

attribute to that legislature which effects a repeal by necessary

implication the same intention as that which would attend the

case of an express repeal. Where an intention to effect a repeal

is attributed to legislature then the same would, in our opinion,

attract the incident of the saving found in Section 6 for the

rules of construction embodied in the General Clauses Act are,

so to speak, the basic assumptions on which statutes are

drafted.

51.The Court examined the ambit and scope of Section 6 of

the General Clauses Act, 1897 in Tulloch’s case. According to

the ratio of the said judgment, the principal underlying Section

6 of the General Clauses Act, 1897 is that every later

enactment which supersedes an earlier one or puts an end to an

earlier state of the law is presumed to intend the continuance of

rights accrued and liabilities incurred under the superseded

enactment unless there were sufficient indications expressed or

implied in the later enactment designed to completely obliterate

the earlier state of the law.

52.In view of the interpretation what follows is absolutely

clear that unless a different intention appears in the repealing

Act, any legal proceeding can be instituted and continued in

respect of any matter pending under the repealed Act as if that

VATAP-264-2018 (O&M) -44-

Act was in force at the time of repeal. In other words, whenever

there is a repeal of an enactment the consequences laid down

in Section 6 of the General Clauses Act will follow unless, as

the section itself says, a different intention appears in the

repealing statute.

53.In case the repeal is followed by fresh legislation on the

same subject the court has to look to the provisions of the new

Act for the purpose of determining whether they indicate a

different intention. The question is not whether the new Act

expressly keeps alive old rights and liabilities but whether it

manifests an intention to destroy them. The application of this

principle is not limited to cases where a particular form of

words is used to indicate that the earlier law has been repealed.

As this Court has said, it is both logical as well as in

accordance with the principle, upon which the rule as to

implied repeal rests, to attribute to that legislature which effects

a repeal by necessary implication the same intention as that

which would attend the case of an express repeal. Where an

intention to effect a repeal is attributed to a legislature then the

same would attract the incident of saving found in Section 6.

54.In the case of Munshilal Beniram Jain Glass Works vs.

S. P. Singh (1971) II S.C.J. July- December p. 307, this Court

held that under Section 6 would apply to a case of repeal even

if there is a simultaneous enactment unless a contrary intention

appears from the new enactment.

55.In Qudrat Ullah vs. Municipal Board, Bareilly, (1974)

1 SCC 202, the Court held that the general principle is that an

enactment which is repealed is to be treated, except as to

transactions passed and closed, as if it had never existed.

However, the operation of this principle is subject to any

savings which may be made, expressly or by implication, by the

VATAP-264-2018 (O&M) -45-

repealing enactment. If a contrary intention appears from the

repealing Statute, that prevails.

56.A three-Judge Bench of this Court in India Tobacco Co.

Ltd. vs. CTO, (1975) 3 SCC 512, held that repeal is not a

matter of mere form but is of substance, depending on the

intention of the legislature. If the intention indicated either

expressly or by necessary implication in the subsequent statute

was to abrogate or wipe off the former enactment wholly or in

part, then it would be a case of total or pro tanto repeal. If the

intention was merely to modify the former enactment by

engrafting an exception or granting an exemption, or by super-

adding conditions, or by restricting, intercepting or suspending

its operation, such modification would not amount to a repeal.

Broadly speaking, the principal object of a repealing and

amending Act is to 'excise dead matter, prune off superfluities

and reject clearly inconsistent enactments’.

57.When there is a repeal and simultaneous

reenactment, Section 6 of the General Clauses Act would apply

to such a case unless contrary intention has been gathered from

the repealing Act. Section 6 would be applicable in such cases

unless the new legislation manifests intention inconsistent with

or contrary to the application of the section. When the repeal is

followed by a fresh legislation on the same subject, the Court

would undoubtedly have to look to the provisions of the new Act

only for the purpose of determining whether the new Act

indicates different intention. The object of repeal and

reenactment is to obliterate the Repealed Act and to get rid of

certain obsolete matters.

58.In Commissioner of Income Tax vs. Shah Sadiq and

Sons AIR 1987 SC 1217, this Court observed that a right

which had accrued and had become vested, continued to be

capable of being enforced notwithstanding the repeal of the

VATAP-264-2018 (O&M) -46-

statute under which that right accrued unless the repealing

statute took away such right expressly or by necessary

implication. This is the effect of Section 6 of the General

Clauses Act, 1897.

59.In M/s Gurcharan Singh Baldev Singh v. Yashwant

Singh and Ors. (1992) 1 SCC 428, the Court observed that the

objective of Section 6(c) of the General Clauses Act, 1897 is to

ensure protection of any right or privilege acquired under the

repealed Act. The only exception to it is legislative intention to

the contrary. That is, the repealing Act may expressly provide

or it may impliedly provide against continuance of such right,

obligation or liability.

60 to 71XXX XXX XXX

72.In the instant cases, there is a simultaneous repeal and

the reenactment and the A.P.V.A. Tax Act clearly saves the

earlier provisions in toto. Consequently, rights and liabilities

accrued or incurred under the A.P.G.S. Tax Act shall continue

even after it is repealed.

73.On critical analysis and scrutiny of all relevant cases and

opinions of learned authors, the conclusion becomes

inescapable that whenever there is a repeal of an enactment

and simultaneous reenactment, the reenactment is to be

considered as reaffirmation of the old law and provisions of the

repealed Act which are thus reenacted continue in force

uninterruptedly unless, the reenacted enactment manifests an

intention incompatible with or contrary to the provisions of the

repealed Act. Such incompatibility will have to be ascertained

from a consideration of the relevant provisions of the reenacted

enactment and the mere absence of saving clause is, by itself,

not material for consideration of all the relevant provisions of

the new enactment. In other words, a clear legislative intention

of the reenacted enactment has to be inferred and gathered

VATAP-264-2018 (O&M) -47-

whether it intended to preserve all the rights and liabilities of a

repealed statute intact or modify or to obliterate them

altogether.

74.On the touchstone of the principles of law culled out from

the judgments of various courts applied to the facts of these

cases lead to a definite conclusion that the Assistant

Commissioner (Commercial Taxes), Warangal Division was

fully justified in initiating and completing the proceedings

under the A.P.G.S. Tax Act even after it is repealed.”

31. The issue involved in the present appeal is that whether the

payment of interest is to be paid as per provisions of HGST Act, 1973 or

HVAT Act, 2003, when the assessment order is passed under the HGST Act,

1973 on 29.03.2005, i.e after the coming into force of HVAT Act, 2003.

32. Hon’ble the Supreme Court in Mohar Singh Pratap Singh’s

case (supra) and M/s Gammon India Ltd.’s case (supra) held that whenever

there is repeal of an enactment and simultaneous re-enactment, re-enactment

is to be considered/construed as re-affirmation of old/earlier law and

provisions of repealed Act which are thus, re-enacted continue in force

uninterruptedly unless, re-enacted enactment manifests an intention

incompatible with or contrary to the provisions of repealed Act. Further it

was held that such incompatibility will have to be ascertained from a

consideration of relevant provisions of the reenacted enactment and mere

absence of saving clause is, by itself, not material for consideration of all the

relevant portions of new enactment.

VATAP-264-2018 (O&M) -48-

33. In the present case, Section 61 (Repeal and Saving) of HVAT

Act, 2003, repeals HGST Act, 1973, by saving the previous operation of the

Act so repealed or anything duly done or suffered thereunder and further

saves any right, title, privilege, obligation or liability acquired, accrued or

incurred under the repealed Act. Further it saves any act done or any action

taken (including any appointment, notification, notice, order, rule, form,

regulation, certificate) in the exercise of any power conferred by or under the

repealed Act. Section 61 (Repeal and Saving) of HVAT Act thus clearly

shows/reflects the legislative intention to preserve the continuity of legal

consequences flowing from acts or omission under the repealed HGST Act.

the intention of the legislation.

34. In view of Section 6 of the General Clauses Act, 1897 and law

laid down by Hon’ble the Supreme Court as referred to above, the

substantial questions of law are answered in favour of the appellant and

against the respondent.

35. Consequently, present appeal is allowed. Impugned order dated

03.07.2017 passed by the Haryana Tax Tribunal in STA No.34 of 2014-15 is

hereby set aside.

36. Pending application(s), if any, also stand disposed of.

(LISA GILL) (SUDEEPTI SHARMA )

JUDGE JUDGE

18.07.2025

Virender

Whether speaking/reasoned:Yes / No

Whether reportable: Yes / No