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CASE NO.:

Appeal (civil) 1148 of 2006

PETITIONER:

M/s Gammon India Ltd.

RESPONDENT:

Spl. Chief Secretary & Ors

DATE OF JUDGMENT: 16/02/2006

BENCH:

RUMA PAL, DR. AR. LAKSHMANAN & DALVEER BHANDARI

JUDGMENT:

J U D G M E N T

(Arising out of SLP(C) Nos. 20487-20488/05)

WITH

C.A. No.1149/2006

(Arising out of SLP(C) Nos.22994-22995 of 2005)

Dalveer Bhandari, J

Leave granted.

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 proceedings under the Andhra Pradesh General

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

repeal.

We are not adjudicating the merits of the

controversy involved in these appeals but are confining

our judgment to the limited question of the jurisdiction of

the Assistant Commissioner in initiating proceedings

under the said A.P.G.S. Tax Act after its repeal. The brief

facts which are imperative to dispose of these appeals

are as under:

The appellant, M/s Gammon India Ltd. is a

construction company. The appellant after obtaining

construction contract in the State of Andhra Pradesh

applied to a registered dealer for the purposes of Section

5B of the A.P.G.S. Tax Act for concessional tax available

to the registered dealers, purchasing from other

registered dealers in the State of Andhra Pradesh.

According to the respondents, the appellant had falsely

issued Form G and claimed reduced rates of tax from the

sellers whereas according to the appellant, G-2 Form was

issued by the Sales Tax authorities and the form

specifically enumerated commodities/items which were

entitled to a concessional tax. One of the items

specifically enumerated therein was 'cement'. Relying on

the said G-2 Form, as was also the case with all other

construction companies in the State, the appellant while

purchasing 'cement' for manufacture of ready mix

concrete, obtained the benefit of a lower tax.

On 26.2.2005, two show cause notices, being PR

No.6/2004-05 and PR No. 7/2004-2005, were issued by

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the Assistant Commissioner, Commercial Taxes. In order

to properly comprehend the controversy involved in this

case one such notice PR No. 6/2004-2005 is set out as

under:

"GOVERNMNT OF ANDHRA PRADESH

COMMERCIAL TAXES DEPARTMENT

Office of the Deputy

Commissioner (CT)

Warangal Division,

Warangal

P.R. No.6/2004-05, Dated: 26.02.2005

NOTICE

Please take notice that M/s Gammon

India Limited. Paloncha a registered dealer

vide RC. No. WGL/09/1/2440/95-96 under

APGST Act and assesses on the rolls of

Commercial Tax Officer, Kothagudem.

They obtained G2 license vide G2

WGL/09/1/23/2001-02 from Commercial Tax

Officer, Kothagudem to purchase raw

materials, consumable, sub-assembly parts

and packing materials at concessional rates for

use in the manufacture or processing the

goods in side the state under Section 5B of the

APGST Act.

In terms of G. O. Ms. No. 496, Rev.(CT-II)

Dept., 17.07.2001, the commodity "CEMENT"

was made ineligible to purchase within the

state of AP at concessional rate of tax against

Form-G under Section 5B of the APGST Act.

In spite of the fact that M/s. Gammon

India Limited, Paloncha had effected

purchases of CEMENT from local registered

dealers at concessional rate of tax against

Form-G as ascertained from the Deputy

Commissioner (CT), Nalgonda for the year

2002-03 as detailed below.

Name of the Seller : Sugar Cement

Ltd., Matampally

Amount : Rs.29,26,200.00

Thus, it is proved beyond doubt that M/s.

Gammon India Limited, Paloncha had falsely

issued Form-G and claimed reduced rate of tax

from the sellers.

Therefore, it is proposed to levy a penalty

of Rs.23,40,960 (Rupees Twenty Three Lakhs

Forty Thousand Nine Hundred and Sixty only)

being five times the tax due on the above

respective transactions for the year 2002-03

under Section 7A(2)(ii) of APGST Act.

Objections if any against the proposed

levy of penalty may be filed in person or

through authorized representative touching

upon all the material evidence before the

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undersigned with in (7) days of receipt of this

notice. Failing which proposed levy of penalty

will be confirmed without further notice.

ASSISTANT COMMISSIONER (CT)

(INTELLIGENCE AND LTU)

WARANGAL DIVISION, WARANGAL.

To

M/s. Gammon India Limited,

Paloncha."

The appellant, after a few weeks, received two more

notices PR No. 1/2005 and PR No. 2/2005 on 12.4.2005

from the Assistant Commissioner, Commercial Taxes. In

these notices also it is incorporated that the appellant

had falsely issued Form-G and claimed reduced rate of

tax from the sellers.

The appellant also received a letter dated 19th

September, 2005 from the I/C Executive Engineer, I &

CADD, Irrigation Division, Bhadrachalam asking the

appellant to get clearance of sales tax due for

Rs.4,06,83,207/- from the Dy. Commissioner (CT)

Warangal Division, Warangal and produce the clearance

certificate.

The Andhra Pradesh Value Added Tax Act (for short

A.P.V.A. Tax Act) came in force from 1st April, 2005 in the

State of Andhra Pradesh and consequently the A.P.G.S.

Tax Act was repealed.

The notices were issued to the appellant by the

Assistant Commissioner of Commercial Taxes,

respondent no.3, calling upon the appellant to explain

why maximum penalty of five times permitted under the

Act be not imposed for falsely issuing the G-2 form and

claiming reduced rate of tax from the sellers.

The proceedings were initiated under Section 7A(2)

(ii) of the A.P.G.S. Tax Act. The said Section reads as

under :

"7A(2)(ii). Burden of proof and liability of

the dealer to pay (tax and penalty) :

(1) xxx xxx xxx

(2) Where a dealer issues or produces a false

bill, voucher, declaration, certificate or other

document with a view to support or make any

claim that a transaction of sale or purchase

effected by him or any other dealer, is not

liable to be taxed or is liable to be taxed at a

reduced rate, the assessing authority shall on

detecting such issue or production, direct the

dealer issuing or producing such document to

pay as penalty:

(i) in the case of first such detection, three

times the tax due in respect of such

transaction; and

(ii) in the case of a second or subsequent

detection, five times the tax due in respect of

such transaction: Provided that before issuing

any direction for the payment of the penalty

under this section, the assessing authority

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shall give to the dealer an opportunity of

making representation against the levy of such

penalty."

In reply to the abovementioned notices, a detailed

objection petition was submitted by the appellant,

according to which none of the essential conditions

prescribed under Section 5B(2) of APGS Tax Act was

violated by the Appellant.

The Assistant Commissioner of Commercial Taxes

after considering the grievance of the appellant confirmed

the additional tax and penalty. The appellant has filed

the appeals before the Deputy Commissioner (Appeals)

against issuance of the notices which are pending

adjudication, but the appellant's prayer for staying the

penalty proceedings was declined.

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.

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.

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 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

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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."

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 \026 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

(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."

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

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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.

Mr. Jaideep Gupta, learned senior Advocate

appearing for the appellant, has drawn our attention to

M/s M.S. Shivananda v. Karnataka State Road

Transport Corporation and Ors. \026 (1980) 1 SCC 149. A

careful reading of the said judgment also leads to the

same conclusion that after repeal of the Act whether it

applies or not depends on the intention of the legislature

which is reflected by the language used in the

subsequent Act passed by the legislature. The Court

also observed in this case that if, however, the right

created by the statute is of an enduring character and

has vested in the person, then that right cannot be taken

away because the statute by which it was created has

been repealed.

Mr. Gupta further submitted that liability arises

only after it is quantified in accordance with law. In the

instant case, unless the liability has not been properly

quantified in accordance with the A.P.G.S. Tax Act, the

same cannot be imposed. We have examined the

contention of Mr. Gupta in the light of M/s M.S.

Shivananda's case (supra), but on proper analysis of

the aforementioned judgment, we do not find any merit in

the submission of the learned counsel for the appellant.

Mr. Anoop G. Chaudhary, the learned senior

Advocate appearing for the respondent submitted that

the liability is incurred from the point when the forged

documents have been filed by the appellant and not from

the time when the show cause notice was issued.

Mr. Choudhary further submitted that in the matter

of this nature, the tax collecting authority has no option

but to impose penalty in accordance with the statute.

Mr. Choudhary also submitted that the respondent not

only had the jurisdiction to initiate and complete the

proceedings in the repealed Act but the penalty imposed

by him was also clearly in consonance with the

provisions of the Act.

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 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.

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.

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

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judgment so as to create a vested right.

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.

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.

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.

In England, to obviate such result a practice was

developed to insert a saving clause in the repealing

statute with 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:

38. Effect of repeal in future Acts. \026

(I) 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 \026

(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, forfeiture, or

punishment may be imposed, as if the

repealing Act had not been passed."

The legal position dramatically changed after

incorporation of Section 38 (2) in the English

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Interpretation Act, 1889. The following case is

illustrative of the change which took place after

incorporation of the said provision.

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."

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.

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 legislation, invalidates the

previous repeal and restores the statute to effective

operation.

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.

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

145 Pa.Super. 92 \026 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.

In State vs. Bemis \026 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.

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

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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.

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 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.

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.

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.

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

Virgin Islands \026 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."

The legal position in Australia is also almost similar.

The Interpretation Act of 1984 of Australia also has

similar provisions. The relevant portion of Section 37(1)

of the Act reads as under:

"37(1) of the Interpretation Act provides:

"Where a written law repeals an

enactment, the repeal does not, unless the

contrary intention appears \026

...

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(b) affect the previous operation of the

enactment repealed or anything

duly done or suffered under that

enactment;

(c) affect any right, interest, title, power

or privilege created, acquired,

accrued, established or exercisable

or any status or capacity existing

prior to the repeal;

...

(f) affect any investigation, legal

proceeding or remedy in respect of

any such right, interest, title, power,

privilege, status, capacity, duty,

obligation, liability, burden of proof,

penalty or forfeiture,

and any such investigation, legal proceeding or

remedy may be instituted, continued, or

enforced, and any such penalty or forfeiture

may be imposed and enforced as if the

repealing written law had not been passed or

made."

37(2) The inclusion in the repealing provisions

of any enactment of any express saving with respect

to the repeals effected thereby shall not be taken to

prejudice the operation of this section with respect

to the effect of those repeals."

Analysis of the provisions and some decided cases

of England and America reveal the existence of similar

provisions and interpretation in the respective countries.

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 \026

(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

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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."

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.

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.

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 Art. 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 considered that there was no legal objection to the

continuance of the prosecution.

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 \026 (1955) 1 SCR 893. Respondent Mohar

Singh filed a claim as an evacuee under the East Punjab

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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.

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 unless the new legislation manifests an

intention incompatible with or contrary to the provisions

of the section.

In the case of Brihan Maharashtra Sugar

Syndicate vs. Janardan \026 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."

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

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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 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.

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.

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 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.

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

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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.

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 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.

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.

In the case of Munshilal Beniram Jain Glass

Works vs. S. P. Singh \026 (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.

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 repealing enactment.

If a contrary intention appears from the repealing

Statute, that prevails.

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

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object of a repealing and amending Act is to 'excise dead

matter, prune off superfluities and reject clearly

inconsistent enactments'.

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.

In Commissioner of Income Tax vs. Shah Sadiq

and Sons \026 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 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.

In M/s Gurcharan Singh Baldev Singh v.

Yashwant Singh and Ors. \026 (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.

In Gajraj Singh and Others vs. State Transport

Appellate Tribunal and Others \026 (1997) 1 SCC 650, a

permit under Section 47(3) of the Motor Vehicles Act,

1939 was granted to the appellant for a period of 3 years.

The Motor Vehicles Act, 1988 came into force with effect

from 1.7.1989. The question arose whether the renewal

of the permit of the appellant granted under the repealed

Act is a permit under the Act and its operation was saved

by Section 217(2)(a) read with sub-section (4) thereof.

Therefore, the second renewal granted under Section 81

was valid in law. There was no need for the appellant to

obtain a fresh permit under the Act as the renewal is a

continuation of the original permit which is a vested

right. The effect of saving provisions in Section 217(2) (a)

is to allow all the permits granted under the Repealed Act

to continue after renewal under the Act. Section 217(2)

(a) and sub-section (4), thus, obviate the need to obtain

fresh permit under the Act and, therefore, it would be

unnecessary. According to the appellant, the Act is not

intended to lay down that after the Act came into force,

all the holders of stage carriage permits granted under

the Repealed Act would be required to obtain fresh

permits under the Act. Section 6 of the General Clauses

Act, 1897 read with Sections 217(2) (a) and (4) saves

operation of all those permits which were alive when the

Act came into force. Consequently, renewals granted

under Section 81 were valid.

In Gajraj Singh's case (supra), the Court observed

that the proceedings under the Repealed Act would be

continued and concluded under the Act as if the Act was

not enacted. The Court observed that four things would

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emerge from its operation. One, there must exist a

corresponding provision under the Act pari materia with

the Repealed Act; two, the order of permit granted must

exist and be in operation on the day on which the Act

had come into force; three, it must not be inconsistent

with the provisions of the Act and, fourth, the positive act

should have been done before 1.7.1989. Positive Act

should have been done before the repeal of the Act to

further secure any right. All the four conditions should

be satisfied as conditions precedent for application of

Section 6 of the General Clauses Act.

Number of authors have commented on the

'Doctrine of Repeal'. Craies in his book on Statute Law

stated that in English acts passed after 1889 certain

savings are implied by statute in all cases of express

repeal, unless a contrary intention appears in the

repealing Act. The author has stated in his book that it

had been usual before 1889 to insert provisions to the

effect above stated in all statutes by which express

repeals were effected. The result of this enactment is to

make into a general rule what had been common

statutory form, and to substitute a general statutory

presumption as to the effect of an express repeal for the

canons of construction hitherto adopted.

In Halsbury's Laws of England, Fourth Edition the

word 'repeal' has been defined as under :-

"To repeal an Act is to cause it to cease to be a

part of the corpus juris or body of law. To

repeal an enactment contained in an Act is to

cause it to cease to be in law a part of the Act

containing it. The general principle is that,

except as to transactions past and closed, an

Act or enactment which is repealed is to be

treated thereafter as if it had never existed.

However, the operation of the principle is

subject to any savings made, expressly or by

implication, by the repealing enactment, and

in most cases it is subject also to the general

statutory provisions as to the effects of repeal."

When an Act is repealed then it is treated as

revoked or abrogated, and removed from what is

popularly known as the Statute Book.

The provisions of English Interpretation Act and

Indian General Clauses Act are pari materia as far as

Section 38 of English Act and Section 6 of the Indian Act

are concerned. According to Halsbury's Laws of England

(supra), where any Act after 1889 repeals and reenacts,

with or without modification, a previous enactment, then,

unless the contrary intention appears, any reference in

any other enactment to the enactment so repealed must

be construed as a reference to the provision reenacted.

Crawford in his book on Interpretation of Law stated

that an express repeal will operate to abrogate an existing

law, unless there is some indication to the contrary, such

as a saving clause. Even existing rights and pending

litigations, both civil and criminal, may be affected

although it is not an uncommon practice to use the

saving clause in order to preserve existing rights and to

exempt pending litigation.

In the said book it is further stated that often the

legislature instead of simply amending a pre-existing

statute, will repeal the old statute in its entirety and by

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the same enactment reenact all or certain portions of the

pre-existing law. Of course, the problem created by this

sort of legislative action involves mainly the effect of the

repeal upon rights and liabilities which accrued under

the original statue. Are those rights and liabilities

destroyed or preserved? The authorities are divided as to

the effect of simultaneous repeals and reenactments.

Some adhere to the view that the rights and liabilities

accruing under the repealed act are destroyed, since the

statute from which they sprung has actually terminated,

even though for only a very short period of time. Others,

and they seem to be in the majority, refuse to accept this

view of the situation, and consequently maintain that all

rights and liabilities which have accrued under the

original statute are preserved and may be enforced, since

the reenactment neutralizes the repeal, thereby

continuing the law in force without interruption.

Logically, the former attitude is correct, for the old

statute does cease to exist as an independent enactment,

but all practical considerations favour the majority view.

This is so even where the statute involved is a penal

legislation.

Francis Bennion in his book on Statutory

Interpretation (2nd Edn.) says that where an English Act

passed after 1878, repeals and reenacts the enactment

(with or without modification) then, unless the contrary

intention appears, anything done, or having effect as if

done, under the enactment repealed, insofar as it could

have been done under the provision reenacted, has effect

as if done under that provision.

G. P. Singh in his book on 'Principles of Statutory

Interpretation', 2006 Edition enumerated the effect of

clauses (c) to (e) of Section 6 of the General Clauses Act is

to prevent the obliteration of a statute in spite of its

repeal to keep intact rights acquired or accrued and

liabilities incurred during its operation and permit

continuance or institution of any legal proceedings or

recourse to any remedy which may have been available

before the repeal for enforcement of such rights and

liabilities.

Sutherland in his book on Statutory Construction

(3rd Edn.) Vol. I by Horack stated under common law

principles of construction and interpretation all rights,

liabilities, penalties, forfeitures and offences which are of

purely statutory derivation and unknown to the common

law are effaced by the repeal of the statute which granted

them, irrespective of their accrual. Likewise, where a

common law principle is abrogated, its effective existence

is destroyed both as to past actions and to pending

proceedings. However, a right of a common law nature

which is further embodied in statutory terms exists as an

enforceable right exclusive of the statute declaratory of it,

and therefore the right is not expunged by the repeal of

the statute.

Since the effect of a repeal is to obliterate the

statute and to destroy its effective operation in future, or

to suspend the operation of the common law, when it is a

common law principle which is abrogated, any

proceedings which have not culminated in a final

judgment prior to the repeal are abated at the

consummation of the repeal. When, however, the repeal

does not contemplate either a substantive common law or

statutory right, but merely the procedure prescribed to

secure the enforcement of the right, the right itself is not

annulled but remains in existence enforced by applying

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the new procedure.

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.

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 whether it intended to preserve all

the rights and liabilities of a repealed statute intact or

modify or to obliterate them altogether.

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.

We have been informed that the appeals are

pending adjudication before the concerned Authority.

The High Court has directed the appellant to pay 40% of

the total amount which has been imposed in the four

notices issued to the appellant.

We have heard the learned counsel for the parties.

In the facts and circumstances of the case, we deem it

appropriate to modify the directions given by the High

Court and direct the appellant to pay a lump sum of

Rs.1.5 crores within four weeks pending adjudication of

appeals emanating from all the four notices before the

Appellate Tribunal. In case the amount as directed is

paid by the appellant within a period of four weeks, the

order of attachment issued by the respondents shall not

be given effect to during the pendency of the proceedings

before the Appellate Tribunal. On appellant's depositing

the said amount within the stipulated time the tribunal

shall hear the appeals and decide them in accordance

with law.

Consequently, these Appeals are being disposed of

in terms of the directions given in the preceding

paragraph. In the facts and circumstances of the case,

we direct the parties to bear their own costs.