Exercise of sales tax revisional power after repeal of Act unsustainable-SC. If new Act manifests different intention General Clauses Act stands excluded.
ABCAUS Case Law Citation:
ABCAUS 2073 (2017) (09) SC
The Substantial Question of Law framed/urged for determination:
A common question of law in the present batch of 36 appeals was whether the exercise of revisional power under Section 40 of the Haryana General Sales Tax Act, 1973 (hereinafter referred to as ‘the Act of 1973’) after its repeal on 1.4.2003, by the Haryana Value Added Tax, 2003 (hereinafter referred to as ‘the Act of 2003’), was sustainable.
Important Case Laws Cited/relied upon by the parties:
Raymond Ltd. and Anr. vs. State of Chhattisgarh & Ors., (2007) 3 SCC
Swastik Oil Mills Ltd vs. H.B. Munshi, Deputy Commissioner of Sales Tax, Bombay, 1968 (2) SCR 492
Gammon India Ltd. vs. Special Chief Secretary and Ors., (2006) 3 SCC
Brief Facts of the Case:
The all 36 appeals were heard together and disposed by a common order. The sales tax assessment of one of the respondent, for the assessment year 1998-99, was completed and refund ordered on 12.05.2000, under the Act of 1973. Subsequently, the former Act was repealed by the Act of 2003 on 01.04.2003. A show cause notice was issued to the respondent on 07.06.2004 regarding the refund ordered earlier, in exercise of suo-moto revisional powers under Section 40 of the Act of 1973. By order dated 12.07.2004, the respondent was held liable for recovery of Rs. 65,35,632/-
The order for recovery was challenged before the High Court. The High Court held that resort to Section 40 of the Act of 1973, after coming into force of the new Act on 01.04.2003 was unsustainable, as the repeal and saving clause in Section 61 of the Act of 2003, saved only pending proceedings under the former. Since there were no proceedings pending against the respondent under the repealed Act, on the relevant date, the proceedings thereunder could not be sustained or justified by reference to Section 4 of the Punjab General Clauses Act, 1898.
Contention of the appellant State:
It was submitted that the refund having been wrongly obtained, resort to suo-moto revision under Section 40 of the Act of 1973, exercised within the limitation of five years, was justified. The wrong benefit of refund clearly fell within the meaning of the expression privilege, obligation or liability acquired or incurred under the repealed Act, and was therefore saved by Section 4 of the Punjab General Clauses Act, 1898.
it was contended that the revisional power conferred on the revenue in a fiscal legislation should not be construed as a stand-alone provision, but as a provision intended to enable the revisional authority to ensure that the assessment had been carried out in accordance with law.
Contentions of the Respondent Assessee.
It was submitted that the repeal and saving clause in Section 61 of the Act of 2003 exclusively saved pending proceedings only. The application of the Punjab General Clauses Act 1898, therefore, stood excluded by the expression of a different intention in the repealing Act. The legislature subsequently amended Section 61 of the Act of 2003, suitably on 02.04.2010.
Observations made by the Supreme Court:
The Supreme Court observed that a simple repeal of an Act leaves no room for expression of a contrary opinion. However, if the repeal is followed by a fresh enactment on the same subject, the applicability of the General Clauses Act would undoubtedly require an examination of the language in the new enactment to see if it expresses a different intention from the earlier Act. The enquiry would necessitate an examination if the old rights and liabilities are kept alive or whether the new Act manifests an intention to do away with or destroy them. If the new Act manifests a different intention, the application of the General Clauses Act will stand excluded.
The Supreme Court observed that there were no proceedings pending against the respondent under the Act of 1973 when the new Act came into force on 01.04.2003. The suo-moto revisional power under Section 40 of the former Act was exercised on 07.06.2004. The repeal and saving clause in Section 61 of the Act of 2003, saved only pending proceedings under the repealed Act. The intendment clearly was that matters which stood closed under the Act of 1973 had to be given a quietus and could not be reopened.
The Supreme Court opined that the assessment under the Act of 1973 having been completed and refund ordered, the exercise of suo-moto revisional powers under Section 40 of the same after repeal was clearly unsustainable in view of the contrary intention expressed under Section 61 of the Act of 2003, saving only pending proceedings. Section 4 of the Punjab General Clauses Act, 1858 will have no application in view of the contrary intendment expressed in Section 61 of the repealing Act. Had a contrary intention not been expressed, the issues arising for consideration would have been entirely different.
The Supreme Court further observed that the legislature, in its wisdom having noticed the limitation and constraints under Section 61 of the Act of 2003, made necessary amendments to the same by Act No. 3 of 2010 on 02.04.2010. Any interpretation saving the revisional power under Section 40 of the Act of 1973, without any proceedings pending on the relevant date, by resort to Section 4 of the Punjab General Clause Act, 1858 would render the amendment redundant, and an exercise in futility, something which the legislature never intended to do. Such an incongruous interpretation leading to absurdity has to be avoided.
The order of the High Court was upheld