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2010 DIGILAW 1183 (ALL)

DHARMA RICE MILL v. STATE OF U. P.

2010-04-13

PANKAJ MITHAL, RAJES KUMAR

body2010
JUDGMENT By the Court.—Challenge in the instant writ petition is to the undated show cause notice (Annexure - 5/6 to the writ petition) whereby the petitioner has been called upon to appear on 14.10.2009 and to show cause why the assessment order dated 24.3.2006 may not be revised in exercise of power under Section 10-B of the U.P. Trade Tax Act. 2. The matter would not have detained us much except for the reason that the impugned notice is said to be without jurisdiction. 3. Sri N.C.Gupta, learned counsel for the petitioner has argued that the U.P. Trade Tax Act as a whole has been repealed by virtue of Section 81 of the Value Added Tax Act w.e.f. 1.1.2008 and therefore, no such notice could have been issued under Section 10-B of the U.P. Trade Tax Act. 4. Sri S.P. Kesarwani, learned Additional Chief Standing Counsel on the other hand, contended that in view of Section 81(6) of the U.P. Value Added Tax Act read with Section 6 of the U.P. General Clauses Act the power to revise the assessment order in exercise of power under Section 10-B of the U.P. Trade Tax Act stands saved in relation to the assessment in question. 5. The dispute relates to the assessment year 2003-04. The assessment order has been passed on 24.3.2006. It is sought to be revised by the Commissioner in exercise of power under Section 10-B of the U.P. Trade Tax Act even though the said Act has been repealed and replaced by the U.P. Value Added Tax Act with effect from 1.1.2008. 6. No doubt U.P. Trade Tax Act has been repealed with effect from 1.1.2008 but the said repeal is not a repeal simplicitor having the effect of obliterating completely from the record the said Act, as if it has never been passed. Ordinarily a repeal of an enactment means as if it has never come into existence. However, the situation is different where the repeal takes place with a saving clause simultaneously with re-enactment of a similar statute. In the aforesaid situation, it has to be examined as to what provisions or rights of the parties under the repealed enactment have been saved and further in what manner they have been re-enacted and brought about in the new Act. 7. In the aforesaid situation, it has to be examined as to what provisions or rights of the parties under the repealed enactment have been saved and further in what manner they have been re-enacted and brought about in the new Act. 7. The object of a saving clause is to ensure that the repeal of any provision or enactment may not result in creating a vacuum as it may cause serious difficulties as on one hand the pre-existing enactment may disappear while on the other hand the new enactment may not be in force or if in force may not contain sufficient provisions to deal with the rights and remedies of the parties which may have accrued to them under the previous enactment. So the purpose of using the saving clause is to preserve certain existing rights, remedies, privileges which may have accrued to any party under the repealed Act, from destruction. 8. In is only with the above intendment, a practice was developed to insert a saving clause while repealing an existing statute but when the said practice was not found to be very handy, instead of providing for a saving clause every time, a provision of general implication providing for a saving clause was made in the General Clauses Act. Section 6 of U.P. General Clauses Act is on the same lines and is para materia with the above provision of the General Clauses Act. 9. Section 81 of the U.P. Value Added Tax Act while providing for the repeal of the U.P. Trade Tax Act not only saves its applicability to certain extent in a given situation but also provides that notwithstanding the repeal the application of Section 6 of the U.P. General Clauses Act would not stand affected. 10. The aforesaid provisions of Section 81 of the U.P. Value Added Tax Act and Section 6 of the U.P. General Clauses Act reads as follows: “81. Repeal and saving.—(1) The Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948) (hereinafter in this section referred to as the repealed enactment) is hereby repealed. 10. The aforesaid provisions of Section 81 of the U.P. Value Added Tax Act and Section 6 of the U.P. General Clauses Act reads as follows: “81. Repeal and saving.—(1) The Uttar Pradesh Trade Tax Act, 1948 (U.P. Act No. XV of 1948) (hereinafter in this section referred to as the repealed enactment) is hereby repealed. (2) Notwithstanding such repeal,— (a) any notification, rule, regulation, order or notice issued, or any appointment or declaration made, or confiscation made, or any penalty or fine imposed, any forfeiture, cancellation or any other thing done or any action taken under the repealed enactment, and in force immediately before such commencement shall, so far as it is not inconsistent with the provisions of this Act, be deemed to have been issued, made granted, done or taken under the corresponding provisions of this Act. (b) any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act, shall not be affected and manufacturing units enjoying benefit of exemption from payment of tax under Section 4-A of the repealed Act or the units enjoying facility of moratorium for payment of tax under Section 8(2-A) of the said Act shall be entitled to claim moratorium for payment of tax in accordance with provisions of Section 42. (3) Any officer, authorised by the Commissioner under the repealed enactment, to exercise powers under Section 10-B and sub-section (6) of Section 13-A thereof, shall be deemed to have been authorised by the Commissioner to exercise such powers under Section 56 and sub-section (7) of Section 48 respectively. (4) Any order made or direction issued by the State Government or by the Commissioner under the repealed Act, for carrying out purposes thereof, to the extent the same are not inconsistent with the provisions of this Act, shall be deemed to have been issued under the provisions of this Act. (5) Any security or additional security, furnished under the provisions of the repealed Act, shall be deemed valid for the purposes under this Act only upon furnishing an undertaking from the surety to this effect in the prescribed form and manner within thirty days from the date of the commencement of the Act: Provided that, in appropriate cases, the assessing authority may extend the time for furnishing undertaking from sureties. (6) The mention of particular matters in this section shall not be held to prejudice or affect general application of Section 6 of the Uttar Pradesh General Clauses Act, 1904, with regard to the effect of repeals.” “6. Effect of repeal.—Where any (Uttar Pradesh) 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 remedy, or any investigation or legal proceeding commenced before the repealing Act shall have come into operation in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such remedy may be enforced and any such investigation or legal proceeding may be continued and concluded, and any such penalty, forfeiture or punishment imposed as if the repealing Act had not been passed.” 11. A plain reading of the aforesaid provisions particularly, the language of Section 81(2)(b) as well as Section (6)(b) and (c) of the U.P. General Clauses Act clearly demonstrates that even though the U.P. Trade Tax Act as a whole has been repealed but the right, privilege or obligation acquired by any party under the repealed enactment stands unaffected and that such right or remedy be continued to be enforced as if the repealing Act has not been implemented. It is manifest that by virtue of Section 6 of the U.P. General Clauses Act, the rights, liabilities and remedies accrued under the repealed enactment stand protected unless a contrary intention is expressed or implied in the later enactment to obliterate the earlier state of law. 12. It is manifest that by virtue of Section 6 of the U.P. General Clauses Act, the rights, liabilities and remedies accrued under the repealed enactment stand protected unless a contrary intention is expressed or implied in the later enactment to obliterate the earlier state of law. 12. In the instant case, no contrary intention is shown to have been expressed, rather Section 81(3) of the U.P. Value Added Tax Act provides that the officer authorised by the Commissioner under the repealed Act to exercise the power under Section 10-B of the U.P. Trade Tax Act shall continue to exercise the revisional power conferred by Section 56 of the U.P. Value Added Tax Act. Therefore, the right to avail the statutory remedy of revision accrued under the repealed enactment also stands duly protected. 13. The power of revision under Section 56 of the new Act is analogous to the power of revision which was contained in Section 10-B of the repealed Act. Therefore, the power of revision under Section 10-B of the repealed Act which is sought to be exercised is traceable to the new Act and is exercisable by the same authority. 14. The repeal of the U.P. Trade Tax Act so far it relates to the revisional power under Section 10-B of the said Act is a misnomer as by the simultaneous re-enactment of the new Act substantially the same power of revision has been reaffirmed in the same manner and upon the same officer rendering the repeal as insignificant. 15. In an identical controversy in relation to A.P. General Sales Tax Act, 1957 which came up for consideration before the Apex Court in M/s Gammon India Ltd. v. Special Chief Secretary and others, JT 2006 (2) SC 494 on its being repealed by the A.P. Value Added Tax Act, 2005, which also contained virtually an identical provision regarding repeal and saving as in the U.P. Value Added Tax Act, a three Judges Bench after consideration in depth of the entire case law on the subject held that whenever there is a repeal of an enactment followed by a fresh legislation on the same subject the consequences laid down in Section 6 of the General Clauses Act will follow unless a different intention is expressed in the repealing statute. It was thus further held that the simultaneous repeal of the A.P. General Sales Tax Act and the enactment of the Value Added Tax clearly saved the earlier provisions and consequently the rights and liabilities accrued or incurred under the repealed Act which would continue even after the repeal. 16. Sri Gupta has placed reliance upon Udai Singh Dagar and others v. Union of India and others, (2007) 10 SCC 306 but we fail to understand how the said authority is of any help to him as it only reiterates and follows the principle of law laid down in M/s Gammon India Ltd. (supra) and do different interpretation on its basis can be culled out. 17. In view of aforesaid facts and circumstances, we are of the considered opinion that the U.P. Value Added Tax Act while repealing the U.P. Trade Tax Act in its entirety keeps alive the old rights, liabilities and the remedies under the repealed enactment and, as such, the impugned notice for revising the order of assessment is not without jurisdiction. However, it will be open for the petitioner to submit reply to the show cause notice and to contest the matter on merit before the authority concerned. 18. The writ petition as such lacks merit and is dismissed with no order as to costs. ————