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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.