LAXMI NARAYAN SAHU, M/s P.K.M ERECTORS And M/s. MASCOT ENTRADE PVT. LTD. Versus UNION OF INDIA AND 2 ORS., THE COMMISSIONER CENTRAL GOODS AND SERVICES TAX DIBRUGARH, THE ASSTT. COMMISSIONER CENTRAL GOODS AND SERVICE TAX, THE UNION OF INDIA AND 2 ORS, THE COMMISSIONER CENTRAL GST AND CENTRAL EXCISE GHY-5, THE ADDL. COMMISSIONER CENTRAL GST AND CENTRAL EXCISE GHY-5 AND THE UNION OF INDIA and 2 ORS., THE COMMISSIONER GST and CENTRAL EXCISE, THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE – 2018 (10) TMI 904 – GAUHATI HIGH COURT – [2019] 60 G S.T.R. 14 (Gau), 2018 (19) G. S. T. L. 626 (Gau.) – Validity of demand of service tax after migration to GST Regime – Proceedings initiated u/s 73(i) of the Finance Act of 1994 – Applicability of Section 6 of the General Clauses Act – whether omission of the provisions of a statue render any proceeding initiated under it to be not maintainable any further? – Scope of Section 173 of the Central Goods and Service Tax Act, 2017
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Held that:- Fro
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pon the proposition laid down in Rayala Corporaion (P) Ltd. and in Kolhapur Canesugar Works Ltd. would also have to be looked from the perspective of the provisions of Section 6-A of the General Clauses Act.
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It is the contention of Mr. KN Choudhury, learned Senior counsel that the pronouncement in Rayala and Kolhapur being a decision by the Constitution Bench would prevail over the pronouncement in FibreBoard Pvt. Ltd. – The said contention of the learned Senior Counsel for the petitioner would have to be looked into from the point of view as to whether the decision rendered in Fibre Board Pvt. Ltd. is a decision which is in conflict with the view expressed in Rayala Corporation (P) Ltd and in Kolhapur Canesugar Works Ltd.
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We take note of paragraph 30 of FibreBoard Pvt. Ltd, wherein the Supreme Court was conscious of the fact that in the event, a conflicting view is to be taken to an earlier pronouncement by a larger bench, it requires a reference to a larger bench. While d
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pressed in Fibre Board Pvt. Ltd., are also views under Article 141 of the Constitution of India and are binding on the High Court.
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Paragraph 37 of Kolhapur Canesugar Works Ltd. provides that if a statute stood omitted with a savings clause, the savings clause would not render it impermissible for the proceedings initiated/to be initiated under Chapter V of the Finance Act of 1994, which stood omitted by Section 173 of the CGST Act of 2017 to be continued – A conjoint reading of the provisions laid down in paragraph 37 of Kolhapur Canesugar Works Ltd. and Section 173 and 174(2)(e) would lead to a conclusion that although Chapter V of the Finance Act of 1994 stood omitted under Section 173, but the savings clause provided under Section 174(2)(e) will enable the continuation of the investigation, enquiry, verification etc., that were made/to be made under Chapter V of the Finance Act of 1994.
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The writ petition to be devoid of any merit and the relief sought for interfering wit
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nce Act of 1994, for failure on the part of the petitioners from paying the service tax that are leviable upon them. In all the writ petitions, the demand-cum-show cause notices are assailed on the ground that in view of the provisions of Section 173 of the Central Goods and Service Tax Act, 2017 ((for short, CGST Act of 2017), further proceedings that were initiated under Section 73(i) of the Finance Act of 1994 are no longer sustainable. 3. In the circumstance, a common question of law is involved in all the writ petitions, a determination of which would lead to an adjudication of the dispute raised therein, the writ petitions are taken up together for a final consideration. 4. Mr. KN Choudhury, learned Senior counsel for the petitioners raises an issue that Section 173 of the CGST Act of 2017 having omitted chapter V of the Finance Act of 1994, no proceeding initiated under Chapter V can further be continued, in view of the legal implication of a statutory provision being omitted, a
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n 6 of the General Clauses Act in respect of an omission of a statute cannot be said to be a ratio decidendi at all and it is really in the nature of an obiter dicta. 6. Mr. KN Choudhury, learned Senior counsel for the petitioners in order to substantiate the legal effect of an omission of a statute on further maintainability of any proceeding initiated under it relies upon the following provisions as laid down by the Supreme Court in the referred decisions: (i). Paragraph-17 and 18 of Messrs Rayala Corporation (P) Ltd (supra): 17. Reference was next made to a decision of the Madhya Pradesh High Court in State of Madhya Pradesh v. Hiralal Sutwala(1), but, there again, the accused was sought to be prosecuted for 'an offence punishable under an Act on the repeal of which section 6 of the General Clauses Act had been made applicable. In the case before us, s. 6 of the General Clauses Act cannot obviously apply on the omission of R. 132A of the D.I.Rs. for the two obvious reasons that
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epealed statutes and not to expiring statutes, and that the general rule in regard to the expiration of a temporary statute is that unless it contains some special provision to the contrary, after a temporary Act has expired, no proceedings can be taken upon it and it ceases to have any further effect. Therefore, offences committed against temporary Acts must be prosecuted and punished before the Act expires and as soon as the Act expires any proceedings which are being taken against a person will ipso facto terminate. The Court cited. with approval the decision in the case of Wicks v. Director of Public Prosecutions(4), and held that, in view s. 1 (4) of the Defence of India Act, 1939, as amended by Ordinance No. XII of 1946, the prosecution for a conviction for an offence committed when the Defence of India Act was in force, was valid even after the Defence of India Act had ceased to be in force. That case is, however, distinguishable from the case (1) A.I.R. 1959 M.P. 93. (2) [1947]
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ll known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is ] introduced without a saving clause in favour of pending proceedi
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a few cases arising prior to 1.4.1989. Such cases may be few and far between. Hence we find this is not an appropriate case for reference to the larger Bench. 9. Net result of this discussion is that the view taken by the High Court is not consistent with what has been stated by this Court in the two decisions aforesaid and the principle underlying Section 6 of the General Clauses Act as saving the right to initiate proceedings for liabilities incurred during the currency of the Act will not apply to omission of a provision in an Act but only to repeal, omission being different from repeal as held in the aforesaid decisions. In the Income Tax Act, Section 276DDstood omitted from the Act but not repealed and hence, a prosecution could not have been launched or continued by invoking Section 6 of the General Clauses Act after its omission. 7. Mr. SC Keyal, learned Assistant SGI in order to substantiate his contention that an omission of the provisions of a statue do not render any proceed
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corpn. (P) Ltd. for distinguishing the Madhya Pradesh High Court judgment. Ordinarily, both reasons would form the ratio decidendi for the said decision and both reasons would be binding upon us. But we find that once it is held that Section 6 of the General Clauses Act would itself not apply to a rule which is subordinate legislation as it applies only to a Central Act or Regulation, it would be wholly unnecessary to state that on a construction of the word repeal in Section 6 of the General Clauses Act, omissions made by the legislature would not be included. Assume, on the other hand, that the Constitution Bench had given two reasons for the non-applicability of Section 6 of the General Clauses Act. In such a situation, obviously both reasons would be ratio decidendi and would be binding upon a subsequent Bench. However, once it is found that Section 6 itself would not apply, it would be wholly superfluous to further state that on an interpretation of the word repeal , an omission
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obviously the word repeal in both Section 6 and Section 24 would, therefore, include repeals by express omission. The absence of any reference to Section 6-A, therefore, again undoes the binding effect of these two judgments on an application of the per incuriam principle. 34. Thirdly, an earlier Constitution Bench judgment referred to earlier in this judgment, namely, State of Orissa, v. M.A. Tulloch & Co. has also been missed the Court there stated: (SCR pp. 483-84 : AIR pp. 1294-95, para 21) … Now, it 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 principals of the law that there is no distinction or difference between an express provision and a provision which is necessarily impl
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om the rule that, in exceptional instances, where by obvious inadvertence or oversight a judgment fails to notice a plain statutory provision or obligatory authority running counter to the reasoning and result reached, it may not have sway of binding precendents. It should be a glaring case, an obtrusive omission. No such situation presents itself here and we do not embark on the principle of judgment per incuriam. (emphasis supplied) An interesting applications of the said principle is contained in state of U.P. v. Synthetics and Chemicals Ltd., (1991) 4 SCC 139 : (1991) 3 SCR 64, where a Division Bench of this Court held that once particular conclusion of a Bench of seven Judges [Synthetics and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109] was per incuriam – see: the discussion at SCR pp.80, 81 and 91 : SCC pp. 151, 152 and pp.161-162, paras 36 to 42 of the said judgment. By necessary implication the same intention as that which would attend the case of an express repeal. Where
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d the rival contentions raised by the parties. The contention of the petitioners that Section 173 of the CGST Act of 2017 having omitted the provisions of Chapter V of the Finance Act of 1994, no proceeding initiated under Chapter V can further be continued, is solely based upon the proposition laid down by the Supreme Court in paragraph 17 of Rayala Corporaion (P) Ltd (supra), as also paragraph 37 of Kolhapur Canesugar Works Ltd. (supra). In paragraph 17 of Rayala Corporaion (P) Ltd (supra), it has been held that Section 6 of the General Clauses Act is inapplicable in the case of omission of a statute for two reasons that Section 6 applies only in respect of repeals and not omissions and it applies when the repeal is of a Central Act or Regulation and not that of a Rule. Reliance has also been placed upon paragraph 18 of Rayala Corporaion (P) Ltd (supra), wherein a conclusion of the Allahabad High Court in the case of Seth Jugmendar Das and Others is referred to the effect that Sectio
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ion 6 of the General Clauses Act and, accordingly, if a provision of a statute is unconditionally omitted without a saving clause in favour of the pending provisions, all actions must stop where the omissions finds them and if the final relief had not been granted before the omission went into effect, it cannot be granted afterwards. 12. In this regard, it may be taken note of that in page 958 of the Principles of Statutory Interpretation by Justice GP Singh, it had been provided that the passing observation in Rayala Corporaion (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra) that Section 6 of the General Clauses Act only applies to repeals and not to omissions, needs a reconstruction as omission of a provision results in abrogation or obliteration of that provision in the same way as it happens in a repeal. 13. The aforesaid aspect that Section 6 of the General Clauses Act applies only to repeals and not to omissions, and, therefore, in the event, a statute is omitted the
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ld that if Section 6 of the General Clauses Act would not be applicable to a Rule which is a subordinate legislation and it applies only to a Central Act or Regulations, it would also be wholly unnecessary to state that on a construction of the word repeal in Section 6 of the General Clauses Act, omission made by the legislator would not be included. In paragraph 31 of Fibre Board Pvt. Ltd. (supra) it was also held that both the reasons stated in Rayala Corporaion (P) Ltd (supra) that Section 6 of the General Clauses Act does not apply to a Rule but only apply to a Central Act or Regulation and that Section 6 itself would apply only to a repeal and not to omission would have been considered as a ratio decidendi, but once it was found that Section 6 itself would not apply, therefore, it would be superfluous to state that the interpretation of the word repeal would not include an omission. Accordingly, the Supreme Court was of the view that the second reasoning in Rayala Corporaion (P) L
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per incuriam. 18. From the propositions laid down in Fibre Board Pvt. Ltd (supra) it is discernible that the earlier propositions laid down Rayala Corporaion (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra), to the extent that Section 6 of the General Clauses Act applies only in respect of a repeal and not to omission of an enactment is an obiter dicta, which is not binding. Secondly, it also cannot be said that the repeal of an enactment does not include the omission and to that extent, the law that is applicable to the repeal of an enactment would also be applicable to that of an omission and no distinction can be made between the two. Thirdly, the proposition as regards inapplicability of Section 6 of the General Clauses Act in respect of an omission of an enactment resulting in an impermissibility to continue further a proceeding that had been initiated under omitted enactment, merely based upon the proposition laid down in Rayala Corporaion (P) Ltd (supra) and in Kolha
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or the petitioners by relying upon the pronouncement of the Supreme Court in State of Uttar Pradesh Vs. Ram Chandra Trivedi reported in (1976) 4 SCC 32 wherein in paragraph 22, it has been held as: It is also to be borne in mind that even in cases where a High Court finds in conflict between the views expressed by larger and smaller benches of this Court, it cannot disregard or skirt the views expressed by the larger bench. 20. Accordingly it is the contention of Mr. KN Choudhury, learned Senior counsel that the pronouncement in Rayala and Kolhapur being a decision by the Constitution Bench would prevail over the pronouncement in FibreBoard Pvt. Ltd.(supra). The said contention of the learned Senior Counsel for the petitioner would have to be looked into from the point of view as to whether the decision rendered in FibreBoard Pvt. Ltd. is a decision which is in conflict with the view expressed in Rayala Corporation (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra). 21. To th
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auses Act would be applicable only in respect of an appeal and not that of an omission cannot be said to be a ratio decidendi at all and that it really is in the nature of an obiter dicta. 23. From the aforesaid provisions in the Fibre Board Pvt. Ltd. (supra), it is apparent that the propositions of law laid down in Rayala Corporation (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra) had in fact been clarified and therefore it cannot be a pronouncement in conflict that the pronouncement in Rayala Corporation (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra). 24. Whenever there is a conflict between the decision by a larger bench and that of a smaller bench, as provided in paragraph 22 of Ram Chandra Trivedi (supra) a view expressed by the larger bench is to be taken into consideration by ignoring the view taken by the smaller bench. But the said proposition would have to be viewed from a different perspective when the provisions of the smaller bench clarifies the
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ment, further proceeding initiated under the omitted Act is no longer sustainable it has been provided that if a provision of a statute is unconditionally omitted without a saving clause in favour of a pending proceeding, all actions must stop, where the omission finds them and if the final relief was not granted before the omission went into effect, it cannot be granted afterwards. 27. But in paragraph 37, it was further provided that the operation of repeal or deletion as to the future and the past largely depend upon the savings applicable. It also provided that in a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is entrusted without the savings clause in favour of the pending proceedings, it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue, although a fresh proceeding for the same purpose may be initiated under the new provision. 28. In o
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ection 174(2) of the CGST Act of 2017 provides that the repeal of the said Acts and the amendment of the Finance Act of 1994 (Act 32 of 1994) to the extent mentioned in Section 174(1) or 173, as the case may be, shall not, amongst others, effect any investigation, enquiry or verification (including scrutiny and audit), assessment proceedings, adjudication or any other legal proceeding or recovery of arrears etc., and all such proceedings may be instituted, continued or enforced as if the Act had not been so amended or repealed. 30. The Constitution Bench of the Supreme Court in Kolhapur Canesugar Works Ltd. (supra) had also referred and followed the earlier pronouncement of the Constitution Bench in Rayala Corporation (P) Ltd (supra) and, therefore, the proposition laid down in paragraph 37 of Kolhapur Canesugar Works Ltd. (supra) can either be a clarification or it can be argued to be in conflict with the pronouncement in paragraph 17 of Rayala Corporation (P) Ltd (supra). Even if it
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c., that was/to be instituted under Chapter V of the Finance Act of 1994. A conjoint reading of Section 173 and 174(2)(e) would show that while bringing an omission to the provision of Chapter V of the Finance Act of 1994, a savings clause for continuing with the proceedings initiated/to be initiated was also duly provided. Existence of the savings clause in respect of omission of Chapter V of the Finance Act of 1994 clearly brings it within the purview of the provisions laid down by the Constitution Bench of the Supreme Court in paragraph 37 of Kolhapur Canesugar Works Ltd. (supra). 32. As already elucidated hereinabove, paragraph 37 of Kolhapur Canesugar Works Ltd. (supra) provides that if a statute stood omitted with a savings clause, the savings clause would not render it impermissible for the proceedings initiated/to be initiated under Chapter V of the Finance Act of 1994, which stood omitted by Section 173 of the CGST Act of 2017 to be continued. 33. A conjoint reading of the pro
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