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
Service Tax
2018 (10) TMI 904 – GAUHATI HIGH COURT – [2019] 60 G S.T.R. 14 (Gau), 2018 (19) G. S. T. L. 626 (Gau.)
GAUHATI HIGH COURT – HC
Dated:- 12-10-2018
Case No. : WP(C) 2059/2018, WP(C) 1868/2018, WP(C) 7729/2017
Service Tax
Mr. Justice Achintya Malla Bujor Barua
For the Petitioner : Mr. A K Gupta, Mr. S Chetia And Mr.M L Gope
For the Respondent : Asstt. S.G.I., Asstt.S.G.I. And Mr. B Sarma
JUDGMENT & ORDER (ORAL)
Heard Mr. K.N. Choudhury, learned senior counsel for th
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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, as laid down by the Supreme Court in its decision in Messrs Rayala Corporaion (P) Ltd., Vs. Director of Enforcement, New Delhi reported in 1969 (2) SCC 412 in paragraph Nos. 17 and 18 and in Kolhapur Canesugar Work Ltd. and Another -vs- Union of India and Others reported in (2000) 2 SCC 536 in paragraph 37, which was again reiterated in General Finance Co. and Another -vs- Assistant Commissioner of Income Tax, Punjab reported in (2002) 7 SCC 1.
5. Mr. SC Keyal, learned Assistant SGI appearing for the respondent authorities on
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
pra):
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 s. 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a Rule. If s. 6 of the General Clauses Act had been applied no doubt this complaint 'against the two accused for the offence punishable under R. 132A of the D.I.Rs. could have been instituted even after the repeal of that rule.
18.The last case relied upon is 1. K. Gas Plant Manufacturing Co., (Rampur) Ltd. and Others v. The King Emperor(2). In that case, the Federal Court had to deal with the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
e 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] F.C.R. 141. (3) A.I.R. 1951 All. 703. (4) (1947) A.C. 362.before us in two respects. In that case, the prosecution had been started before the Defence of India Act ceased to be in force and, secondly, the language introduced in the amended sub-s. (4) of s. 1 of the Act had the effect of making applicable the principles laid down in s. 6 of the General Clauses Act, so that a legal proceeding could be instituted even after the repeal of the Act in respect of an offence committed during the time when the Act was in force. A
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision.”
(iii) Paragraphs 8 and 9 of General Finance Co. and Another (supra):
“8.Though we find the submissions of the learned counsel to be forceful, we are constrained to follow the two decisions of the Constitution Benches of this Court in Messrs Rayala Corporation (P) Ltd. case (supra) and Kolhapur Canesugar Wo
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 proceeding initiated under it to be not maintainable any further, relies upon the provisions of Section 6 A of the General Clauses Act, which is as under:
“[6-A. Repeal of Act making textual amendment in Act or Regulation – Where any [Central Act] or Regulation made after the commencement of this Act repeals any enactment by which the text of any [Central Act] or Regulation was amended by the express omission, insertion or substitution of any matter, then, unless a different intention appears, the repeal shall not
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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” would not be included. We are, therefore,l of the view that the second so-called ratio of the Constitution Bench in Royala Corpn. (P) Ltd. cannot be said to be a ratio decidendi at all and is really in the nature of obiter dicta.
32. Secondly, we find no reference to Section 6-A of the General Clauses Act in either of these Constitution Bench judgments. Section 6-A read as follows:
“6-A. Repeal of Act making textual amendment in act or Regulation- Where any Central Act or Regulation made afte
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
, 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 implied, for it is only the form that differs in the two cases and there is no difference 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 a
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 an intention to effect a repeal is attributed to a 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.” (emphasis supplied.) 35. The two later Constitution Bench judgment also did not have the benefit of the aforesaid exposition of the law. It is clear that even an implied repeal of a statute would fall within the expr
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 Section 6 of the General Clauses Act applies only to a repealed statute and not to expiring statues and that the general rules with regard to expiry of a temporary statute is that unless it contains some special provisions to the contrary after the temporary Act has expired, no proceedings can be taken upon it and it ceases to have any further effect.
10. From the aforesaid propositions made in paragraph 17 of Rayala Corporaion (P) Ltd (supra) it is discernible that Section 6 of the General Clauses Ac
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ing 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 pending proceedings initiated under it can no further be proceeded, and that such proposition laid down in Rayala Corporaion (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra) needs a reconstruction was considered by the Supreme Court in Fibre Board Pvt. Ltd. (supra).
In paragraph 29 of the judgment rendered in Fibre Board Pvt. Ltd. (supra), the aforesaid view expressed in the Principles of Statutory Interpretation by Justice GP Singh was taken note of.
14. In paragraph 30 of Fib
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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) Ltd (supra) that Section 6 of the General Clauses Act would apply only to a repeal and not to an omission would not be ratio decidendi at all and that it really is in the nature of an obiter dicta.
16. In paragraph 32 of Fibre Board Pvt. Ltd (supra) the Supreme Court also took note of the provisions of Section 6-A of the General Clauses Act which provides that where any Central Act or Regulation repeals any enactment by which the text of any Central Act or Regulation was amended by a
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 Kolhapur Canesugar Works Ltd. (supra) would also have to be looked from the perspective of the provisions of Section 6-A of the General Clauses Act and to that extent as has held in Fibre Board Pvt. Ltd (supra), the propositions laid down in Rayala Corporation (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra) are per incuriam judgments.
19. From the said point of view, the contention raised by Mr. SC Keyal, learned Assistant SGI that the provisions of Section 6-A of the Gen
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ry, 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 that extent, 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 dealing with the proposition laid down in Rayala Corporation (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra), the Supreme Court was conscious of the aspect of referring the matter to a larger bench, but
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 earlier proposition of the larger bench where such clarification by itself cannot lead to a conclusion that there is a conflict between the views expressed by the larger bench and the smaller bench.
25. The Division Bench of the Supreme Court in Fibre Board Pvt. Ltd., (supra) had deliberated, discussed and explained the proposition laid down in Rayala Corporation (P) Ltd (supra) and in Kolhapur Canesugar Works Ltd. (supra) and it is not a case where a contrary view had bee
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 other words, the proposition laid down in paragraph 37 of Kolhapur Canesugar Works Ltd. (supra) is that the continuance of a further proceeding under an omitted Act depends upon as to whether a savings clause is provided in the enactment by which the earlier enactment was omitted. In the instant case, it is taken note of that the provisions of Chapter V of the Finance Act of 1994 were omitted by Section 173 of the CGST Act of 2017, where Section 173 is under the heading
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
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 is taken to be a conflict, but the decision having been rendered by a Bench of equal strength, the proposition that is more appealing is to be taken into consideration. The proposition in paragraph 37 of Kolhapur Canesugar Works Ltd. (supra) providing that the proceedings under an omitted enactment continues to remain in the event of there being a savings clause in the enactment bringing about such omission appears to be more appealing that the proposition in Rayal
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
visions 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 provisions laid down in paragraph 37 of Kolhapur Canesugar Works Ltd. (supra) 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.
34. In view of such conclusion, we find the
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
