Supreme Court of India
THE STATE OF HARYANAAND OTHERSversusHINDUSTAN CONSTRUCTION COMPANY LTD.
- Citation
- 2017 INSC 913
- Decided
- 15 September 2017
- Disposal
- Dismissed
- Bench
- RANJAN GOGOI
Holding
The exercise of revisional power under section 40 of the 1973 Act after its repeal is unsustainable; the saving clause in section 61 of the 2003 Act limits the power to pending proceedings only, rendering section 4 of the Punjab General Clauses Act inapplicable.
Summary
The Haryana government assessed Hindustan Construction Co. for the 1998-99 year under the Haryana General Sales Tax Act, 1973 and ordered a refund in May 2000. The 1973 Act was repealed by the Haryana Value Added Tax Act, 2003 on 1 April 2003, which saved only pending proceedings. In June 2004, the tax authority exercised suo‑moto revisional power under section 40 of the repealed 1973 Act to recover tax, and the High Court upheld the recovery. The Supreme Court examined whether section 40 could be invoked after repeal, given the saving clause in section 61 of the 2003 Act and the applicability of section 4 of the Punjab General Clauses Act, 1858. It held that the repeal’s saving clause excluded any post‑repeal revision where no proceedings were pending, and therefore section 4 of the General Clauses Act could not revive the revisional power. The Court also noted that the 2010 amendment to section 61 was intended to avoid such absurdity. Consequently, the appeals were dismissed.
Issues considered
- Whether the suo‑moto revisional power under section 40 of the Haryana General Sales Tax Act, 1973 can be exercised after the Act’s repeal by the Haryana Value Added Tax Act, 2003.
- Whether section 4 of the Punjab General Clauses Act, 1858 applies to revive the revisional power in view of the saving clause in section 61 of the 2003 Act.
- Effect of the 2010 amendment to section 61 of the 2003 Act on the availability of the revisional power.
Legislation cited
Subjects
repealrevisional powertax assessmentGeneral Clauses Actsaving clauseVATsales taxstatutory interpretationlegislative intent
Judgment
[2017] 9 S.C.R. 482
A THE STATE OF HARYANAAND OTHERS
v.
HINDUSTAN CONSTRUCTION COMPANY LTD.
(Civil Appeal Nos. 10792-10794of2011)
B SEPTEMBER 15, 2017
[RANJAN GOGOi AND NAVIN SINHA, JJ.)
Harya11a General Sales Tax Act, 1973 - s.40 - Revisional
power - Exercise of revisiona/ power after repeal of 1973 Act on
1.4.2003 by Haryana Value Added Tax, 2003 - Sustainability of -
C Refund ordered under 1973 Act-Repeal of 1973 Act- Subsequently,
authority set aside the refund order in exercise of suo moto revisonal
powers uls.40 - Challenge against - Held: The assessment under
the Act of 19 73 having been completed and refund ordered, the
exercise of suo-moto revisional powers und.er s.40 of the same after
D repeal was clearly unsustainable in view of the contrary intention
expressed under s. 61 of the Act of 2003, savi11g only pending
proceedings - s.4 of the Punjab Ge11eral Clauses Act, 1858 will
have no application in view of s.61 of the repealing· Act - General
Clauses Act - Punjab General Clauses Act, 1858 - s.4 - Repeal -
Revision - Taxation.
E
Repeal - .New enactment after repeal - Applicability of
General Clauses Act to the fresh enactment - Held: If the repeal is
followed by a fresh enactment 011 the same subject, the applicability
of the General Clauses Act would undoubtedly require a11
exami11atio11 of the language in the new enactment to see if it
F expresses a different intention from the earlier Act - The enquiry
would necessitate an examination if the old rights and liabilities
are kept alive or whether the new Act manifests an intention to do
away with or destroy them - if the new Act manifests a different
intention, the application of the General Clauses Act will stand
excluded - General Clauses Act.
0
Dismissing the appeals, the Court
HELD: 1. There were no proceedings pending against the
respondent under the Act of 1973 when the new Act came into
force on 01.04.2003. The sno-moto revisional power under Section
H 40 of the former·Act was exercised on 07.06.2004. The repeal
482
THE STATE OF HARYANA AND OTHERS v. HINDUSTAN 483
CONSTRUCTION COMPANY LTD.
and saving clause in Section 61 of the Act of 2003, saved only A
pending proceedings under the repealed Act. The intendment
clearly was that matters which stood closed under the Act of 1973
bad to be given a quietus and could not be reopened. · The
assessment under the Act of 1973 having been completed and
refund ordered, the exercise of suo-moto revisional powers under
8
Section 40 of the same after repeal was clearly unsustainable in
view of the contrary intention expressed under Section 61 of the
Act of 2003, saving only pending proceedings. Section 4 of the
Punjab General Clauses Act, 18S8 will have no application in view
of the contrary intendment expressed in Section 61 of the
repealing Act. Had a contrary intention not been expressed, the C
issues arising for consideration would have been entirely different.
(Paras 9, 10)(488-C-F)
2. The legislature, in its wisdom having noticed the
limitation and constraints under Section 61 of the Act of 2003,
made necessary amendments to the same by Act No. 3 of 2010 D
on 02.04.2010. Any interpretation saving the revisional power
under Section 40 of the Act of 1973, without any proceedings
pending on the relevant date, by resort to Section 4 of the Punjab
General Clause Act, 18S8 would render the amendment
redundant, and an exercise in futility, something which the E
legislature never .inte~ded to do. Such an incongruous
interpretation leading to absurdity has to be avoided. [Para
11J(489-B-C]
Raymond Ltd and Am: v. State of Chhaltisgarh & Ors.
(2007) 3 SCC 79 : (2007) 2 SCR 990; Swastik Oil Mills
Ltd v. H.B. Munshi, Deputy Commissioner of Sales T'ax, F
Bombay (1968). 2 SCR 492; Gammon India Ltd. v.
Special Chief Secretary and Ors. (2006) 3 SCC 3S4 :
[2006) 2 SCR 304; State of Punjab v. Mohar Singh
Pratap Singh (19SS) 1 SCR 893 - referred to.
Case Law Reference G
(2007) 2 SCR 990 referred to Para4
(1968) 2 SCR 492 referred to Paras
(2006) 2 SCR 304 referred to Paras
(19SS) l SCR 893 referred to Para 10 H
484 SUPREME COURT REPORTS [2017] 9 S.C.R.
A CIVIL APPELLATE JURISDICTlON: Civil Appeal Nos. I 0792-
10794 of201 I.
From the Judgment and Order dated 21.02.2005 of the High Court
of Punjab and Haryana at Chandigarh in C. W. P. Nos. 15749, 15828
and 15830 of2004.
B WITH
C.A. Nos. 1!)795, 10808, 10805, 10807, 10804, 10796. 10801-
10802, 10815-10816,10806,10810,10803,10799, 10812, 10798, 10797,
10800, 10820, 10811, 10813, !0814, 10809, 10817-10818, 10824,10830,
10829,10828,10826-10827,10825,10821-10823. 10831. 10837. 10833,
c 10832, 10834-10835, 10840-10841and10838-10839of201 I
P. H. Parekh, Sr. Adv., Manish Paliwal, Gautam Sharma,
Dr. Monika Gusain, Ms. Shruti Dutta, Suneel Kumar Atreya, Chander
Shekhar Ashri, Pawan Upadhyay, Rajiv Agnihotri, Praveen Kumar.
Abhay A. Jena, Vishal Prasad, Ms. Bina Gupta, Ms. Ritika Sethi, Utkarsh
D Dixit, Pavan Kumar, R. N. Pareek, Ms. Kaveeta Wadia, Shashank
Tripathi, Advs. for the appearing parties.
The Judgment of the Court was delivered by
NAVIN SINHA, J. I. The common question of law arising for
E consideration in this batch ofappeals is whether the exercise of revisional
power under .Section 40 of the Haryana General Sales Tax Act, 1973
(hereinafter referre~ to as 'the Act of 1973 ')after its repeal on l .4.2003,
by the Haryana Value Added Tax, 2003 (hereinafter referred to as 'the
Act of 2003'), is sustainable. The appeals have, therefore, been heard
together and are being disposed by a common order.
F
2. The facts, for better appreciation, shall be culled out from Civil
Appeal Nos. I 0792-10794 of 2011. The sales tax assessment of the
respondent, for the assessment year I998-99, was completed and refund
ordered on 12 .05 .2000, under the Act of 1973. Subsequently, the former
Act was repealed by the Act of 2003 on 01.04.2003. A show cause
G notice was issued to the respondent on 07.06.2004 regardingthe refund
ordered earlier, in exercise ofsuo~moto revisional powers under Section
40 of the Act of 1973. By order dated 12.07.2004, the respondent was
held liable for recovery of Rs. 65,35,632/-.
3. The order for recovery hf!ving been challenged by the
H respondent before the High Court, it was held that resort to Section 40
THE STATE OF HARYANA AND OTHERS v. HINDUSTAN 485
CONSTRUCTION COMPANY LTD. [NAVIN SINHA, J.]
of the Act of 1973, after coming into force of the new Act on 01.04.2003 A
was unsustainable, as the repeal and saving clause in Section 61 of the
Act of 2003, saved only pending proceedings under the former. Since
there were no proceedings pending against the respondent under the
repealed Act, on the relevant date, the proceedings thereunder could not
be sustained or justified by reference to Section 4 of the Punjab General
B
Clauses Act, 1898.
4. Sh. Manish Paliwal, learned counsel appearing on behalf of the
State ofHaryana, submitted that the refund having been wrongly obtained,
resort to suo-moto revision tinder Section 40 of' the Act of l 973, exercised
within the limitation of five years. was justified. The wrong benefit of
refund clearly fell within the meaning of the expression privilege, obligation C
or liability acquired or incurred under the repealed Act, and was therefore
saved by Section 4 of the Punjab General Clauses Act, 1898. Relying
on Raymond Ltd. amt Anr. vs. State of Cltliattisgarlt & Ors., (2007)
3 sec 79, it was contended that the revisional power conferred on the
revenue in a fiscal legislation should not be construed as a stand-alone D·
provision, but as a provision intended to enable the revisional authority to
ensure that the assessment had been carried out in accordance with
law. The power vested in the revisional authority to correct an error in
assessment has a direct nexus with the order of assessment giving finality
to the order of the assessing authority. There is a corresponding obligation
and responsibility on the assessee also, and when it is found that the E
assessment was otherwise then in accordance with law, the power of
the revisional authority cannot be restricted in revenue and fiscal matters.
5. Reliance was further placed on Swastik Oil Mills Ltd vs. H.B.
M1111slii, Deputy Commissioner of Sales Tax, Bombay, 1968 (2) SCR
492, and Gammon India Ltd. vs. Special Cltief Secretary anti Ors., F
(2006) 3 SCC 354, in suppo1t of the submission that resort to Section 40
of the Act of 1973 was saved by reason of Section 4 of the Punjab
General Clauses Act, 1898.
6. Sh. P.H. Parekh, learned Senior Counsel appearing on behalf
of the respondent, urged that the impugned order called for no G
interference. The repeal and saving clause in Section 61 of the Act of
2003 exclusively saved pending proceedings only. The application of
the Punjab General Clauses Act, l 898, therefore, stood excluded by the
expression of a different intention in the repealing Act. The legislature
subsequently amended Section 61 of the Act of 2003, suitably on
02.04.2010. . H
486 SUPREME COURT REPORTS [2017) 9 S.C.R.
A 7. At the outset, it is appropriate to set out the unamended and
amended provisions of Section 61 of the Act of200Jto facilitate better
appreciation of issues.
Section 61 of2003 Act Section 61 of2003 Act
(Before Amendment) (After Amendment)
(I) The Haryana General Sales Tax "(I) The Haryana General Sales Tax
B
Act, 1973 (20 of 1973), is hereby Act, 1973 {20 of l973), is hereby
repealed: repealed.
Provided that such repeal shall not-
(a) affect the previous operation of
c the Act so repealed or anything duly
done or suffered thereunder; or
(b) affect any right, title, privilege,
obligation or liability acquired,
accrued or incurred under the said
D
Act; or
(c) affect any act done or any action
taken (including any appointment,
notification, notice, order, rule, form
E regulation, certifil'llte) in the exercise
of any power conferred by or under
-the said Act,
and any such act done or any action
taken in the exercise of the powers
F conferred by or under the said Act
shall be deemed to have been done or
taken in the exercise of the powers
conferred by or under the said Act as
if this Act were in force on the date
G on which such act was done or action
taken; and all arre-.irs of tax and
other amount due at the
commencement of this Act may be
recovered as if the same had accrued
under this Act."
H
THE STATE OF HARYANA AND OTHERS y. HINDUSTAN 487
CONSTRUCTION COMPANY LTD. [NAVIN SINHA, J.]
(2) Notwithstanding anything (2) Notwithstanding anything A
contained in sub-section ( 1), - contained in sub-section ( 1), "
(a) any application, appeal, [(a) any application, appeal,
revision or other proceedings made revision or other proceedings
or preferred to any authority under made or preferred to any officer
the said Act, and pending at the or authority under the said B
commencement of this Act, shall, Act and pending at the
after such commencement, be commencement of this Act, shall,
transferred to and disposed of by after such commencement, be
the officer or authority who would transferred to and disposed of by
have had jurisdiction to entertain the officer or authority who c
such application; appeal, revision would have had jurisdiction to
or other proceedings under this Act entertain such application, appeal,
as if it had been in force on the revision or other proceedings
date on which such application, under this Act as if the said Act
appeal, rev1s1on or other had been in force on the date on
proceedings were made or which such application, appeal,
D
preferred; revision or other proceedings
were made or preferred.
Notwithstanding anything to
the contrary contained in any E
judgment, .decree or order of
.
any court or other authority,
where no review, revision or
'
corrective action could be
initiated or finalized in respect
of any assessment, order, F
proceeding under the said Act
prior to or after 1'1 April, 2003,
because of judgment or decree
of any court or Tribunal and
the ·said assessment or order G
passed under the said Act had
attained finality, the limitation
of five years as specified under
Section 40 of the said Act shall
be deemed to be eight years;"
. H
488 SUPREME COURT REPORTS [2017] 9 S.C.R.
A 8. We have considered the respective submissions. A simple repeal
of an Act leaves no room for expression of a contrary opinion. However,
ifthe repeal is followed by a fresh enactment on the same subject, the
applicability of the General Clauses Act would undoubtedly require an
examination of the language in the new enactment to see if it expresses
a different intention from the earlier Act. The enquiry would necessitate
B
an examination if the old rights and liabilities are kept alive or whether
the new Act manifests an intention to do away with or destroy them. If
the new Act manifests a different intention, the application of the General
Clauses Act will stand excluded.
9. There were no proceedings pending against the respondent
c undertheAct of l973 when the new Act came into force on 01.04.2003.
The suo-moto revisfonal power under Section 40 of the former Act was
exercised on 07.06.2004. The repeal and saving clause in Section 6 l of
the Act of 2003, saved only pending proceedings under the repealed
Act. The intendment clearly was that matters which stood closed under
D the Act of 1973 had to be given a quietus and could not be reopened.
l 0. The assessment under the Act of 1973 having been completed
and refund ordered, the exercise of suo-moto revisional powers under
Section 40 of the same after repeal was clearly unsustainable in view of
the contrary intention expressed under Section 61 of the Act of 2003,
E saving only pending proceedings. Section 4 ofthe Punjab General Clauses
Act, 1858 will have no application in view of the contrary intendment
expressed in Section 61 of the repealing Act. Had a contraiy intention
not been expressed, the issues arising for consideration would have been
entirely different. The observations in State ofPu11jah vs. Mohar Si11gli
Pratap Singll, (1955) l SCR 893, as extracted below are considered
F relevant:-
"8 .......... 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
G 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 purpose of determining whether they indicate a different
intention. The line of enquiry would be, not whether the new Act
H
,......
THE STATE OF HARYANA AND OTHERS v. HINDUSTAN 489
CONSTRUCTION COMPANY LTD. [NAVIN SINHA, J.] . ·
expressly keeps alive old rights and liabilities but whether it A
manifests an intention to destroy them ..... "
The observ.ations in Gammon India Ltd. (supra) at paragraph 73 are
to the same effect. ·
11. The legislature, in its wisdom having noticed the limitaticm and
constraints under· Section 61 ·of the Act o.f 2003, made necessary ,B
amendments 'to the same by Act No. 3 of 2010 on 02.04.2010.' Any
interpretation saving the rcvisional powerunder Section 40 9fthe Act of
1973, without any proceedings pending on the relevant date, by resort to
Section 4 of the Punjab General Clause Act, 1858 would render the
amendment redundant, and an exercise in futility, something which the c
legislature never intended to do. Such an incongruous intcipretation leading
to absurdity has to be avoided. '
· 12. In Civil Appeal l 0840-10841 of2011, an additional ground has
been urged that the power of review wider Section 41 of the Act of
· 1973 was exercised on 12.8.2003, by the Deputy Excise and Taxation D
Officer, to review an order of assessment dated 4.3.2002. Section 35 of
the new Act vested the power ofreview in the Tribunal exclusively.
13. The legislative provisions being different in the precedents
cited on behalf of the appellants, the same have no relevance to the
issue in controversy. The order of the High Courf_calls for no interference. E
14. The appeals, for reasons discussed, lack merit and are
· dismissed. · · .·
Dcvika Gujral Appeals dismisst'd.
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