2002 (2) TMI 1101 - SC - VAT and Sales Tax

Once the old rule has been deleted or repealed and substituted by a new rule, whether the old rule would revive when the substituted rule ceased to be operative? Whether the 1952 rule had revived after the 1955 rule was struck down? Held that - Appeal allowed. A perusal of section 20 shows that several provisions of Uttar Pradesh General Clauses Act have been made applicable in relation to statutory instruments including the statutory rules issued under the Uttar Pradesh Act. However, section 6-C does not find place in sub-section (2) of section 20 of the U.P. General Clauses Act. In absence of application of section 6-C to the statutory instrument, including the statutory rule, which is the case before us, the contention of the respondents deserves to be rejected. Since section 6-C of the U.P. General Clauses Act has not been applied to the statutory rule framed by the Government of Uttar Pradesh, the substituted rule after it became inoperative, old rule 49 would not revive.

Summary

Issues Involved:
1. Legality of the revival of the old rule 49 after the substituted rule 49 ceased to be operative.
2. Applicability of Section 6-C of the U.P. General Clauses Act to statutory rules.

Issue-wise Detailed Analysis:

1. Legality of the revival of the old rule 49 after the substituted rule 49 ceased to be operative:

The appellants, companies engaged in sugar production, challenged the enhancement of society commission from 50 paise to 5% of the minimum statutory cane price. They argued that the old rule 49, which was deleted and substituted by a new rule 49 providing for a commission rate of 2.69%, should not revive after the new rule ceased to be operative. The High Court dismissed their writ petition, applying Section 6-C of the U.P. General Clauses Act to hold that the old rule revived. The appellants contended that once the old rule was repealed and substituted, it could not revive even if the substituted rule ceased to operate. They cited precedents like B.N. Tewari v. Union of India, Firm A.T.B. Mehtab Majid & Co. v. State of Madras, and Indian Express Newspapers (Bombay) P. Ltd. v. Union of India, where the Supreme Court held that repealed rules do not revive upon the invalidation of the new rules. The Court agreed with this view, stating that the State Government intended to repeal the old rule and substitute it with a new one, and the old rule did not revive after the new rule ceased to be operative.

2. Applicability of Section 6-C of the U.P. General Clauses Act to statutory rules:

The respondents argued that under Section 6-C of the U.P. General Clauses Act, the old rule 49 revived after the substituted rule ceased to operate. However, the Court found that Section 6-C did not apply to statutory rules. Section 20 of the U.P. General Clauses Act lists several provisions applicable to statutory instruments, but Section 6-C is not included. Therefore, the Court rejected the respondents' contention, stating that since Section 6-C does not apply to statutory rules, the old rule 49 did not revive after the substituted rule became inoperative.

Conclusion:

The Supreme Court allowed the appeal and the writ petition, setting aside the High Court's judgment. The appellants' argument that the old rule 49 did not revive after being substituted was upheld. The Court also clarified that Section 6-C of the U.P. General Clauses Act does not apply to statutory rules, further supporting the appellants' case. The appellants agreed not to claim any refund of the society commission already paid, and no further orders were required in that regard. The appeal and writ petition were allowed without any order as to costs.