2006 (2) TMI 278 - SC - VAT and Sales Tax

CHANGE OF LAW REPEAL OF ACT AND REPLACEMENT BY NEW ACT - PENALTY REGISTERED DEALER PURCHASE OF RAW MATERIALS AT CONCESSIONAL RATE OF TAX

Issues Involved:
1. Jurisdiction of the Assistant Commissioner of Commercial Taxes in initiating and completing penalty proceedings under the Andhra Pradesh General Sales Tax Act, 1957 (APGST Act) after its repeal.
2. Legal implications of the simultaneous repeal and re-enactment of statutes.
3. Application of Section 6 of the General Clauses Act, 1897, in the context of repealed and re-enacted legislation.
4. Validity of penalty proceedings initiated under the repealed APGST Act.

Issue-Wise Detailed Analysis:

1. Jurisdiction of the Assistant Commissioner of Commercial Taxes:
The principal question was whether the Assistant Commissioner of Commercial Taxes, Warangal Division, Andhra Pradesh, had the jurisdiction to initiate and complete penalty proceedings under the APGST Act after its repeal. The appellant, a construction company, was accused of falsely issuing Form G to claim reduced tax rates for purchasing cement, which was ineligible for concessional tax under the APGST Act. Despite the repeal of the APGST Act with the introduction of the Andhra Pradesh Value Added Tax Act (APVAT Act) on April 1, 2005, the Assistant Commissioner issued show cause notices and initiated penalty proceedings under the repealed Act.

2. Legal Implications of Simultaneous Repeal and Re-enactment:
The court examined the legal implications of the simultaneous repeal and re-enactment of statutes, focusing on whether the new legislation preserved the rights and liabilities under the old statute or intended to obliterate them. The court noted that Section 80 of the APVAT Act, which repealed the APGST Act, included provisions that preserved the previous operation of the repealed Act and allowed for the continuation of proceedings initiated under it.

3. Application of Section 6 of the General Clauses Act, 1897:
Section 6 of the General Clauses Act, 1897, was pivotal in determining whether the penalty proceedings could continue under the repealed APGST Act. This section provides that the repeal of an enactment does not affect any right, privilege, obligation, or liability acquired or incurred under the repealed enactment, nor does it affect any legal proceeding or remedy in respect of such rights and liabilities. The court observed that Section 80(3) of the APVAT Act specifically made Section 8 of the Andhra Pradesh General Clauses Act, 1891, applicable, which is analogous to Section 6 of the General Clauses Act, 1897.

4. Validity of Penalty Proceedings:
The court concluded that the Assistant Commissioner had the jurisdiction to initiate and complete the penalty proceedings under the APGST Act, even after its repeal, as the APVAT Act preserved the rights and liabilities under the repealed Act. The court cited various precedents and legal principles, including English and American cases, to support the view that the re-enactment of a statute is considered a reaffirmation of the old law, and the provisions of the repealed Act continue in force unless the new enactment indicates a contrary intention.

Conclusion:
The court held that the Assistant Commissioner was justified in initiating and completing the penalty proceedings under the APGST Act. The appeals were disposed of with the direction that the appellant pay a lump sum of Rs. 1.5 crores within four weeks, pending adjudication of the appeals before the Appellate Tribunal. The order of attachment issued by the respondents would not be enforced if the appellant complied with this payment. The Tribunal was directed to hear and decide the appeals in accordance with the law. The parties were directed to bear their own costs.

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