2014 (4) TMI 129 - HC - VAT and Sales Tax

Quashment of circular - Whether notification dated 31.3.86 issued under the U.P. Sales Tax Act, 1948 can be treated to be notification u/s 19(3) of U.P. VAT Act, 2008 Taking of cash security while importing coal at the time of issuing Form-38 - Held that - By Section 81(1) of 2008 of Act the U.P. Trade Tax Act, 1948 has been repealed - However, Section 81(2) begins with the non-absente clause that notwithstanding such repeal notifications issued under repealed enactment in force immediately before such commencement so far as it is not in consistent with the provisions of 2008 Act shall be that deemed to have been issued under the corresponding provisions of this Act - Section 81(2) creates a legal fiction - The saving u/s Section 81(2) is explicit and clear that all notifications issued under U.P. Trade Tax Act, 1948, which were in operation at the time of commencement of 2008 Act shall continue - Section 1(3) further provides that the Act shall be deemed to have come into force from April,1, 1948. - Section 1 thus provides that after amendment by U.P. Act No.31 of 1995 the U.P. Sales Tax Act shall be deemed to have come into force from April 1, 1948 - Thus, the mention of U.P. Trade Tax Act 1948 in Section 81 shall also cover the notifications and action taken under U.P. Sales Tax Act, 1948 prior to amendment by the U.P. Act No.31 of 1995. Effect of repeal Legislative intention - Held that - Relying on judgment of Gammon India Ltd. Versus Special Chief Secretary and Others 2011 (7) TMI 17 - SUPREME COURT OF INDIA The principle which has been laid down in this case is that 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 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 purposes of determining whether they indicate a different intention - The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities but whether it manifests an intention to destroy them This Court cannot, thus, subscribe to the broad proposition that Section 6 is ruled out when there is repeal of an enactment followed by a fresh legislation - Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section - Also relied on Ram Singh Kushwaha Vs. State of U.P. and others 2014 (4) TMI 41 - ALLAHABAD HIGH COURT held that the abovesaid two decisions fully supports the interpretations of Section 81 of 2008 Act No merits The writ petition is dismissed - Decided against assessee.

Summary

Issues involved:
1. Validity of circular dated 21.6.10 issued by Commission, Trade Tax, U.P. regarding taking cash security while importing coal at the time of issuing 'Form-38'.
2. Interpretation of Section 19 sub-section (3) and Section 81 of the U.P. Value Added Tax Act, 2008.
3. Whether notification dated 31.3.86 under the U.P. Sales Tax Act can be considered as a notification under Section 19 sub-section (3) of the 2008 Act.
4. Application of the General Clauses Act, 1897 in the context of repealing and saving provisions under the U.P. Value Added Tax Act, 2008.

Analysis:
1. The petitioner sought to quash a circular requiring cash security for importing coal at the time of issuing 'Form-38'. The petitioner argued that no notification under Section 19 sub-section (3) was issued, making the circular jurisdictionally invalid.
2. Section 19(3) allows the Commissioner to require cash security for notified goods. Section 81 saves notifications under the U.P. Trade Tax Act, 1948. The dispute revolved around whether a notification under the U.P. Sales Tax Act, 1948 could be considered under Section 19(3).
3. The Court held that Section 81 saves notifications from the repealed U.P. Trade Tax Act, 1948, including those under the U.P. Sales Tax Act, 1948. The legal fiction created by Section 81 extends to notifications issued under the Sales Tax Act before its amendment.
4. The Court rejected the petitioner's reliance on the General Clauses Act, 1897, stating that Section 81 of the 2008 Act prevails. Citing case law and a Division Bench decision, the Court upheld the interpretation of Section 81 and dismissed the petitioner's arguments.
5. Ultimately, the Court dismissed the writ petition, affirming the validity of the circular requiring cash security for coal imports. The judgment clarified the interplay between the repealed and new tax acts, emphasizing the saving provisions under the 2008 Act.