2014 (4) TMI 41 - HC - VAT and Sales Tax

Effect of Repeal and reenactment Reopening of assessment - Non disclosure of returns and escapement of assessment - legislative intent - Section 6 of the General Clauses Act - Held that - judgment in Gammon India Ltd. Versus SPL. Chief Secretary and others 2006 (2) TMI 278 - SUPREME COURT OF INDIA followed - Whenever there is a repeal of an enactment and simultaneous reenactment, the reenactment is to be considered as reaffirmation of the old law and provisions of the repealed Act which are thus reenacted continue in force uninterruptedly unless, the reenacted enactment manifests an intention incompatible with or contrary to the provisions of the repealed Act - Such incompatibility will have to be ascertained from a consideration of the relevant provisions of the reenacted enactment and the mere absence of saving clause is, by itself, not material for consideration of all the relevant provisions of the new enactment - In other words, a clear legislative intention of the reenacted enactment has to be inferred and gathered whether it intended to preserve all the rights and liabilities of a repealed statute intact or modify or to obliterate them altogether. The argument that the proceedings were not initiated under the Repealed Act, and thus no proceedings for reassessment can be undertaken is entirely misconceived - Where assessment under the old Act is to be reopened the proceedings have to be withdrawn under the old Act - The provisions of Section 6 of the General Clauses Act have effect on repeal and such effect is enumerated u/s 81 of the U.P. VAT Act, 2008 - The proceedings drawn for reassessment in accordance with the provisions of the old Act - The petitioner has alternative remedy of filing appeal against the order u/s 55 of the U.P. VAT Act, 2008 - The writ petition is dismissed on the ground of alternative remedy Decided against assessee.

Summary

Issues:
Assessment under the U.P. Trade Tax Act for the year 2005-06, Reopening of assessment under Section 21(2) of the U.P. Trade Tax Act, Repeal of the U.P. Trade Tax Act and enactment of the U.P. Value Added Tax Act, 2008, Applicability of Section 81 of the U.P. Value Added Tax Act, 2008, Interpretation of Section 6 of the General Clauses Act, 1897 in light of the repeal and reenactment of laws, Availability of alternative remedy under Section 55 of the U.P. Value Added Tax Act, 2008.

Analysis:

The petitioner, a registered dealer, was assessed under the U.P. Trade Tax Act for the year 2005-06. Subsequently, a notice was issued under Section 21(2) of the U.P. Trade Tax Act, seeking explanation for an undisclosed amount received from a project manager. The Addl. Commissioner granted permission to reassess the petitioner for the said year. The petitioner argued that since the U.P. Trade Tax Act was repealed and replaced by the U.P. Value Added Tax Act, 2008, no action initiated post the new Act's enforcement could continue. However, the Standing Counsel contended that the repeal saved acquired rights and liabilities under the old Act, citing Section 6 of the General Clauses Act, 1897, and referred to relevant case law (Gammon India Ltd. v. Special Chief Secretary & Ors., 2006) to support this stance.

The Court analyzed the effect of repeal under Section 6 of the General Clauses Act and the principles laid down in the case law cited. It held that when a law is repealed and simultaneously reenacted, the reenactment reaffirms the old provisions unless explicitly stated otherwise. In this case, the assessment under the old Act had to be reopened based on new information, and the proceedings had to be conducted in accordance with the provisions of the old Act, as saved by the repeal clause in the U.P. Value Added Tax Act, 2008.

Regarding the availability of an alternative remedy, the Court noted that the petitioner could appeal under Section 55 of the U.P. Value Added Tax Act, 2008, despite the repeal of the old Act. It emphasized that the powers of appeal authorities and the petitioner's rights to pursue remedies remained intact under the new Act. Consequently, the Court dismissed the writ petition on the grounds of the availability of an alternative remedy through the appeal process under the U.P. Value Added Tax Act, 2008.