Saving clause preserves old sales tax arrears; fraudulent evasion can arise before formal tax payment becomes due.

An express saving and deeming provision in the repealing sales tax statute preserved arrears under the old law, so prosecutions and convictions for tax default could proceed under the Kerala General Sales Tax Act, 1963. A transfer made before formal payment became due could still amount to fraudulent evasion where liability had already accrued and the assessee acted to defeat recovery. The specific offence of fraudulent evasion under section 46(2)(c) was upheld, but the overlapping conviction for wilful non-payment under section 46(1)(f) could not stand because the specific provision subsumed the general offence for the same default.

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Issues: (i) whether prosecutions for non-payment and fraudulent evasion of sales tax assessed for periods under the old Act could validly proceed under the Kerala General Sales Tax Act, 1963; (ii) whether a transfer made before the tax became formally payable could amount to fraudulent evasion of payment of tax; and (iii) whether conviction for wilful non-payment under section 46(1)(f) could stand alongside conviction for fraudulent evasion under section 46(2)(c).

Issue (i): whether prosecutions for non-payment and fraudulent evasion of sales tax assessed for periods under the old Act could validly proceed under the Kerala General Sales Tax Act, 1963.

Analysis: Liability to tax was incurred when the taxable transactions occurred, though payment became exigible only upon assessment and demand. The repeal and saving provision in section 61 of the 1963 Act expressly preserved arrears and provided that amounts due under the old Act could be recovered as if they had accrued under the new Act. That provision was treated as self-contained and sufficient to exclude reliance on the general saving rule.

Conclusion: The prosecutions and convictions under the 1963 Act were competent.

Issue (ii): whether a transfer made before the tax became formally payable could amount to fraudulent evasion of payment of tax.

Analysis: Fraudulent evasion was held not to depend on the tax already having become payable in a formal sense. Once liability had been incurred and the assessee, knowing the impending demand, transferred property to defeat recovery, the act could be treated as a fraud on revenue. The analogy of transfers made to defeat creditors supported that conclusion.

Conclusion: The transfer was capable of constituting fraudulent evasion of payment of tax under section 46(2)(c).

Issue (iii): whether conviction for wilful non-payment under section 46(1)(f) could stand alongside conviction for fraudulent evasion under section 46(2)(c).

Analysis: Section 46(2)(c) is a specific provision dealing with fraudulent evasion of tax, while section 46(1)(f) is a general provision for wilful contravention where no express punishment is provided. Wilful non-payment is implicit in fraudulent evasion, and once punishment is imposed for the specific offence, additional punishment under the general clause for the same tax default cannot be sustained.

Conclusion: The conviction and sentence under section 46(1)(f) were set aside, while the conviction under section 46(2)(c) was sustained.

Final Conclusion: The assessee's liability for the tax-related offence under the specific fraudulent-evasion clause was upheld, but the overlapping conviction for wilful non-payment was removed and the imprisonment sentence was replaced by fines.

Ratio Decidendi: Where a repealing sales tax statute contains an express saving and deeming provision, arrears due under the repealed enactment may be proceeded with under the new Act, and a specific offence of fraudulent evasion of tax subsumes the lesser general offence of wilful non-payment for the same default.

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