Omission of penal provision without saving clause bars later prosecution for the earlier tax deduction default.

Section 6(c) of the General Clauses Act, 1897 protects liabilities on repeal, but it does not extend to a mere omission of a penal provision followed by substitution unless the later law expressly or by necessary implication saves pending proceedings. Where the earlier section 276B offence was omitted and replaced without any saving clause, fresh complaints for the omitted default could not be validly initiated after the substitution took effect, and prosecutions based on that earlier default were unsustainable.

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Issues: Whether complaints for failure to deduct tax at source could validly be instituted after the omission of the old penal provision and substitution of the new section, in the absence of any saving clause.

Analysis: The applicable legal principle is that section 6(c) of the General Clauses Act, 1897 protects liabilities on repeal, but it does not apply where a provision is merely omitted and replaced by a new provision unless the later enactment contains an express or necessarily implied saving of pending proceedings. The earlier penal provision under section 276B of the Income-tax Act, 1961 covered failure to deduct or pay tax, whereas the substituted provision confined the offence to failure to pay tax deducted at source and did not preserve prosecutions for the omitted default. In the absence of a saving clause, fresh complaints initiated after the substitution for the earlier default could not be sustained.

Conclusion: The complaints were not maintainable and were liable to be quashed.

Ratio Decidendi: Section 6 of the General Clauses Act, 1897 applies to repeal, not to mere omission of a statutory provision; where a penal provision is omitted and replaced without a saving clause, prosecutions for the omitted offence cannot be initiated after the omission takes effect.

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