Repeal and saving provisions preserve pre-existing penalty liability under a tax statute despite enactment of later law

Reconsideration of penalty exposure under a repealed tax statute turns on the saving effect of the later law and the General Clauses Act. The note explains that repeal of the Uttar Pradesh Trade Tax Act did not extinguish liabilities, penalties or remedies already incurred, because the Uttar Pradesh Value Added Tax Act preserved them through its saving provisions and section 6 of the Uttar Pradesh General Clauses Act, 1904 continued to apply absent a contrary intention. It also notes that the later Act contained a corresponding penalty power, supporting enforceability of the earlier liability and leaving the penalty order legally sustainable despite repeal.

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Issues: Whether a penalty imposed under the repealed Uttar Pradesh Trade Tax Act, 1948 survived after the enactment of the Uttar Pradesh Value Added Tax Act in view of the repeal and saving provisions and section 6 of the Uttar Pradesh General Clauses Act, 1904.

Analysis: The repeal of the Uttar Pradesh Trade Tax Act was not treated as an obliteration of the earlier law. The saving provisions in section 81 of the Uttar Pradesh Value Added Tax Act preserved actions, liabilities, penalties and remedies arising under the repealed enactment, and section 6 of the Uttar Pradesh General Clauses Act, 1904 continued to operate unless a contrary intention was shown. The later Act also contained a corresponding power to impose penalty, so the liability incurred under the repealed Act remained enforceable. The challenge to the penalty was not examined on merits in view of the available statutory appellate remedy.

Conclusion: The penalty order was held to be legally sustainable notwithstanding repeal of the earlier Act, and the writ petition failed.

Ratio Decidendi: Where a statute is repealed and simultaneously re-enacted on the same subject with saving provisions, liabilities and penalties already incurred under the repealed enactment remain enforceable unless the later law evinces a contrary intention.

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