Omitted penal provision cannot sustain fresh prosecution unless expressly saved from repeal or omission.

A criminal prosecution cannot be newly initiated under a penal provision once that provision has been omitted from the statute, unless the omission is expressly saved by a continuation clause. The Court applied the settled principle that only proceedings already commenced may continue where the law is preserved for that limited purpose. It further noted that the continuing presence of section 269SS did not by itself authorise prosecution under the omitted section 276DD. The complaint was therefore treated as invalid.

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Issues: Whether a criminal complaint could be initiated after omission of section 276DD of the Income-tax Act for alleged receipt of deposits otherwise than by account payee cheque or draft.

Analysis: Section 276DD, which earlier created the offence, stood omitted with effect from 1 April 1989 by the Direct Tax Laws (Amendment) Act, 1987. The Court applied the settled principle that once a penal provision is omitted, a new prosecution cannot be launched under that provision unless the omission is saved by an express continuation clause. Reliance was placed on the analogous principle applied in relation to omitted delegated legislation, where only proceedings already initiated could continue and no fresh prosecution could be commenced after the rule ceased to exist. The Court held that section 269SS remaining on the statute book did not by itself authorise criminal prosecution under the omitted section.

Conclusion: The complaint was invalid and the appeal failed.

Final Conclusion: Prosecution could not be initiated for acts alleged to have occurred after the omission of the penal provision, and the dismissal of the complaint was upheld.

Ratio Decidendi: A criminal prosecution cannot be newly instituted under a penal provision after that provision has been omitted from the statute, unless the omission is expressly saved so as to preserve such initiation.

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