2017 (9) TMI 858 - SC - VAT and Sales Tax

High Court Rules Revisional Power Invalid Post-Repeal: Case Analysis & Legislative Intent

The State of Haryana And Others Versus Hindustan Construction Company Ltd.

The State of Haryana And Others Versus Hindustan Construction Company Ltd. - 2017 (9) SCC 463 Issues involved:1. Revisional power under Section 40 of the Haryana General Sales Tax Act, 1973 after its repeal by the Haryana Value Added Tax, 2003.Analysis:The judgment dealt with the common question of law regarding the sustainability of exercising revisional power under Section 40 of the Act of 1973 after its repeal by the Act of 2003. The Court considered a batch of appeals and provided a comprehensive analysis. The key issue was whether the revisional power under the old Act could be invoked after the new Act came into force.The facts of the case involved a sales tax assessment completed under the Act of 1973, with a refund ordered in 2000. Subsequently, the Act of 1973 was repealed in 2003, and a show cause notice was issued in 2004 for revision under Section 40 of the old Act. The High Court held that such revision was unsustainable post-repeal, as only pending proceedings were saved by the new Act's saving clause.The appellant argued that the revision was justified as the refund was wrongly obtained, falling within the saved rights under the General Clauses Act. The Court examined relevant case laws to determine the scope of revisional power in fiscal legislation and the authority's responsibility to ensure assessments comply with the law.The respondent contended that the repeal and saving clause of the new Act excluded the application of the General Clauses Act, and subsequent amendments confirmed this exclusion. The Court compared the unamended and amended provisions of the Act to understand the legislative intent.The Court emphasized that the new Act's saving clause only preserved pending proceedings under the old Act. Since no proceedings were pending against the respondent, the exercise of revisional power post-repeal was deemed unsustainable. Referring to legal precedents, the Court highlighted the importance of legislative intent in interpreting the effect of a repeal followed by fresh legislation.The judgment concluded that interpreting Section 4 of the General Clauses Act to save the revisional power without pending proceedings would render subsequent amendments redundant. Any incongruous interpretation leading to absurdity had to be avoided, and the Court dismissed the appeals lacking merit.In one of the appeals, an additional ground regarding the power of review under the old Act was raised, but the Court found the legislative provisions different and upheld the High Court's order without interference.