Accrued annuity deposit liability survives omission of the recovery provision, and legal representatives may still be proceeded against.

Omission of section 280T did not extinguish an annuity deposit liability that had already crystallised before the omission; section 6 of the General Clauses Act preserved the accrued right to recover it. The Act's recovery machinery also remained available for such sums payable, and section 159 made the deceased depositor's legal representative liable to the same extent as the deceased. The argument that Chapter XXII-A was a self-contained code excluding the general recovery provisions was rejected. Recovery proceedings against the legal representative were therefore valid, and the challenge to the demand failed.

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Issues: (i) Whether the omission of section 280T of the Income-tax Act, 1961, with effect from 1 April 1967 extinguished the liability to recover annuity deposit amounts already accrued. (ii) Whether the legal representative of a deceased depositor can be proceeded against for recovery of annuity deposit amounts under the recovery provisions of the Income-tax Act, 1961.

Issue (i): Whether the omission of section 280T of the Income-tax Act, 1961, with effect from 1 April 1967 extinguished the liability to recover annuity deposit amounts already accrued.

Analysis: The liability to pay annuity deposit had already crystallised before the omission of the provision. The omission of the enabling provision did not destroy the existing liability or the right to recover it. Section 6 of the General Clauses Act, 1897 preserved accrued rights and liabilities unless a contrary intention appeared. The earlier decision relied upon had already held that the omission did not defeat recovery of an existing liability.

Conclusion: The omission of section 280T did not bar recovery of the accrued annuity deposit liability. The issue was decided against the assessee.

Issue (ii): Whether the legal representative of a deceased depositor can be proceeded against for recovery of annuity deposit amounts under the recovery provisions of the Income-tax Act, 1961.

Analysis: The annuity deposit was part of the sum payable under the Income-tax Act, 1961, and the recovery provisions in Chapter XVII-D could be invoked for such recovery. Section 156, as it then stood, covered sums payable including annuity deposit, and section 159 made the legal representative liable to pay any sum the deceased would have been liable to pay, to the same extent. The contention that Chapter XXII-A was a self-contained code excluding the general recovery machinery was rejected.

Conclusion: The legal representative was liable and the recovery proceedings were valid. The issue was decided against the assessee.

Final Conclusion: The challenge to the demand for recovery of annuity deposit amounts failed, and the writ petition was dismissed with costs.

Ratio Decidendi: The omission of a recovery provision does not extinguish an accrued tax-related liability, and a legal representative may be proceeded against where the Act makes the deceased's payable sum recoverable through the general recovery machinery and fixes representative liability.

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