Pre-deposit under Section 39(5) HGST Act stays valid after repeal due to saving clause in HVAT Act Section 61

The HC held that the pre-deposit requirement under Section 39(5) of the repealed HGST Act, 1973, remains enforceable post-repeal due to the saving clause in Section 61 of the HVAT Act, 2003, and the General Clauses Act, 1898. The right of appeal is substantive, vesting at the commencement of the lis and governed by the law prevailing at that time. Subsequent enactments do not alter vested rights unless expressly stated. The HC set aside the impugned order of the Haryana Tax Tribunal and allowed the appeal, affirming the continuity of legal consequences under the repealed Act and the applicability of pre-deposit conditions despite repeal.

---

---

ISSUES:

Whether interest on refund of tax demand raised under the repealed Haryana General Sales Tax Act, 1973 (HGST Act) but assessed after the commencement of Haryana Value Added Tax Act, 2003 (HVAT Act) is payable under the provisions of the HGST Act or the HVAT Act.Whether the provisions of Section 43(2) read with Rule 35(1)(b) of the HGST Act apply to interest on delayed refund where the assessment order was passed under the HGST Act after the HVAT Act came into force.Whether the provisions of Section 20(8) of the HVAT Act are applicable to claims for interest on refund in cases where the demand was originally raised under the HGST Act but the refund and assessment occurred after HVAT Act's commencement.Whether the repeal and saving provisions under Section 61 of the HVAT Act and Section 6 of the General Clauses Act, 1897 apply to preserve rights, liabilities, and procedures arising under the repealed HGST Act.Whether the learned Haryana Tax Tribunal was justified in allowing interest on the entire refund amount from the date of deposit till the date of refund under Section 20(8) of the HVAT Act, contrary to the provisions of the HGST Act.

RULINGS / HOLDINGS:

The Court held that the assessment order dated 29.03.2005, though passed after the commencement of the HVAT Act, was passed under the HGST Act; however, by virtue of Section 61 of the HVAT Act, such assessment order is deemed to have been passed under the HVAT Act, making the HVAT Act provisions applicable for interest on refund.The Court ruled that the provisions of Section 20(8) of the HVAT Act, which entitle the assessee to interest on the refund amount for the entire period from the date of deposit till the date of refund at the rate of 1% per month, apply in the present case.The Court set aside the orders of the lower authorities that restricted interest payment to the delayed period beyond 90 days under Section 43(2) of the HGST Act, holding that the learned Haryana Tax Tribunal was justified in allowing interest for the entire period under Section 20(8) of the HVAT Act.The Court emphasized that the repeal and saving provisions under Section 61 of the HVAT Act and Section 6 of the General Clauses Act, 1897 preserve rights, liabilities, and actions under the repealed HGST Act unless a different intention is manifest in the HVAT Act, which is not the case here.The Court observed that the judgment relied upon by the appellant regarding the applicability of HGST Act provisions for interest is distinguishable and that the settled law supports application of the HVAT Act provisions for interest in the present circumstances.

RATIONALE:

The Court applied the statutory framework of the HVAT Act, 2003, specifically Section 61 (Repeal and Saving), which repealed the HGST Act but preserved all rights, liabilities, and actions under the repealed Act, deeming them to be done under the HVAT Act as if it was in force on the date of such actions.The Court relied on Section 6 of the General Clauses Act, 1897, which provides that repeal of an enactment shall not affect rights, privileges, obligations, liabilities, or legal proceedings unless a different intention appears in the repealing Act.The Court referred extensively to authoritative precedents, including a Constitution Bench decision in State of Punjab v. Mohar Singh Pratap Singh, and decisions from other jurisdictions, establishing that simultaneous repeal and re-enactment is construed as a continuation of the law unless the new enactment manifests a contrary intention.The Court distinguished the judgment relied upon by the appellant, noting it involved exercise of extraordinary jurisdiction under Article 226 of the Constitution and did not decide the issue on statutory provisions applicable in regular appeals.The Court underscored the principle that the right to appeal and substantive rights under taxation laws vest at the commencement of lis and are governed by the law prevailing at that time, but procedural aspects and enforcement, including interest on refund post repeal, are governed by the repealing Act's provisions unless otherwise indicated.The Court found no manifest intention in the HVAT Act to exclude interest payment under Section 20(8) for refunds relating to assessments originally under the HGST Act but assessed and refunded after HVAT Act commencement.

---