Accrued tax liability survives statutory omission when section 6 of the General Clauses Act preserves recovery after repeal.

Omission of the annuity deposit provisions from the Income-tax Act did not extinguish liabilities that had already accrued before 1 April 1967. The court held that removal of a statutory provision by amendment can amount to repeal for section 6 of the General Clauses Act, 1897, so accrued rights and liabilities are preserved unless the legislature shows a contrary intention. Because the assessee had not exercised the option to opt out within time, the obligation to make the annuity deposit had already arisen, and the absence of an express saving clause did not destroy that liability. The demand and recovery proceedings were therefore treated as valid.

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Issues: Whether the omission of the provisions relating to annuity deposit from the Income-tax Act, 1961, and the deletion of the corresponding words in section 156 prevented recovery of an annuity deposit that had accrued before 1 April 1967, or whether section 6 of the General Clauses Act, 1897 preserved the power to assess and recover it.

Analysis: The annuity deposit scheme created an obligation to deposit for assessees who did not exercise the statutory option to opt out within time. The Court held that the mere use of the word "omit" in the amending legislation did not, by itself, exclude the operation of section 6 of the General Clauses Act, 1897. A provision in an Act, when removed, amounts to a repeal of an enactment for the purposes of section 6. The Court further held that the liability to make the annuity deposit had already accrued where the assessee had not exercised the option, and the absence of a saving clause did not show an intention to destroy accrued liabilities. The authorities cited by the petitioner were distinguished on the ground that they concerned different statutory settings where no accrued liability existed.

Conclusion: Section 6 of the General Clauses Act, 1897 applied, the accrued liability for annuity deposit survived the omission of the relevant provisions, and the demand and recovery proceedings were valid.

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