TaxTMI 
TaxTMI 
2015 (2) TMI 678
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 1996-97 to 2004-05 (assessment years 1997-98 to 2005-06) would be without authority of law ?" 2. The facts, briefly stated, are as under : 2.1 By the Constitution (Thirty-sixth Amendment) Act, 1975, Sikkim was admitted as a State of the Union of India with effect from April 26, 1975, and article 371F of the Constitution of India was inserted to provide for special provisions with respect to the State of Sikkim. Sub-clause (n) of article 371F empowers the President of India to issue public notification and to extend with such restrictions or modifications as he thinks fit to the State of Sikkim any enactment which is in force in a State in India at the date of such notification. On November 7, 1988, a Notification No. S. O. 1028(E) (see [1989] 176 ITR (St.) 222 ) was issued by the President of India extending the provisions of Income-tax Act, 1961, to the State of Sikkim. By a further Notification being No. S. O. 148(E), dated February 23, 1989 (see [1989] 176 ITR (St.) 223 ), the Ministry of Finance, Central Government, appointed the 1st day of April, 1989, as the date on which the Income-tax Act, 1961, shall come into force in the State of Sikkim in rela tion to the previou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome-tax exemption and for non-payment of 50 per cent. Income-tax assessed. 2.5 The petitioner then agitated the matter before the Chief Minister of Sikkim, praying for exemption from paying Income-tax under the Sikkim State Income-tax Manual, 1948, because, according to it, the same was already repealed, and refund of the ad hoc payment made. 2.6 On September 11, 2012, the Additional Commissioner, Commercial Tax Division, the Revenue and Expenditure Department, Government of Sikkim, issued a memo, based on the opinion of the Law Department and the Law Commission of Sikkim, that the repeal of an enactment does not extinguish the liabilities accrued under the repealed enactment and the demand having been raised in July, 2006. The petitioner was liable to pay Income-tax to the tune of Rs. 9,09,10,818 under the Sikkim State Income- tax Manual, 1948, and the Department was entitled to realise the same by following the recovery procedure. 2.7 The petitioner, thereafter, made various representations, inter alia, on the grounds that the Sikkim State Income-tax Manual, 1948, having been repealed, was not applicable upon the petitioner and the respondent authorities were not entit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n order in favour of the petitioner against which an appeal under section 260A of the Act has been filed before the Calcutta High Court, Kolkata, and, thus, the matters, relating to the payment for Income-tax by the petitioner under the Income-tax Act, 1961, are pending before the appropriate forums. 6. We have heard learned counsel for the parties. 7. By two notifications of the Central Government (No. S. O. 1028(E), dated November 7, 1988, and No. S. O. 148(E), dated February 28, 1989), the Income-tax Act, 1961, was extended to the State of Sikkim with effect from April 1, 1989, i.e., from the assessment year 1989-90. However, after some practical difficulty, section 26 of the Finance Act, 1989, made statutory provisions for application of the Income-tax Act, 1961, to the State of Sikkim that notwithstanding anything contained in the above two notifications issued by the Government of India, so far as they relate to the commencement of the Income-tax Act, 1961, in the State of Sikkim with effect from the previous year relevant to the assessment year commencing on the 1st day of April, 1990, the provisions of the Income-tax Act, 1961, shall come into force in the State of Si....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nstitution of India. It was clearly indicated by the Chairman that levy of Income-tax as per the Sikkim State Income-tax Manual, 1948, after April 1, 1990, was unconstitutional. On a clarification being sought by the officers of the Government of Sikkim that whether it was required that the provisions for repealing of the Sikkim State Income-tax Manual, 1948, could be included in the Income-tax Act, 1961, the Chairman clarified that, according to the Central Government's view, the Sikkim State Income-tax Manual, 1948, stood repealed automatically once the Income-tax Act, 1961, being a Central legislation, was extended to Sikkim. 10. Thereafter, the Government of India formulated a package comprising 10 (ten) points, dated August 20, 2007 (annexure R2), and communicated the same to the Chief Secretary of Government of Sikkim, containing point No. (V) that the Sikkim State Income-tax Manual, 1948, would stand repealed with effect from the assessment year 1990-91 relevant to the previous year beginning on April 1, 1989. In reply to the said communication dated August 20, 2007, the State Government accepted the above proposal and a communication dated August 21, 2007 (annexure R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rporation of Delhi v. Shiv Shanker [1971] 1 SCC 442, it was held that the Legislature, which may generally be presumed to know the existing law, is not expected to intend to create confusion by its omission to express its intent to repeal in clear terms. The courts, therefore, as a rule, lean against implying a repeal unless the two provisions are so plainly repugnant to each other that they cannot stand together and it is not possible on any reasonable hypothesis to give effect to both at the same time. The repeal must, if not express, flow from necessary implication as the only intendment. The provisions must be wholly incompatible with each other so that the two provisions operating together would lead to absurd consequences, which intention could not reasonably be imputed to the Legislature. It is only when a consistent body of law cannot be maintained without abrogation of the previous law that the plea of implied repeal should be sustained. To determine if a later statutory provision repeals by implication an earlier one it is accordingly necessary to closely scrutinise and consider the true meaning and effect both of the earlier and the later statute. Until this is done it c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....law has complete knowledge of the existing laws on the same subject matter, and, therefore, when it does not provide a repealing provision, the intention is clear not to repeal the existing legislation. When the new Act contains a repealing section mentioning the Acts which it expressly repeal, the presumption against implied repeal of other laws is further strengthened on the principle expression unius (persone vel rei) est exclusion alterius (The express intention of one person or thing is the exclusion of another). The continuance of the existing legislation, in the absence of an express provision of repeal by implication lies on the party asserting the same. The presumption is, however, rebutted and a repeal is inferred by necessary implication when the provisions of the later Act are so inconsistent with or repugnant to the provisions of the earlier Act that the two cannot stand together. But, if the two can be read together and some application can be made of the words in the earlier Act, a repeal will not be inferred. The necessary questions to be asked are : (1) Whether there is direct conflict betw....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar that on account of the above inconsistencies, the two enactments cannot stand together and we have no hesitation in holding that on extension of the Income-tax Act, 1961, the Sikkim State Income-tax Manual, 1948, was repealed by necessary implication. 18. So far as the arguments relating to estoppel, quoted in paragraph 4 (supra), raised by learned Additional Advocate General is concerned, we may note that estoppel is a rule of evidence which bars a party from denying or alleging certain facts owing to his/its previous conduct, allegation, or denial. It is well settled that there could not be estoppel against the statutes. One cannot be prevented by any estoppel from ascertaining his rights under a particular Act/statute so long the said Act/statute continues to be the law in force. There may be many reasons like wrong advice, ignorance, confusion or not correctly understanding the law or the rights, for a party to take pleadings against his rights under the Act or statute, which he/it can always correct either in the same proceeding or in any subsequent proceeding and take a plea according to his/its rights under the Act/statute. 19. We may also note that in the earlier m....