TaxTMI 
TaxTMI 
2023 (4) TMI 1136
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.... 1999 read with Regulation 5(1) of the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000 (hereinafter referred to as 'Regulations') and violations under Sections 3(b) & 4 of the Act, 1999, a complaint bearing No. T-3/27/HZO/2011 dated 12.07.2017 was filed before the Directorate of Enforcement (hereinafter referred to as 'ED') under Section 16(3) of the Act, 1999. 4. Pursuant to the said complaint, a show cause notice dated 14.07.2017 was issued to the Petitioners herein who in turn submitted replies to the said show cause notice on 24.08.2021 and 25.08.2021. An oral hearing was conducted by Respondent No. 1 in which the Petitioners participated and submitted their written submissions. Thereafter, the impugned order dated 04.01.2023 was passed. 5. The Petitioners challenge the impugned order, inter alia, on the ground that they were charged under Section 6(3)(b) of the Act, 1999 which was subsequently omitted from the Act, 1999, w.e.f. 15.10.2019. 6. During the stage of admission, a preliminary objection was raised by Respondent No. 1 regarding the maintainability of the present writ petition. It was contended t....
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.... 11. A full bench of the Supreme Court in Assistant Commissioner of State Tax v. Commercial Steel Limited 2021 SCC OnLine SC 884 held that a writ petition, in presence of an alternative remedy, is maintainable only in exceptional cases. The relevant paragraph is extracted below: 11. The respondent had a statutory remedy under section 107. Instead of availing of the remedy, the respondent instituted a petition under Article 226. The existence of an alternate remedy is not an absolute bar to the maintainability of a writ petition under Article 226 of the Constitution. But a writ petition can be entertained in exceptional circumstances where there is: (i) a breach of fundamental rights; (ii) a violation of the principles of natural justice; (iii) an excess of jurisdiction; or (iv) a challenge to the vires of the statute or delegated legislation. Therefore, to decide the maintainability of the present writ petition, this Court has to decide whether the impugned order was passed without jurisdiction. 12. It is relevant to note that Section 6(3) of the Act, 1999 deals with the power of the Reserve Bank of India to formulate Regulations ....
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....nd that as Section 6(3) of the Act, 1999 was omitted, any pending proceedings in relation to the contravention of the said section will cease to exist. To buttress the said contention, the Petitioners contend that pending proceedings under an omitted provision are not saved by Section 6 of the Act, 1897 as it is only applicable to repeals and not omissions. This Court does not agree with the contentions raised by the Petitioners for the reasons stated herein below. 16. It is relevant to note that the Parliament has the power to enact laws and bring them into existence and it also has the power to repeal or delete them from existence. However, such repealed or deleted provisions are generally saved and continue to apply to pending proceedings. The idea behind such saving such provision(s) is to not disturb the rights and obligations that have already accrued on parties. Generally, a repealing statute also includes a savings clause by virtue of which the repealed provisions continue to apply to pending proceedings. However, there may be cases where the legislature fails to include a savings clause due to inadvertence and the same may result in injustice to the parties on whom righ....
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....quence of repeal is also obliteration of the statute with retrospective effect on past transactions, the Legislature is empowered to introduce a saving clause in the repealing Act. Even in cases where a saving clause is not made, the provisions of the General Clauses Act are applicable to central statutes and the principles of the General Clauses Act can be made applicable to statutes made by the State Legislatures as well (See: State of Punjab v. Harnek Singh (supra)). It is relevant to state at this point that the Manipur Legislature enacted the Manipur General Clauses Act, 1966, which came into force on 30.03.1966, by which the provisions of the General Clauses Act, 1897 were made applicable to the statutes of the Manipur Legislature. Explaining the scope and applicability of Section of 6 of the Act, 1897, the Supreme Court in Ambalal Sarabhai Enterprises Ltd. v. Amrit Lal & Co. (2001) 8 SCC 397, held that pending proceedings under a statute which subsequently repealed are saved. The relevant paragraphs are extracted below: 25. The opening words of Section 6 specify the field over which it is operative. It is operative over all the enactments under the General Clause....
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....provision that is omitted. In other words, the question would be whether pending proceedings under a provision that is subsequently omitted are saved under Section 6 of the Act, 1897. 18. As stated above, according to the Petitioners, Section 6 of the Act, 1897 does not save pending proceedings under an omitted provision. It is contended that Section 6 of the Act, 1897 is only applicable to repealed provisions and not omitted provisions. Reliance was placed on the following paragraph of a Constitution Bench decision in Rayala Corpn. (supra): 17. Reference was next made to a decision of the Madhya Pradesh High Court in State of Madhya Pradeshv. Hiralal Sutwala [AIR 1959 MP 93] but, there again, the accused was sought to be prosecuted for an offence punishable under an Act on the repeal of which Section 6 of the General Clauses Act had been made applicable. In the case before us, Section 6 of the General Clauses Act cannot obviously apply on the omission of Rule 132-A of the DIRs for the two obvious reasons that Section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a rule. If Section 6 of the Gener....
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....ble. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceedings shall not continue but fresh proceedings for the same purpose may be initiated under the new provision. 38. In the present case, as noted earlier, Section 6 of the General Clauses Act has no application. There is no saving provision in favour of pending proceedings. Therefore action for realisation of the amount refunded can only be taken under the new provision in accordance with the terms thereof. 20. Going by the decisions in Kolhapur Canesugar (supra) and Rayala Corpn. (supra), one might reach a conclusion that Section 6 of the Act, 1897 does not apply to omitted provisions and only applies to repealed provisions. However, such a conclusion would be misplaced and wrong in light of the decisions of the Supreme Court in Fibre Boards (supra) and Shree Bhagwati (supra). 21. The Supreme Court in Fibre Boards (supra) considered the question whether Section 6 of ....
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....eal" not to "an omission". This statement of law was followed by another Constitution Bench in Kolhapur Canesugar Works Ltd. case [(2000) 2 SCC 536]. After setting out para 17 of the earlier judgment, the second Constitution Bench judgment states as follows: (SCC p. 550, para 33) "33. In para 21 of the judgment the Full Bench [Saurashtra Cement and Chemical Industries Ltd. v. Union of India, (1993) 1 Guj LR 5 : (1995) 79 ELT 367] has noted the decision of a Constitution Bench of this Court in Chief Inspector of Mines v. Karam Chand Thapar [AIR 1961 SC 838 : (1961) 2 Cri LJ 1] and has relied upon the principles laid down therein. The Full Bench overlooked the position that that was a case under Section 24 of the General Clauses Act which makes provision for continuation of orders, notification, scheme, rule, form or bye-law, issued under the repealed Act or regulation under an Act after its repeal and re-enactment. In that case Section 6 did not come up for consideration. Therefore the ratio of that case is not applicable to the present case. With respect we agree with the principles laid down by the Constitution Bench in Rayala Corpn. case [(1969) 2 SCC 412]. In our consid....
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....ed rule cannot continue unless the new rule contains a saving clause to that effect."(at pp. 697-98.) 30. In view of what has been stated hereinabove, perhaps the appropriate course in the present case would have been to refer the aforesaid judgment to a larger Bench. But we do not find the need to do so in view of what is stated by us hereinbelow. 31. First and foremost, it will be noticed that two reasons were given in Rayala Corpn. (P) Ltd. [(1969) 2 SCC 412] for distinguishing the Madhya Pradesh High Court judgment [1958 SCC OnLine MP 149 : AIR 1959 MP 93]. Ordinarily, both reasons would form the ratio decidendi for the said decision and both reasons would be binding upon us. But we find that once it is held that Section 6 of the General Clauses Act would itself not apply to a rule which is subordinate legislation as it applies only to a Central Act or Regulation, it would be wholly unnecessary to state that on a construction of the word "repeal" in Section 6 of the General Clauses Act, "omissions" made by the legislature would not be included. Assume, on the other hand, that the Constitution Bench had given two reasons for the non-applicability of Section 6 o....
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....State of U.P. v. Synthetics and Chemicals Ltd., (1991) 4 SCC 139 : (1991) 3 SCR 64, where a Division Bench of this Court held that one particular conclusion of a Bench of seven Judges [Synthetics and Chemicals Ltd. v. State of U.P., (1990) 1 SCC 109] was per incuriam - see: the discussion at SCR pp. 80, 81 and 91: SCC pp. 151, 152 and pp. 161-162, paras 36 to 42 of the said judgment.] 22. Again, in Shree Bhagwati (supra), the Supreme Court discussed its decision and clarified its decision in Fibre Boards (supra). The Court reiterated that Section 6 of the Act, 1897 is equally applicable to omission of a provision. The Court also held that the effect of words 'omit' and 'repeal' is the same as both result in deletion of a provision. Therefore, it cannot be said that Section 6 of the Act, 1897 is not applicable to omission of a provision. The Court discussed in detail the decision of Rayala Corpn. (supra) and held that the said decision did not consider Section 6A of the Act, 1897, therefore, was rightly held per incuriam in Fibre Boards (supra). The relevant paragraphs are extracted below: 7. First, it may be stated that the judgment of this Court in Fibre Board case [Fi....
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....peal". He further argued that as the Madhya Pradesh High Court's decision was put forward by the respondent in that case in support of their argument, the Constitution Bench's dealing with the said decision in order to overcome it would necessarily be the ratio decidendi of the said decision, and being a Constitution Bench decision, would be binding upon this Bench. He further referred to Section 31 of the Prevention of Corruption Act, 1988, which, in his opinion, makes it clear that Parliament itself has understood that a repeal under Section 6 of the General Clauses Act would not apply to omissions. He has further argued that it may be true that the expression "repeal" is normally used when an entire statute is done away with, as opposed to an "omission" which is applied only when part of the statute is deleted, but said that this is not invariably the case, and referred to Section 1 of the Contract Act, 1872 in which enactments mentioned in the schedule are repealed not in their entirety but only to the extent provided and, therefore, argued that the expression "repeals" will apply also to a part of an enactment as opposed to the enactment as a whole. **** ....
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.... only in futuro. If the expression "delete" would amount to a "repeal", which the appellant's counsel does not deny, it is clear that a conjoint reading of Halsbury's Laws of England and the Legal Thesaurus cited hereinabove both lead to the same result, namely, that an "omission" being tantamount to a "deletion" is a form of repeal. 14. The learned counsel's second argument that Section 6-A of the General Clauses Act when it speaks of an "omission" only speaks of an "amendment" which omits and, therefore does not refer to a repeal, is equally fallacious. In Bhagat Ram Sharma v. Union of India [Bhagat Ram Sharma v. Union of India, 1988 Supp SCC 30 : 1988 SCC (L&S) 404 : (1988) 6 ATC 783], this Court held that there is no real distinction between a repeal and an amendment and that "amendment" is in fact a wider term which includes deletion of a provision in an existing statute. In the said judgment, this Court held: (SCC pp. 40-41, paras 17-18) "17. It is a matter of legislative practice to provide while enacting an amending law, that an existing provision shall be deleted and a new provision substituted. Such deletion has the effect of repeal of the ex....
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.... Section 6-A shows that a repeal can be by way of an express omission, obviously what was meant was that an amendment which repealed a provision could do so by way of an express omission. This being the case, it is clear that Section 6-A undisputedly leads to the conclusion that a repeal would include a repeal by way of an express omission. 16. The learned counsel then argued that while distinguishing the Madhya Pradesh High Court judgment [State of M.P. v. HiralalSutwala, 1958 SCC OnLine MP 149 : AIR 1959 MP 93] in Rayala Corpn. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] a Constitution Bench of this Court expressly held as the first reason that Section 6 applies only to repeals and not to omissions. The Fibre Board [Fibre Boards (P) Ltd. v. CIT, (2015) 10 SCC 333 : (2015) 376 ITR 596] judgment has clearly held as follows: (SCC p. 354, para 31) "31. First and foremost, it will be noticed that two reasons were given in Rayala Corpn. (P) Ltd. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] for distinguishing the Madhya Pradesh High Court judgment [State of M.P. v. HiralalSutwala, 1958 SCC OnLine MP 149 : AIR 1959 MP 9....
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.... Corpn. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] had stated that an omission would not amount to a repeal and it is for this reason that Section 31 was enacted. This again does not take us further as this statement of the law in Rayala Corpn. [Rayala Corpn. (P) Ltd. v. Director of Enforcement, (1969) 2 SCC 412] is no longer the law declared by the Supreme Court after the decision in Fibre Board case [Fibre Boards (P) Ltd. v. CIT, (2015) 10 SCC 333 : (2015) 376 ITR 596]. This reason therefore again cannot avail the appellant. 22. The reference to the savings provision in Section 1 of the Contract Act, 1872 again does not take us very much further as the expression "repeal" as has been pointed out above can be of part of an enactment also. This being the case, when the legislature uses the word "omit" it usually does so when it wishes to delete a particular section as opposed to deleting an entire Act. As has been noticed both in Fibre Board case [Fibre Boards (P) Ltd. v. CIT, (2015) 10 SCC 333 : (2015) 376 ITR 596] and hereinabove, these are all expressions which only go to form and not to substance. Even assuming for the sake of argument that w....
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....y arise where a previous decision of this Court has taken a particular view as to the construction of a statutory provision as, for instance, Section 66(4) of the Act. When it is urged that the view already taken by this Court should be reviewed and revised it may not necessarily be an adequate reason for such review and revision to hold that though the earlier view is a reasonably possible view, the alternative view which is pressed on the subsequent occasion is more reasonable. In reviewing and revising its earlier decision, this Court should ask itself whether in the interests of the public good or for any other valid and compulsive reasons, it is necessary that the earlier decision should be revised. When this Court decides questions of law, its decisions are, under Article 141, binding on all courts within the territory of India, and so, it must be the constant endeavour and concern of this Court to introduce and maintain an element of certainty and continuity in the interpretation of law in the country. Frequent exercise by this Court of its power to review its earlier decisions on the ground that the view pressed before it later appears to the Court to be more reasonable, ma....
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....ion of a procedural rule for availing the credit cannot in any manner affect the said charge. The prosecution cannot be deprived of opportunity to prove evasion which by itself is an offence. In this view of the matter, there was no justification for the High Court to quash the charge merely on the ground of Rule 56-A having been omitted. 24. In Har Naraini Devi v. Union of India 2022 SCC OnLine SC 1265., the Supreme Court again held that Section 6 of the Act, 1897 is equally applicable to an omission. Therefore, such omission or deletion or repeal cannot affect the previous operation of such omitted/deleted/repealed provision. The relevant paragraphs are extracted below: 27. By virtue of Section 6 of the General Clauses Act, the repeal of an enactment would not affect the previous operation of such an enactment. In Shree Bhagwati Steel Rolling Mills v. CCE, this Court has held that repeal is to be treated similarly as an omission and Section 6 of the General Clauses Act would apply equally to an omission as it would apply to a repeal. On account of Sections 6(b) and 6(c) of General Clauses Act, the omission of Section 4(2) of 1956 Act cannot affect the previous operati....