TaxTMI 
TaxTMI 
2024 (4) TMI 1035
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....insists on its application but the statutory authorities as well as the Division Bench of the High Court rejected his case and imposed higher penalty under the old rule. 2.1 For the reasons to follow, we have accepted the contention of the appellant and, in allowing the appeal, determined that the purpose of the amendment is to achieve a proper balance between crime and punishment or the offence and penalty. In light of this, and recognizing that classifying offenders into before or after the amendment for imposing higher and lower penalties does not serve any public interest, we have directed that the substituted Rule alone will apply to pending proceedings. 3. Facts:- The appellant is a sub-licensee under the M.P. Excise Act, 1915 Hereinafter referred to as "the Act" for manufacture, import and sale of Foreign Liquor, regulated under the Madhya Pradesh Foreign Liquor Rules, 1996 Hereinafter referred to as "the 1996 Rules". 3.1 Sub-licensees importing Foreign Liquor are granted transit permits in which the origin, quality, quantity and point of delivery of the imported liquor are recorded. At the point of destination, the consignment is verified for quality and quantity, ....
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....ciencies in excess of the limits allowed under Rule 16 and Rule 17, the F.L. 9 or FL 9-A, F.L. 10-A or F.L. 10-B licensee shall be liable to pay penalty at a rate exceeding three times but not exceeding four times the maximum duty payable on foreign liquor at that time, as may be imposed by the Excise Commissioner or any officer authorized by him: Provided that if it be proved to the satisfaction of the Excise Commissioner or the authorized officer that such excess deficiency or loss was due to some unavoidable cause, like fire or accident and its first information report was lodged in Police Station, he may waive the penalty imposable under this sub-rule. (3) The Excise Commissioner or the Collector may suspend or cancel the license under Section 31 of the Act upon a contravention of any of these rules or provisions of the Act, or any other rules made under the Act, or the orders issued by the Excise Commissioner." 4. Facts reveal that no action was initiated during the license year of 2009-2010. 5. On 29.03.2011, Rule 19 was substituted by an amendment. The relevant portion of substituted provision is as follows: "Rule 19. Penalties Herei....
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....ng and future proceedings. He, therefore, set aside the orders of the statutory authorities and remanded the matter back to them for determining the penalty as per the substituted Rule. 10. The Division Bench of the High Court, by the order impugned herein, reversed the decision of the Single Judge on the simple ground that as the license was granted for one year, the Rule that existed during that license year must apply. The reason for not applying the substituted Rule according to the Division Bench is also that determination of penalty being substantive law, cannot operate retrospectively. 11. Questioning the legality and validity of the decision of the Division Bench of the High Court, the present appeals are filed. Mr. Pratap Venugopal, Ld. Senior Advocate, appearing on behalf of the appellant argued that the effect of substitution is to repeal the existing provision from the statute book in its entirety and to enforce the newly substituted provision. He would further submit that even for incidents which took place when the old Rule was in force, it is the substituted Rule that would be applicable, and therefore, the demand notice dated 22.11.2011 seeking payment of pena....
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....e Government by substituting the new rule in place of the old one never intended to keep alive the old rule. Having regard to the totality of the circumstances centring around the issue the Court held that the substitution had the effect of just deleting the old rule and making the new rule operative. In Mangilal Pindwal (1996) 5 SCC 60 case this Court upheld the legislative practice of an amendment by substitution being incorporated in the text of a statute which had ceased to exist and held that the substitution would have the effect of amending the operation of law during the period in which it was in force. In Koteswar case (1969) 1 SCC 255 a three-Judge Bench of this Court emphasised the distinction between "supersession" of a rule and "substitution" of a rule and held that the process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place." 12.2. A slight variation is noticed in a recent decision in Gottumukkala Venkata Krishamraju v. Union of India, (2019) 17 SCC 590 where this Court held that: "18. Ordinarily wherever the word "substitute" or "substitution" is used by th....
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....he date of its issuance and at the same time, cease to exist from the date of its deletion or withdrawal. The reason for this distinction is in the supremacy of the Parliament and its control of executive action, being an important subject of administrative law. 15. We will now refer to the rule making power under the M.P. Excise Act, 1915. Section 62 of the Act empowers the State to make rules. Relevant portion of Section 62 is as follows: - "62. Power to make rules.- (1) The State Government may make rules for the purpose of carrying out the provisions of this Act. (2) In particular, and without prejudice to the generality of the foregoing provision, the State Government may make rules- (a) prescribing the powers and duties of Excise Officers; (b) to (n) ... (3) The power conferred by this section of making rules is subject to the condition that the rules made under subsection (2) (a), (b), (c), (e), (f), (i), (l) and (m) shall be made after previous publication : Provided that any such rules may be made without previous publication if the State Government considers that they should be brought into force at once." 16. Se....
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....alty, forfeiture or punishment may be imposed, as if the repealing Madhya Pradesh Act had not been passed." 19. The above-referred Section of the MP General Clauses Act by itself would not make any difference as the Section is applicable only to enactments, i.e. when any M.P. Act repeals any enactment and not a subordinate legislation. Interpreting an identical provision of the General Clauses Act, 1897, i.e. Section 6, this Court has consistently held that Section 6 of the General Clauses Act, 1897, has no application to subordinate legislation. Rayala Corp. v. Director of Enforcement, (1969) 2 SCC 412; Kolhapur Canesugar Works Ltd. v. Union of India, (2000) 2 SCC 536 20. Mr. Saurabh Mishra then referred to Section 31 of Madhya Pradesh General Clauses Act, 1957, which is as under: "31. Application of Act to Ordinances and Regulations.- The provisions of this Act shall apply, unless there is anything repugnant in the subject or context- (a) to any Ordinance or Regulation as they apply in relation to Madhya Pradesh Acts: Provided that sub-section (1) of section 3 of this Act shall apply to any Ordinance or Regulation as if for the reference ....
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....t. Apart from setting coherent and consistent methods of understanding enactments, the interpretation statutes also subserve the purpose of reducing prolixity of legislations. The standard principles formulated in the interpretation statutes must, therefore, be read into any and every enactment falling for consideration. 25. In Pushpa Devi v. Milkhi Ram (1990) 2 SCC 134 while explaining the purpose and object of prefacing a definition or an interpretation with the phrase- "unless there is anything repugnant in the subject or context"- this court held :- "19. The opening sentence in the definition of the section states "unless there is anything repugnant in the subject or context". In view of this qualification, the court has not only to look at the words but also to examine the context and collocation in the light of the object of the Act and the purpose for which a particular provision was made by the legislature. Reference may be made to the observations of Wanchoo, J. in Vanguard Fire and General Insurance Co. Ltd. v. M/s Fraser and Ross [(1960) 3 SCR 857, 863: AIR 1960 SC 971: (1960) 30 Com Cas 13] where the learned Judge said that even where the definition is exhau....
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....ji Ravji & Co. v. Commissioner of Income Tax, (1990) 2 SCC 231 A Constitutional Court is tasked with the sacred duty of interpreting the Constitution, Acts of Parliament or States, subordinate legislations, regulations, instructions and even to practices having force of law. Whichever or wherever the instrument, interpretation is the exclusive province of the Court. Dr. Major Meeta Sahai v. State of Bihar, (2019) 20 SCC 17 The principle is aptly enunciated as: "The Court has the function of authoritatively construing legislation, that is, determining its legal meaning so far as is necessary to decide a case before it. This function is exclusive to the Court, and a meaning found by any other person, for example an authorising agency, an investigating agency, an executing agency, a prosecuting agency, or even the legislature itself, except when intending to declare or amend the law, is always subject to the determination of the court. It is usually said that the making of law, as opposed to its interpretation, is a matter for the legislature, and not for the courts, but, in so far as that legislature does not convey its intention clearly, expressly and completely, i....
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....ts impact on society and human vulnerability are taken into account to provide the required measure of deterrence and reform. Day to day working of the Rules, reposing their effectiveness, ineffectiveness, deficiency of deterrence, disproportionate penalty having a chilling effect on genuine businesses, are some routine factors which require the executive to make necessary amendments to the rules. In this context, depending on the nature of offence, the proportionate penalty is required to be modulated from time to time. In light of this, we can appreciate that the felt need of the State to amend and substitute Rule 19 which provided a higher penalty at four times the duty, with a simple penalty not exceeding the duty payable. 32. If the amendment by way of a substitution in 2011 is intended to reduce the quantum of penalty for better administration and regulation of foreign liquor, there is no justification to ignore the subject and context of the amendment and permit the State to recover the penalty as per the unamended Rule. The subject of administration of liquor requires close monitoring and the amendment must be seen in this context of bringing about good governance and ef....