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Sushila N. Rungta (D) Thr. Lrs. v. The Tax Recovery Officer-16(2) and Ors.

Civil Appeal · 2018 INSC 1020Decided 30 Oct 2018
Civil Appeal No. 10824 of 2018
Justice Rohinton Fali Nariman · Justice Navin Sinha

Background

In 1970, the appellant's grandfather was penalised and his gold ordered confiscated for failing to declare it under the now-repealed Gold (Control) Act, 1968. A fresh show-cause notice seeking enhanced confiscation was challenged and the Supreme Court stayed all proceedings in 1973, pending final disposal of the appeal. While that stay was still in effect, Parliament repealed the Gold (Control) Act altogether in 1990, without any clause saving pending proceedings under the old law. The question decades later was whether the old show-cause notice and penalty proceedings could still continue despite the repeal.

Decision Breakdown

The Supreme Court examined the "Statement of Objects and Reasons" behind the 1990 repeal, which itself described the Gold Control Act as a "regressive" law that caused "considerable dissatisfaction" and "hardship and harassment" to ordinary citizens and small goldsmiths. The Court held this language showed Parliament's clear intention that old proceedings under the repealed Act should not survive, displacing the normal rule in Section 6 of the General Clauses Act (which would otherwise let pending proceedings continue after a repeal). It therefore held the decades-old show-cause notice no longer survived, allowed the appeal, and set aside the High Court's judgment; in the connected batch of related appeals, it also directed that a stalled Wealth Tax reference be revived and decided by the High Court now that the gold dispute had become moot.

Lesson Learnt

When a law is repealed and the repealing Act's own stated reasons condemn the old law as unjust or harmful, courts may treat that as clear evidence that old pending cases under that law should also come to an end: a straightforward repeal does not always mean "business as usual" for cases already in the pipeline.

Official source (sci.gov.in)View Judgment (PDF)

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