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The State of Haryana v. Hindustan Construction Company Ltd. and connected matters

Civil Appeal · 2017 INSC 913Decided 15 Sept 2017
Civil Appeal Nos. 10792-10794 of 2011, Civil Appeal No. 10824 of 2011, Civil Appeal No. 10830 of 2011, Civil Appeal No. 10829 of 2011, Civil Appeal No. 10828 of 2011, Civil Appeal Nos. 10826-10827 of 2011, Civil Appeal No. 10825 of 2011, Civil Appeal Nos. 10821-10823 of 2011, Civil Appeal No. 10831 of 2011, Civil Appeal No. 10837 of 2011, Civil Appeal No. 10833 of 2011, Civil Appeal No. 10832 of 2011, Civil Appeal Nos. 10834-10835 of 2011, Civil Appeal No. 10795 of 2011, Civil Appeal No. 10808 of 2011, Civil Appeal No. 10805 of 2011, Civil Appeal No. 10807 of 2011, Civil Appeal No. 10804 of 2011, Civil Appeal No. 10796 of 2011, Civil Appeal Nos. 10801-10802 of 2011, Civil Appeal Nos. 10815-10816 of 2011, Civil Appeal No. 10806 of 2011, Civil Appeal No. 10810 of 2011, Civil Appeal No. 10803 of 2011, Civil Appeal No. 10799 of 2011, Civil Appeal No. 10812 of 2011, Civil Appeal No. 10798 of 2011, Civil Appeal No. 10797 of 2011, Civil Appeal No. 10800 of 2011, Civil Appeal No. 10820 of 2011, Civil Appeal No. 10811 of 2011, Civil Appeal No. 10813 of 2011, Civil Appeal No. 10814 of 2011, Civil Appeal No. 10809 of 2011, Civil Appeal Nos. 10817-10818 of 2011, Civil Appeal Nos. 10840-10841 of 2011, Civil Appeal Nos. 10838-10839 of 2011
Justice Ranjan Gogoi · Justice Navin Sinha

Background

The respondent's sales tax assessment for 1998-99 was completed and a refund ordered in May 2000 under the Haryana General Sales Tax Act, 1973. That Act was repealed and replaced by the Haryana Value Added Tax Act, 2003 with effect from 1 April 2003. In June 2004, after the old Act had been repealed, the State issued a show-cause notice invoking the old Act's suo-motu revisional power to recover over Rs. 65 lakh from the refund already granted. The High Court held this revision was not permissible since no proceeding was pending under the old Act when it was repealed, and the State appealed to the Supreme Court along with several similarly-situated batch appeals.

Decision Breakdown

The Supreme Court held that the saving clause (Section 61) of the 2003 VAT Act preserved only proceedings that were already pending under the old 1973 Act at the time of repeal: it did not revive the power to open fresh revisional proceedings over matters that had already attained finality. Since no proceeding was pending against the respondent when the old Act was repealed, the State could not invoke Section 40 of the repealed Act in 2004, and the general saving provisions of the Punjab General Clauses Act, 1898 (Section 4) could not rescue the revision because the new Act's own saving clause expressed a contrary intention. The Court also noted the legislature itself later amended Section 61 in 2010, underscoring that the gap being exploited here was real and had required a fix. All the batch appeals were accordingly dismissed, upholding the High Court.

Lesson Learnt

When a law is repealed and replaced, any saving clause in the new law controls which old proceedings survive: a tax (or similar) authority cannot resurrect closed assessments using powers from a law that no longer exists, unless the new law's own savings clause says those proceedings were kept alive.

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

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