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T. S. Baliah Vs. T. S. Rangachari, Income-tax Officer, Central Circle Vi, Madras. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberCriminal Revision Cases Nos. 645, 646, 647 and 648 of 1987 in Criminal Revision Petition Nos. 637, 6
Reported in[1969]71ITR163(Mad)
AppellantT. S. Baliah
RespondentT. S. Rangachari, Income-tax Officer, Central Circle Vi, Madras.
Cases ReferredIn C. A. Abraham v. Income
Excerpt:
- the petitioner in all these case is the same. they are dealt with together as the points raise are substantially the same.the revision petitioner is a cine actor. four complaints were filed against him by the income-tax officer, central circle 6, madras, alleging that he had been systematically filing false return of his income and had omitted to give true information regarding his professional earnings liable to be taxed from the year 1957, with a view to evade payment of tax ad he had deliberately concealed material particulars of his income in spite of notice having been issued by the department to file a true and correct statement of income. the first three complaints relating to the assessment years 1958-59, 1959-60, and 1960-61, respectively, were filed before the chief presidency.....
Judgment:

The petitioner in all these case is the same. They are dealt with together as the points raise are substantially the same.

The revision petitioner is a cine actor. Four complaints were filed against him by the Income-tax Officer, Central circle 6, Madras, alleging that he had been systematically filing false return of his income and had omitted to give true information regarding his professional earnings liable to be taxed from the year 1957, with a view to evade payment of tax ad he had deliberately concealed material particulars of his income in spite of notice having been issued by the department to file a true and correct statement of income. The first three complaints relating to the assessment years 1958-59, 1959-60, and 1960-61, respectively, were filed before the Chief Presidency Magistrate, Madras, under section 52 of the Income-tax Act, 1922, and under section 177, Indian Penal Code. The fourth complete, which is in respect of the assessment year 1961-62, was filed under section 277 of the Income-tax Act of 1961 and under section 177, Indian Penal Code.

The revision petitioner raised preliminary objection before the learned Chief Presidency Magistrate in respect of the first three complaints on the ground that the complaint under section 177, Indian Penal Code, was not maintainable in law as the operation of section 177, Indian Penal Code, was under section 52 of the Income-tax Act, 1922, will also not apply as it was repealed by the Income-tax Act of 1961 and that the sanction given by the Inspecting Assistant Commissioner of Income-tax invalid. In the fourth complaint, an additional ground was taken that section 277 of the Income-tax Act of 1961 is invalid and ultra vires of the Constitution of India an in excess of the administrative competence and opposed to article 14 of the Constitution.

The learned Chief Presidency Magistrate dismissed the petitioners holding that the points of law raised by the petitioners were such that could be agitated in the course of trial. He, therefore, though it unnecessary to give any finding on the points raised by the petitioner.

In respect of the first three complaints, the learned counsel appearing for the petitioner contended, firstly, that the complaint under section 177, Indian Penal Code, is incompetent as it must be deemed to have been implliedly repealed by to enactment of section 52 of the Income-tax Act, 1922, and, secondly, the prosecution under section 52 of the Income-tax Act of 1922 is also incompetent as the Income-tax Act of 1961 repealed the earlier Act of 1922, and the proceedings in respect of prosecutions under the Income-tax Act of 1922 were not saved by the repealing Act of 1961. In respect of the fourth complaint, he further contended that section 277 of the Income-tax Act of 1961 is ultra vires offending article 14 of the Constitution.

To appreciate th contentions of the learned counsel for the petitioner in respect of the first three complaints, it will be necessary to note the relevant provision of the Indian Penal Code and the Income-tax Act of 1922.

Section 177, Indian Penal Code, is as follows :

'Whoever, being legally bound to furnish information on any subject to any public servant, as such, furnishes, as true, information on the subject which he knows or has reasons to believe to be false, shall be punished with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both.....'

Section 52 of the Income-tax Act, 1922, is as follows :

'If a person makes a statement in a verification, mentioned in section 19A or section 20A or section 21 or section 22 or sub-section (2) of section 26A or sub-section (3) of section 30 or sub-section (3) of section 33, or furnished a certificate under sub-section (9) of section 18, which is false, and which he either knows or believes to be false, or does not believes to be true, he shall be punishable, on conviction before a Magistrate, with simple imprisonment which may extend to six months, or which fine which may extend to one thousand rupees, or with both.'

In this section, it may be relevant to note that by Act No. VII of 1939, the words 'be punishable, on conviction before a Magistrate, with simple imprisonment which may extent to six months, or with fine which may extend to one thousand rupees, or with both' were substituted for the words 'be deemed to have committed the offence described in section 177 of the Indian Penal Code.' Before the amendment, section 52 by its deeming clause adopted the offence under section 177, Indian Penal Code; but after amendment, it has created a substantive offence under the Act with to same punishment as provided under section 177, Indian Penal Code.

Though section 177, Indian Penal Code, and section 52 of the Income-tax Act of 1922 appear to be substantially the same, the former is wider in its scope where as the latter confines only to the matter mentioned it he said section. Section 177, Indian Penal Code, deals with the offence mention therein generally making any false information furnished by the person who is legally bound to give such information to any public servant, an offence, whereas section 52 of the Income-tax Act 1922 confines itself in respect of false information furnished it verification submitted by the assessee to the Income-tax Officer. It does not include even any false information furnished by an assessee in any proceedings under the Income-tax Act other than the statements made in verification mentioned in section 52, will come within the mischief of section 177, Indian Penal Code. The fact constituting an offence under section 52 of the Income-tax Act may very well be an offence under section 177, Indian Penal Code. But the fact constituting an offence under section 177, Indian Penal Code, need not necessarily be an offence under section 52 of the Income-tax Act as the scope of the latter, as pointed out already, is confined to the matters mentioned therein. Section 26 of the General Clauses Act provides that when two or more statutes create an offence of the same nature, the offender shall be liable to be prosecuted and punished under either or any of those statutes but shall not be liable to be punished twice for the same offence. Prima facie, from the facts of the present case, the prosecution of the petitioner under section 177, Indian Penal Code, and section 52 of the Income-tax Act of 1922 would appear to be competent by virtue of section 26 of the General Clauses Act. But even if both the charges are proved, there cannot be two punishments.

It is contended hat section 177, Indian Penal Code, must be deemed to have been repealed as it is repugnant to section 52 of the Income-tax Act of 1922 as both cannot co-exist in view of certain material differences between these two sections. The differences are said to be as follows :

Section 177, Indian Penal Code, is non-compoundable whereas the offence under section 52 of the Income-tax Act is compundable with the permission of the Inspecting Assistant Commissioner by verity of clause (2) of section 53 of the said Act. The prosecution under section 177, India Penal Code, can be instituted by any servant under section 195, Criminal Procedure Code, whereas the prosecution under section 53 of the Income-tax Act has to b instutited at the instance of the Inspecting Assistant Commissioner as provided under section 53(1) of the said Act. An offence under section 177, Indian Penal Code, is tribal by a Presidency Magistrate of the First Class or Second Class whereas the offence under section 52 cannot be tried by a Second Class Magistrate unless specially empowered by the Central Government. If penalty is levied under the Income-tax Act is respect of certain matters, no prosecution can be instituted by virtue of the provisions under section 28(4) of the Income-tax Act in respect of the same matters where as there is no such bar under section 177, Indian Penal Code. It is contended that the provisions cannot co-exist as they are repugnant to each other.

Before we consider this aspect, it may be necessary to consider whether Parliament intended to repeal section 177, Indian Penal Code, by enacting section 52 of the Income-tax Act. Both are Central Acts. It is very significant to note that the later enactment does not expressly repeal section 177, Indian Penal Code. In the absence of an express repeal, the courts do not learn in favour of an implied repeal. The court will always be against the repeal of an earlier statute when the Legislature has not expressly done so unless the out finds that the provisions of the two would lead to wholly incompatible or that the two statutes together would lead to wholly absurd consequences. In this context, it will be worthwhile to note the passage at page 344 of Cries on Statute Law (5th edition) quoting Dr. Lushington in 'The India', (1864) 33 L. J. Adm. 193, which is as follows :

'What words will established a repeal by implication it is impossible to say from authorities or decided case. If on the one hand the general presumption must be against such a repeal, on the ground that the intention to repeal, if any had existed, would have been declared in express terms, so on the other hand, it is not necessary they any express reference be made to the statute which it is intended to repeal. The prior statute would, I conceive, be replaced by implication if its provisions were wholly incompatible with a subsequent one; or if the two statue together would lead to wholly absured consequences; or if the entire subject-matter were taken away by the subsequent statute.'

It has, therefore, to be considered whether the subject-matter of both th enactment is the same and, if so, whether the later statute, namely, section 52 of the Income-tax Act, had taken away the entire subject-matter of section 177, Indian Penal Code, before we consider the repugnance or incomptibility between these two provisions. To determine whether later statute repeals by implication an earlier, it is necessary to scrutinies the terms and consider the true meaning and effect of the earlier Act. The Indian Penal Code is a codification of the common law offence s and comes under Item 1 in the Concurrent List III of the VIIth Schedule under the head 'Criminal Law, including all matters included in the Indian Penal Code at the commencement of the Constitution.' This item excludes offences against laws with respect to any of the matters specified in List I or List II. The Indian Income-tax Act comes under Item 82 in List I 'taxes on income other than agriculture income.' The purpose of the enactment of the Income-tax Act is to assess and collect tax on income and to enforce the provision of the said Act. To achieve the said purpose, the Income-tax Act created offences of its own, providing punishments in respect of certain matters by virtue of the power conferred on Parliament in Item 93 of List I, namely, offence against laws with respect to any of the matters in the list.

The object and the purpose, therfore, of these two enactment are different. The subject-matters of the offence under section 177, Indian Penal Code, is much wider and comprehensive than the subject-matter of the offence created under section 52 of the Income-tax Act for the purpose of enforcing effectively the provisions of the said Act. The Indian Penal Code is penal statute whereas the Income-tax Act is fiscal and deals with revenue. Can it be said in this background, that section 52 of the Income-tax Act, though it creates an offence similar to that of section 177, Indian Penal Code, but narrower in scope, take away the entire subject-matter provided under section 177, Indian Penal Code. The object and the purpose of the two enactment being different and the offences under one enactment being wider then the other, I am of the view that it would not have been intended by the later enactment to repeal the earlier. That this could not have been the intention of the Legislature can be gathered from some of the provisions of the Income-tax Act itself, as, for instance, in cases where penalty is levied in respect of certain matters provided in section 28(4) of the Act, the prosecution is barred in respect of the same matter under that Act. If the intention of the Legislature was that the prosecution would be neared even under any other enactment like the Indian Penal Code in respect of the same matter, it could have said so specifically that the prosecution is not only barred under the Income-tax Act but also under any other law. In the absence of such a provision, it is reasonable to inter that the intention of the Legislature in crating an offences under section 52 is not to repeal any other similar offence under any other law. Both the statutes are two distinct enactment and they can certainly stant together.

The learned counsel appearing of the petitioner relied upon the following decisions in support of his contention;

In the decision in Fortescue v. Vestry of St. Matthew Bethnal Green1, it has been held that there was an implied repeal of section 72 of Michael Angelo Taylors Act by section 119 of the Metropolis Management Act, 1855. While examining both the provisions of the earlier and later statutes, Charles J. observed that both the Acts deal with the question of paving and management of streets in the Metropolis. It is further observed at page 177 of the said decision as follows :

'It is true that section 72 of the earlier Act is not expressly repealed, but it is well-reorganized principle that an Act describing the quality of an offence, or prescribing a particular punishment for it, is implliedly repealed by a later Act altering the quality of the offences, or prescribing another punishment for it.'

In the present case, as already found by me, th subject-matter of the two enactment, namely, the Indian Penal Code and the Income-tax Act, not the same. The quality of the offence mentioned in section 177, Indian Penal Code, is not altered in section 52 of the Income-tax Act. Nor a different punishment is provided under the latter from what is provided under the former. The punishment provided under both the sections is the same, namely, simple imprisonment of six month or a fine of one thousand rupees, or both.

In Summers v. Halborn District Board of Works [1893] 1 Q. B. 612., it was held that section 6 of the Metropolitan Streets Act, 1867, and section 1 of the Metropolitan Streets Act Amendment Act, 1867, repealed section 65 of the Michael Angelo Taylors Act. In that case also, the subject-matter of both the Acts was the same and in the later Act, when there was a variation from the earlier which was entirely inconsistent with the later, it was held that there was an implied repeal of the earlier by the later statute. Even in that case, Lord Coleridge C.J. observed that difficulties arise in determining whether there would be repeal by implication in the particular case before the court.

In Smith v. Benabo [1937] 1 K. B. 518., it was held that section 75 of the General Paving Metropolis Act, 1855. There also the subject-matter of both the enactments was the same. These decisions, in my opinion, do not support the contention of the petitioner.

The learned counsel also relied upon a decision of the Supreme Court in Harish Chandra v. State of Madhya Pradesh : [1965]1SCR323 . The point that arose in that case was whether the extension of the Essential Supplies (Temporary Powers) Act, 1946, and the Indian Scrap Order of 1943 to Madhya Bharat repealed the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948, and the Madhya Bharat Scrap Control Order. Here also, the subject-matter of the Central Act and the State Act was substantially the same. But the Supreme Court held that the State Act was repealed by the Central Act as the provisions were not identical and could not, therefore, stand together. The Supreme Court pointed out that there were marked difference between the provisions of the two orders and found that it would not be possible for the two to stand together. The Supreme Court observed as follows at page 937 :

'What we desire to emphasise is that the two orders, though achieving substantially the same object, are not identical in their provisions. If that is so, it is obvious that on the extension to Madhya Bharat of the Indian Scrap Order, the Madhya Bharat Scrap Order would stand repealed and be replaced by the Indian law.'

If the subject-matter of the two enactments are not the same and if the subject-matter of the two sections, namely, section 177, Indian Penal Code, and section 52 of the Income-tax Act are not identical in that the earlier i s wider and the later is narrower in scope, the inconsistency or the repugnancy between these two provisions will not be a bar for them to co-exist and stand together. Only if it is found that the subject-matter of both the enactments and the subject-matter of both the offences are the same and identical, the question of inconsistency or repugnancy may arise and if the provisions of the earlier Act are repugnant or inconsistent with the later, it can be presumed that the later will prevail over the earlier and repeal the earlier. The learned counsel contended that the subject-matter of both the offences being the same and identical, they cannot stand together in view of the differences and inconsistencies between these provisions and that, therefore, section 177, Indian Penal Code, must be deemed to have been repealed by section 52 of the Income-tax Act, at least to the extent touching the matters provided under the later Act. I have already found that the subject-matter of the two enactments is not the same. but, however assuming that they are the same and identical, we have to see whether there are differences and inconsistencies between these two provisions and, if so, whether they are of such a nature that they could not stand together.

We have already noted the apparent differences between the two provisions, namely, (1) section 52 of the Income-tax Act is compoundable, whereas section 177, Indian Penal Code, is not; (2) the prosecution under section 52 of the Income-tax Act is to be instituted at the instance of the Inspecting Assistant Commissioner, whereas the prosecution under section 177, Indian Penal Code, is by any public servant provided under section 195, Criminal, Procedure Code; (3) the offence under section 177, Indian Penal Code, is triable by a Presidency Magistrate, a Magistrate of the First Class or Second Class, whereas the offence under section 52 cannot be tried by a Second Class Magistrate unless specially empowered by the Central Government; and (4) if a penalty is levied under the Income-tax Act, the prosecution for any offence under that Act relating to the same matter for which the penalty has been levied will be barred. It has been already noted that there was no difference either in the procedure to be adopted in respect of trial of both these offences or in the matter of punishment. These differences, in my opinion, are not at all inconsistent or repugnant to each other.

If the offence under section 52 of the Income-tax Act is compoundable, that may not be a reason to say that a person cannot be prosecuted under section 177, Indian Penal Code, since it is not compoundable. There cannot be any dispute that a person can be prosecuted under both the enactments if the facts disclosed the offences provided under the said enactments. If, for instance, in the present case, it is shown that the offence under the Income-tax Act was compounded, that may be a defence for him when he is prosecuted under that section; but he cannot escape the prosecution under section 177, Indian Penal Code, if the facts disclosed offences under that section. If, in a particular case, a person is prosecuted under several offences and some of them being compoundable, it cannot be said that the prosecution for non-compoundable offences. Similarly, if the prosecution has to be instituted at the instance of the Inspecting Assistant Commissioner for an offence under section 52 of the Act, it can still co-exist and stand together with the offence under section 177, Indian Penal Code, though the prosecution under that section could be instituted only by the public servant. If, under both these sections a person is prosecuted and it is shown that the prosecution under any one of these two sections is incompetent for the lack of proper sanction, to that extent the prosecution will be void. For instance, if proper sanction was not obtained under section 52, but the sanction under section 177, Indian Penal Code, is properly obtained, the prosecution under section 52 will be incompetent whereas the trial under section 177, Indian Penal Code, can proceed. Even in respect of trial of both these offences, it is provided that a Presidency Magistrate or a First Class Magistrate can try; but section 177, Indian Penal Code, can be tried by a Second Class Magistrate also, whereas the offence under section 52 of the Income-tax Act cannot be tried by a Second Class Magistrate unless he is specially empowered by the Central Government. This, in my opinion, does not make any difference. If a person is prosecuted for two offences, one triable by a superior court and the other by a lower court, the superior court can try both the offences. If this case, the Second Class Magistrate cannot try the offence under section 52 of the Income-tax Act. Certainly, the First Class Magistrate or a Presidency Magistrate, as the case may be, may try. In Craies on Statute Law, page 367, it is stated :

'Thus an Act authorising trial by Quarter Sessions can stand with an earlier Act enacting that the offence should be tried by the Queens Bench or at Assizes.'

If penalty is levied in respect of the matters mentioned in section 28 of the Act, by virtue of clause (4) of the said section, no prosecution for an offence against that Act could be instituted in respect of the same facts.

Even here, I do not find any inconsistency between the provisions of the two enactments. The prosecution under this Act will be barred if penalty is levied. It can be defended in a prosecution under section 177, Indian Penal Code, and section 52 of the Income-tax Act that the prosecution under section 52 is barred because of the imposition of penalty and, if true, the result would be that the prosecution under section 52 could be dropped; but still, the prosecution under section 177, Indian Penal Code, would continue. As already noted, it is very significant to note that section 28(4) has barred the prosecution in respect of an offence under that Act, namely, the Income-tax Act. Section 28(4) of the Act runs as follows :

'No prosecution for an offence against this Act shall be instituted in respect of the same facts on which a penalty has been imposed under this section.'

This provision does not, therefore, bar a prosecution for an offence under any other Act in respect of the same facts if they constitute an offence. Even assuming these differences exist it cannot be said that both the provisions are wholly incompatible or the application of both would lead to absurdity. Section 177, Indian Penal Code, is a common law offence.

In Archbolds Criminal Pleading, Evidence and Practice, 34th edition, page 4, it is stated that :

'If the offence is one which was already an offence at common law and the statute merely prescribes a new penalty or a new remedy, the remedy at common law is not taken away except by express negative words.'

It is, therefore, clear that even if a new remedy is provided under the later Act, it does not take away of offence under the common law. The learned counsel relied upon the decision in Smith v. Benabo [1937] 1 K. B. 518; [1937] 1 All E. R. 523. In that case, the proceedings were taken under a statute which had been repealed instead of being taken under one which was in force. In that case, section 122 of the Metropolis Management Act, 1855, in substance described exactly the same offence as that which was described by section 75 of the General Paving Metropolis Act, 1817. But the later Act provided different penalties and procedure from those imposed and prescribed by the earlier Act. In that context, Goddard J. observed as follows at page 525 :

'... it is a well settled rule of construction that, if a later statute again describes on offence created by a previous one, and imposes a different punishment, or varies the procedure, the earlier statute is repealed by the later statute.'

The Supreme Court also reiterated the same principle in Zaverbhai Amaidas v. State of Bombay : [1955]1SCR799 . in the following terms;

'It is a well-settled rule of construction that if a later statute agains describes an offence created by a previous one and imposes a different punishment or varies the procedure, the earlier statute is repealed by the later statute.'

In the instant case, we have noted more than once that the punishment imposed and the procedure prescribed in both the enactments are the same and there are no variations. The procedure to be adopted in the trial of the offence under both the enactments is summons procedure and there is no variation between these two enactments in respect of the procedure. Therefore, this decision will not apply to this case.

The penalties imposed by statute for offences already punishable under a prior statute are regarded as cumulative or alternative and not a replacing the penalty to which the offender was previously liable. Maxwell on the Interpretation of Statutes, 10th edition, at page 186, states :

'It would seem that an Act which (without altering the nature of the offence, as by making it felony instead of misdemeanor) imposes a new kind of punishment, or provides a new course of procedure for that which was already an offence, at least at common law, is usually regarded as cumulative and as not superseding the pre-existing law.'

In page 369 of Craies on Statute Law, it is stated thus :

'Subsequent Acts of Parliament in the affirmative, giving new penalties and instituting new modes of proceeding, do not repeal former methods and penalties ordained by proceeding Acts without negative words.'

In Om Prakash v. State of U. P. A. I. R. 1957 S. C. 458., in dealing with the point whether the Prevention of Corruption Act, 1947, repealed section 409, Indian Penal Code as far as public servants are concerned, it was observed that the legislature would not have intended in the normal course of things that a temporary statute like the Prevention of Corruption Act should supersede an enactment of antiquity viz., the Penal Code, even if the matter covered the same field.

In State v. Pandurang Baburao : AIR1955Bom451 ., it was held by the Full Bench that section 409, Indian Penal Code, was not impliedly repealed by the Prevention of Corruption Act as it was impossible to say that the provisions of the two were wholly incompatible or that the two statutes together would lead to wholly absurd consequences. It was pointed out in that case that there were inconsistencies between the two enactments in that the Prevention of Corruption Act provided a fferent procedure in respect of trial, sanction, evidence, etc. After giving due consideration to these inconsistencies, applying section 26 of the General Clauses Act, Chagla C.J., on behalf of the Bench, observed as follows at page 453, with which I respectfully agree :

'... when section 26 provides that the offender shall be liable to be prosecuted and punished under either or any of those enactments, what the legislature clearly intended was that he shall be liable to be prosecuted according to the procedure laid down under the enactment under which he was being prosecuted, and in the Full Bench decision also the view that we have taken is that the special procedure set up under the Prevention of Corruption Act does not entitle a public servant to insist that the only proceeding which could be instituted against him must be under the Special Act and not under the Criminal Procedure Code.

Therefore, in our opinion, section 26 has application provided the same act has been consisted an offence under more than on enactment. It makes no difference to the application of section 26 that the procedure laid down in the two enactments with regard to the prosecution of the offender is different or even if different sentences are provided under the two enactments.'

The Calcutta High Court in Amarendra Nath Roy v. State : AIR1955Cal236 . had taken a similar view. , 1922,has not repealed section 177, Indian Penal Code. Therefore, the prosecution under section 177, Indian Penal Code, in all the four complaints is competent.

In respect of the prosecution under section 52 of the Income-tax Act, 1922, in the first three complaints, it was contended by the learned counsel for the petitioner that by the repeal by the Income-tax Act of 1961, the prosecution in respect of the prior proceedings under the earlier Act were not saved and that, therefore, the prosecution under section 52 of the repealed Act is unsustainable.

Section 297 (1) of the Income-tax Act, 1961, repealed expressly the Income-tax Act, 1922, and, under clause (2), the matters referred to in clause (2)(a) to (m) have been saved notwithstanding the repeal of the Income-tax Act, 1922. It was contended that under clause (2) of section 297, the prosecution in respect of proceedings pending on the commencement of the Act of 1961 is not expressly saved and, therefore, it must be presumed that the legislature had not intended to save prosecutions in respect of proceedings pending at the commencement of the said Act.

Section 6 of the General Clauses Act is as follows :

'Where this Act, or any Central Act or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not -

(a) revive anything not in force or existing at the time at which the repeal takes effect; or

(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or

(e) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment at aforesaid;

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the Repealing Act or Regulation had not been passed.'

This section emphasises, therefore, that unless a different intention appears in the Repealing Act, ordinarily any legal proceeding can be instituted in respcct of any matter pending under the Repealed Act if that Act was in force at the time of repeal.

The principle under section 6 has been succinctly stated in State of Punjab v. Mohar Singh A. I. R. 11955 S. C. 84., which as follows :

'Whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow unless, as the section itself says, a different intention appears. In the case of a simple repeal there is scarcely any room for expression of a contrary opinion. but when the repeal is followed by a fresh legislation on the same subject the court would undoubtedly have to look to the provisions of the new Act, but only for the purpose of determining whether they indicate a different intention. The line of enquiry would be, not whether the new Act expressly keeps alive old rights and liabilities, but whether it manifests an intention to destroy them. The court cannot therefore subscribe to the broad proposition that section 6 of the General Clauses Act is ruled out when there is repeal of an enactment followed by a fresh legislation. Section 6 would be applicable in such cases also unless the new legislation manifests an intention incompatible with or contrary to the provisions of the section. Such incompatibility would have to be ascertained from a consideration of all the relevant provisions of the new law and the mere absence of a saving clause is by itself not material. The provisions of section 6 of the General Clauses Act will apply to a case of repeal even if there is simultaneous enactment unless a contrary intention can be gathered from the new enactment. Of course, the consequences laid down in section 6 of the Act will apply only when a statute or regulation having the force of a statute is actually repealed.'

It has, therefore, to be considered whether the repeal and the saving clause under clause (2) of section 297 has in fact destroyed the right to institute prosecution in respect of proceedings which were pending at the commencement of the Act. A careful scrutiny of the provisions will indicate that it was not the intention of the legislature to take away the right of instituting prosecution in the circumstances aforesaid.

Section 297 (2)(a) says that :

'Where a return of income has been filed before the commencement of this Act by any person for any assessment year, proceedings for the assessment of that person for that year may be taken and continued as if this Act had not been passes.'

The question is whether the words 'proceedings for the assessment of that person for that year' are so comprehensive, so as to include even the proceedings in respect of prosecution. I am of the view that the words are comprehensive in the context and that would include every proceeding till the assessment is realised. There cannot be any doubt that institution of prosecution is one of the modes to realise the amount assessed, besides the levy of punishment.

'Procedure' is defined in Shorter Oxford English Dictionary as 'a legal action or process; any act done by authority of a court of law; any step taken in a cause by either party'. In Ramanatha Iyers Law Lexicon, 'proceeding' is described as 'an act necessary to be done in order to attain a given end; it is a prescribed mode of action for carrying into effect a legal right.'

The term 'proceeding', therefore, is a very comprehensive term and, generally speaking, means prescribed modes of action for enforcing a legal right and hence it necessarily embraces the requisite steps by within judicial acts are invoked. In my view, the 'proceedings' referred to under section 297 (2)(a) will no doubt include the prosecution also and it is, therefore, saved.

In A. N. Lakshman Shenoy v. Income-tax Officer : [1958]34ITR275(SC) ., while considering the meaning of 'assessment' as occurred in section 13(1) of the Finance Act, 1950, it was held that the word 'assessment' must be taken in its comprehensive sense and the collocation of words in the said section, namely, 'levy, assessment and collection' would indicate that what was meant was the entire process by which the tax is ascertained, demanded and realised.

In Commissioner of Income-tax v. Bhikaji Dadabhai : [1961]42ITR123(SC) . a point arose whether the words 'levy, assessment and collection of income-tax' would include penalty. It was held that imposition of penalty being a necessary concomitant or incident of the process of assessment, levy and collection of tax would include penalty also. What happened in that case was that the Hyderabad Income-tax Act was repealed by the Finance Act, 1950. Sub-section (1) of section 13 of the Finance Act, 1950, provides :

'If immediately before the 1st day of April, 1950, there is in force in any Part B State...... any law relating to income-tax or super tax.... that law shall cease to have effect except for the purposes of the levy, assessment and collection of income-tax and super tax in respect of any period not included in the previous year for the purposes of assessment under the Indian Income-tax Act, 1922. ....'

From this, it was contended that what was saved after repeal was only 'levy, assessment and collection of income-tax' and penalty was not saved. The High Court held that 'penalty' was not saved as it was not expressly provided and, according to the High Court, what was saved was levy, assessment and collection of income-tax. The Supreme Court dissented from the view of the High Court and held that this will include 'penalty' also and that the proceedings for imposing a penalty could be continued even though it was not specifically saved.

It was contended by the learned counsel that section 297(2)(f) saves any proceeding from the imposition of a penalty in respect of any assessment completed before the 1st day of April, 1962, and that, therefore, when penalty has been specifically saved, if the Legislature had intended to save prosecutions also, it could have specifically said so. I am unable to agree with the contention of the learned counsel. The institution of prosecution is a necessary action to be taken for the purpose of levy, assessment and collection of the tax including penalty. If, on the other hand, the legislature intended to exclude and to destroy the right to institute prosecution, it could have excluded and to destroy the right to institute prosecution, it could have exclude such right expressly and specifically. The institution of prosecution is only a last resort, if necessary to be adopted by the authorities, for the purpose of levy, assessment and collection of tax. Normally, prosecution is not resorted to. Even if prosecution is instituted, it is made compoundable. These circumstances would show that the legislature would not have taken away the discretion of the authorities to institute prosecution in respect of assessment, levy and collection of tax before the commencement of the Act of 1961.

The learned counsel for the petitioner relied upon the decision in Commissioner of Income-tax v. Maharajah Pratapsingh : [1961]41ITR421(SC) . In that case, the Income-tax Officer issued a notice to the assessee under the old section 34 on August 8, 1948, for assessing the escaped income. The assessment was completed on August 26, 1948. Section 34 was amended by Act 48 of 1948, which came into force on September 8,1948. the proviso to section 34 after amendment required that the Commissioner must be satisfied that the case was fit for the issue of a notice under section 34. It was held that the amended provision indicated a different intention which excluded the application of clauses (b) and (c) of section 6 of the General Clauses Act. In that case, it is very significant to note that, though assent was obtained for the amendment to section 34 on September 8, 1948, according to the proviso to that section, it was deemed to have come into force on March 30, 1948. It is, therefore, clear by virtue of the proviso in that case that even in August, 1948, when notice was given by the Income-tax Officer, the amendment to section 34, namely, that the Commissioner must be satisfied that the case was fit for the issue of notice under section 34, was in force by virtue of the deeming clause. This decision will not certainly apply to this case as the repealed Act was in force at the commencement of the repeal.

In C. A. Abraham v. Income-tax Officer : [1961]41ITR425(SC) . the Supreme Court observed that when interpreting a fiscal statute, the court cannot proceed to make good deficiencies, if there by any, and it must interpret the statute as it stands and in case of doubt in a manner favourable to the taxpayer.

Taking into consideration that the institution of prosecution is not a part of the levy and assessment of the tax, but a consequence of failure to do certain things provided in the Act, I do not think any doubt can be entertained in respect of the interpretation of the saving clause. Thus, offences furing the continuance of a statute can be prosecuted and punished even after its repeal as the repealing Act had not oblitereated the offences committed when the earlier statute was in force. I am, therefore, of the view that the prosecution under section 52 of the Income-tax Act, 1922, is not taken away by the repealing Act and the prosecution under that section is competent and sustainable in law. It was also contended by the learned counsel that the repealing Act had provided under section 279 of the said Act that the Commissioner of Income-tax alone could sanction prosecution for the offence under section 277 of the new Act, and that the prosecution in the present cases was sanctioned by the Inspecting Assistant Commissioner which would be invalid. There is no substance in his argument. It is clear that under section 53(1) of the old Act, the Inspecting Assistant Commissioner can institute prosecution under section 52 of the said Act; but whereas, under the new Act, the Commissioner alone can institute prosecution under section 277 of the new Act which is similar to the offence under section 52 of the old Act. At the commencement of the new Act, sections 52 and 53 were in force. If that were so, applying the principle laid down in Commissioner of Income-tax v. Bhikaji Dadabhai : [1961]42ITR123(SC) , the Inspecting Assistant Commissioner would be the competent authority to institute prosecution under section 52 of the old Act. If prosecution is launched under the old Act, which was in force at the time of repeal, the entire procedure provided under the old Act alone should be followed.

In respect of the fourth complaint relating to the prosecution under section 277 of the Income-tax Act, 1961, which is a substantial reproduction of section 52 of the old Act, it is contended by the learned counsel in addition to the points raised in the other three complaints, that section 298(2)(b) is violative of article 14 of the Constitution in that it made a discrimination between the persons placed in similar position in respect of return of income filed after the commencement of the new Act for the assessment year ending on the 31st day of March, 1962, and persons who filed returns of income for the said period before the commencement of the new Act. I do not see any force in this argument at all. The learned counsel is unable to show as to how article 14 is attracted. The discrimination made of the new Act must be taken as one class and the persons who filed their returns after the commencement of the Act as another. In my view, this will be justifiable classification. As the Income-tax Act of 1961 in substance has reproduced the relevant provision dealt with in the old Act in respect of the first three complaints, the points which were taken in the first three complaints apply to this also and since I have answered all those points, it may not be necessary to repeat the same.

In the result, I find that there is no substance in any of the points raised by the learned counsel and all the petitions are dismissed.

Petitioner dismissed.


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