T.S. Baliah vs T.S. Rangachari

Krishnaswamy Reddy, J.—The petitioner in all these cases is the same. They are dealt with together as the points raised 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 returns 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 and he had deliberately concealed material particulars of his income in spite of

notices 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, 1960-61 respectively were filed before the Chief Presidency Magistrate, Madras, u/s 52 of the Income Tax Act, 1922,

and u/s 177, I.P.C. The fourth complaint which is in respect of the assessment year, 1961-62 was filed u/s 277 of the Income Tax Act of 1961

and u/s 177, I.P.C.

The revision petitioner raised preliminary objection before the learned Chief Presidency Magistrate in respect of the first three complaints on the

grounds that the complaint u/s 177, I.P.C. was not maintainable in law as the operation of Section 177, I.P.C. was excluded to cases relating to

Income Tax matters, that the prosecution u/s 52 of the Income Tax Act, 1922, will also not apply as it was repealed by the Income Tax Act of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 was 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 and in excess of the

administrative competence end opposed to Article 14 of the Constitution.

The learned Chief Presidency Magistrate dismissed the petitions holding that the points of law raised by the petitioner were such that could be

agitated in the course of trial. He, therefore, thought 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 u/s 177, I.P.C. Is

incompetent as it must be deemed to have been impliedly repealed by the enactment of Section 52 of the Income Tax Act, 1922, and secondly,

the prosecution u/s 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 the contentions of the learned counsel for the petitioner in respect of the first three complaints, it will be necessary to note the

relevant provisions of the Indian Penal Code and the Income Tax Act of 1922,

Section 177 I.P.C. 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 reason 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 Subsection (3) of Section 30 or Sub-section (3) of Section 33, or furnishes 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 believe to be true, he shall be punishable, on conviction before a

Magistrate, with simple imprisonment which may extend to six months, or with 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 extend 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 u/s 177 I.P.C.; but after amendment, it has created a substantive offence tinder the Act with the same punishment as

provided u/s 177 I.P.C.

Though Section 177 I.P.C. and Section 52 of the Income Tax Act of 1922 appear to be substantially the same, the former is wider in its scope

whereas the latter confines only to the matters mentioned in the said section. Section 177 I.P.C. deals with the offence mentioned therein generally

making any false information furnished by a person who is legally bound to give such information to any public servant, an offence whereas Section

52 of the Income Tax Act of 1922 confines itself in respect of false information furnished in the verification submitted by the assessee to the

Income Tax Officer. It does not include even any false information furnished by an assessee in any proceeding under the Income Tax Act other

than the verification mentioned in the said section. It, therefore, appears that any false statement in the 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 I.P.C. The facts constituting an

offence u/s 52 of the Income Tax Act may very well be an offence u/s 177, I.P.C. But the facts constituting an offence u/s 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 these 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 u/s 177 I.P.C. 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 that Section 177 I.P.C. 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, I.P.C. Is non-compound-able whereas the offence u/s 52 of the Income Tax Act is compoundable with the permission of the

Inspecting Assistant Commissioner by virtue of Clause (2) of Section 53 of the said Act. The prosecution u/s 177 I.P.C. can be instituted by any

public servant under c whereas the prosecution tinder Section 53 of the Incometax Act has to be instituted at the instance of the Inspecting

Assistant Commissioner as provided u/s 53 (1) of the said Act. An offence u/s 177 I.P.C. is triable by a Presidency Magistrate, a Magistrate of

the First Class or Second Class whereas the offence u/s 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 in respect of certain matters, no prosecution can be instituted by virtue of the

provision u/s 28(4) of the Income Tax Act in respect of the same matters whereas there is no such bar u/s 177 I.P.C. It is contended that both the

provisions cannot co-exist as they are repugnant to each other,

Before we consider this aspect, it may be necessary to consider whether the Parliament intended to repeal Section 177 I.P.C. 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 I.P.C. In the absence of any express repeal, the courts do not lean 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 court finds that the provisions of the two enactments are wholly

incompatible or that the two statutes together would lead to wholly absurd consequences. In this con-, text it will be worthwhile to note the

passage at page 344 of Craies on Statute Law (5th Edition) quoting Dr. Lushington in -- ''The India'', (1864) 33 L. J. P. M. & A 193 which is as

follows:

What words will establish a repeal by implication it is impossible to say from authorities or decided cases. 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 that any express reference be made to the statute which it is intended to repeal. The prior statute

would, I conceive, be repealed by implication if its provisions were wholly incompatible with a subsequent one; or if the two statutes together

would lead to wholly absurd 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 the enactments 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, I.P.C. before we consider the repugnancy or

incompatibility between these two provisions. To determine whether a later statute repeals by implication an earlier, it is necessary to scrutinize the

terms and consider the true meaning and effects of the earlier Act. The Indian Penal Code is a codification of the common law offences 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 agricultural income"". The purpose of the enactment of

Income Tax Act is to assess and collect tax on income and to enforce the provisions 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 the Parliament in Item 93

of List I, namely offences against laws with respect to any of the matters in the list.

The object and the purposes, therefore, of these two enactments are different. The subject-matter of the offence u/s 177, I.P.C. is much wider

and comprehensive than the subject-matter of the offence created u/s 52 of the Income Tax Act for the purpose of enforcing effectively the

provisions of the said Act. The Indian Penal Code is a 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 creates an offence similar to that of Section 177, I.P.C. but narrower in scope,

takes away the entire subject-matter provided u/s 177 I.P.C.? The object and the purpose of the two enactments being different and the offence

under the enactment being wider than 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 barred 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 infer that the intention of the Legislature hi creating offence

u/s 52 is not to repeal any other similar offence under any other law. Both the statutes are two distinct enactments and they can certainly stand

together.

The learned Counsel appearing for the petitioner relied upon the following decisions in support of his contention.

In the decision in Fortescue v. Vestry of St. Mathew Bethnal Gree, (1891) 2 QB 170, it has been held that there was an implied repeal of

Section 72 of Michael Angelo Taylor''s 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 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 a well-recognized principle that an Act describing the quality of an

offence, or prescribing a particular punishment for it, is impliedly repealed by a later Act altering the quality of the offence, or prescribing another

punishment for it,

In the present case, as already found by me, the subject-matter of the two enactments, namely, Indian Penal Code and the Income Tax Act is

not the same. The quality of the offence mentioned in Section 177, I.P.C. 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 months or a fine of one thousand rupees, or both.

In Summers v. Holborn District Board of Works, (1893) 1 QB 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 Taylor''s 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 KB 518, it was held that Section 75 of the General Paving Metropolis Act, 1817 was impliedly repealed by

Sections 122 and 123 of the Metropolis Management 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 Harishchandra Vs. State of Madhya Pradesh, . 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 differences 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, I.P.C. and

Section 52 of the Income Tax Act are not identical in that the earlier is wider and the latter 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 latter, it can be presumed that the latter 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 I.P.C. 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-lax Act is compoundable

whereas Section 177 I.P.C. is not; (2) the prosecution u/s 52 of the Income Tax Act is to be instituted at the instance of the Inspecting Assistant

Commissioner whereas the prosecution u/s 177 I.P.C. Is by any public servant provided u/s 195, Cri.P.C. (3) the offence u/s 177 I.P.C. Is triable

by a Presidency Magistrate, a Magistrate of the First Class or Second Class whereas the offence u/s 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 u/s 52 of the Income Tax Act is compoundable, that may not be a reason to say that a person cannot be prosecuted u/s 177

I.P.C. 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 u/s 177 I.P.C. 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 along with compoundable offences is incompetent. If in such

a case, the parties compound the compoundable offences, the prosecution could still continue with the trial of non-compoundable offences.

Similarly, if the prosecution has to be instituted at the instance of the Inspecting Assistant Commissioner, for an offence u/s 52 of the Act, it can still

co-exist and stand together with the offence u/s 177 I.P.C. 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 u/s 52; but the sanction u/s

177 I.P.C. is properly obtained, the prosecution u/s 52 will be incompetent whereas the trial u/s 177 I.P.C. 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 I.P.C. can 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. In this case, the Second Class Magistrate cannot try the offence u/s 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 Queen''s 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 u/s 177 I.P.C. and Section 52 of the Income Tax Act that the prosecution u/s 52 is barred

because of the imposition of penalty and if true, the result would be that the prosecution u/s 52 could be dropped; but still, the prosecution u/s 177

I.P.C. 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 I.P.C. Is a common law offence.

In Archbold''s 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 to provided under the later Act. It does not take away the offence under the

common law. The learned Counsel relied upon the decision in 1937 1 KB 518. In that case, the proceedings were taken under a statute which has

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 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.

The Supreme Court also reiterated the same principle in Zaverbhai Amaidas Vs. The State of Bombay, in the following terms)

It is a well settled rule of construction that if a later statute again 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 as

replacing the penalty to which the offender was previously liable.

Maxwell, on the Interpretation of Statutes, I0th 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 misdemeanour) 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 Crates OB Statute Law, it is stated thus:

Subsequent Acts of Parliament in the affirmative, giving new penalties and instituting new modes of proceedings, do not repeal former methods

and penalties ordained by preceding Acts without negative words"".

In Om Prakash Gupta Vs. State of U.P., in dealing with the point whether the Prevention of Corruption Act, 1947 repealed Section 409

I.P.C. 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 the The State Vs. Pandurang Baburao, it was held by the Full Bench that Section 409 I.P.C. 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 different 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 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 would 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 constituted an offence under more than one 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 Vs. The State, , had taken a similar view.

For the foregoing reasons, I hold that Section 52 of the Income Tax Act, 1922 has not repealed Section 177 I.P.C. Therefore, the prosecution

u/s 177 I.P.C. In all the four complaints is competent.

In respect of the prosecution u/s 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 was not

saved and that, therefore, the prosecution u/s 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

as 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 respect of any matter pending under the repealed Act if that Act was in force at the time of repeal.

The principle u/s 6 has been succinctly stated in State of Punjab v. Mohar Singh, AIR 1955 SC 84 which is as follows:--

Wherever 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 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 passed."" 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, institution of prosecution is one of the modes to realise the amount assessed, besides the levy of

punishment.

""Proceeding"" is denned 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 Iyer''s Law Lexicon, ""Proceeding"" is described as ""an act necessary to be done in order to

attain a given end; 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 which judicial acts are invoked. In my view, the ""proceedings"" referred to u/s 297(2)

(a) will no doubt include the prosecution also and it is, therefore, saved.

In A.N. Lakshmana Shenoy Vs. The Income Tax Officer, Ernakulam and Another, , while considering the meaning of ""assessment"" as

occurred in Section 13(1) of Finance Act, 1950, it was held that the word ""assessment"" must be taken in its comprehensive sense and the

collection 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, Andhra Pradesh Vs. Bhikaji Dadabhai and Co., , 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, 19SO provided:

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 riot

saved, The High Court held that ''penalty'' was not eaved 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 prosecution 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 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 that 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 I, T. Commr. B. & O. v. Pratabsingh, AIR 1961 SC 1026. In that case, the

Income Tax Officer issued notice to the assessee under the old Section 34 on 8-8-1948 for assessing the escaped income. The assessment was

completed on 26-8-1948. Section 34 was amended by Act 48 of 1948 which came into force on 8-9-1948. Proviso to Section 34 after

amendment required that the Commissioner must be satisfied that the case was fit for the issue of notice u/s 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 8-9-1948. according to the proviso to that

section, it was deemed to have come into force on 30-3-1948. 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 ease was

fit for the issue of notice u/s 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, Uppoottil, Kottayam Vs. The Income Tax Officer, Kottayam and Another, , the Supreme Court observed that when

interpreting a fiscal statute, the court cannot proceed to make good deficiencies if there be any and it must interpret the statute as it elands and in

case of doubt in a manner favourable to the tax-payer.

Taking into consideration that the institution of prosecution is not a part of the lew 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

during the continuance of a statute can be prosecuted and punished even after its repeal as the repealing Act had not obliterated the offences

committed when the earlier statute was in force. I am, therefore, of the view that the prosecution u/s 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 u/s 279 of the said Act that the Commissioner of Income Tax alone could sanction prosecution for the

offence u/s 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 u/s 53 (1) of the old Act, the Inspecting Assistant Commissioner can institute prosecution u/s 52 of the said Act, but whereas

under the new Act, the Commissioner alone can institute prosecution u/s 277 of the new Act which is similar to the offence u/s 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, Andhra Pradesh Vs. Bhikaji Dadabhai and Co., , the Inspecting Assistant Commissioner would be the competent authority to

institute prosecution u/s 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 u/s 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 297(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 return

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 between the persons who filed the returns before the commencement 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 provisions dealt with, of 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 peti tions are dismissed.