Repeal And Saving in Statutory Space and Its Relevance

Study of Repeal And Saving in Statutory Space assumes quite some big significance. Under the common law rule, the consequences of a repeal of a statute are very drastic. Except as to transaction past and closed, a statute after its repeal is  completely obliterated as it had never been enacted. The effect is to destroy all inchoate rights and remedies which have arisen under the repealed statute. Therefore, leaving aside the cases where proceedings were commenced, prosecuted and brought to a finality before the repeal, no proceedings under the repealed statute can be commenced or continued after repeal in absence of saving clause or general saving clause.

The confusion resulting from all these consequences give rise to the practice of inserting saving clauses in repealing statutes. The effect of repeal has been dealt under the provisions of Section 6 of General Clauses Act, 1897 and Section 159A and 160 of the Customs Act,1962.

Section 6 in the General Clauses Act, 1897

 Effect of repeal —Where this Act, or any 1 [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(b) affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or

(c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or

(d) affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or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

Section 6 of the General Clauses Act, 1897 applies to all types of repeals. This is applicable whether the repeal is express or implied. This section is not applicable to Rules as it is obvious from the reading of the provision. If a Rule is to be repealed , section 6 has no application.

The section (c) to (e) of the Section 6 of General Clauses Act,1897 is speaking briefly to prevent obliteration of statue in spite of its repeal to keep intact rights acquired or accrued and liabilities incurred during its operation and permit continuation or institution of any legal proceedings or recourse to any remedy before its repeal.

Applicability of Section 24 of General Clauses Act, 1897 under repealed statute

As a consequence of general principle that a statue after its repeal is wiped out from the statute book. By the insertion of saving clause, the consequence of a repeal can be avoided.

Similarly, Section 24 of the General Clauses Act, 1897, provides for continuance of any appointment, notification, order, scheme, rule, by law even under the repealed statute, when the same is not repugnant to the new enactment or not superseded. Even repealed has no effect on subordinate legislation(Rule) made under the repealed statute and it will continued under the new enactment as if enacted under the new statute.

Let us see how repeal takes its course under three different scenario:

Repeal by necessary implication 

It is well settled that that when a competent authority makes a new law which is totally inconsistent with the earlier and both cannot stand together any longer it must be construed that the earlier law had been repealed by later law.

In the W.P. No. 1466 of 2004, in the decided case on 25-8-2009, High Court of Calcutta, in the case of J. Ruia Cotex Ltd versus DGFT, has held that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision

Matter of State of Rajasthan v. Mangilal Pindwal 

Repeal has been discussed in the decided case of  State of Rajasthan v. Mangilal Pindwal, reported in MANU/SC/0549/1996, it has been held by the Hon’ble Supreme Court as follows :

“As pointed out by this Court, the process of a substitution of statutory provision consists of two steps; first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place. (See : Koteewar Vittal Kamath v. K. Rangappa Baliga & Co.). In other words, the substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. As regards repeal of a statute the law is thus stated in Sutherland on Statutory Construction “The effect of the repeal of a statute where neither a saving clause nor a general saving statute exists to prescribe the governing rule for the effect of the repeal, is to destroy the effectiveness of the repealed Act in future and to divest the right to proceed under the statute, which, except as to proceedings past and closed, is considered as if it had never existed.”

Matter of Union of India Vs Seahorse Hospitals Ltd

W.A. No. 2827 of 2012 and M.P. No. 1 of 2012, decided on 22-6-2016 by HIGH COURT OF JUDICATURE AT MADRAS, issue involved was import of machines by hospitals and  condition of providing free treatment therein to families of low income patients – This liability of importer can be enforced only during period when Notification No. 64/88-Cus. was in force, and not for subsequent period. In the instant case, Notification was  rescinded/repealed on 1-3-1994. It was held that  Revenue authorities could not cancel Customs Duty Exemption Certificates for 1994 to 1998 period, when the Notification per se was repealed and not in force.

It was held by the Court that the respondent/petitioner, who are benefited by the tax exemption are bound to discharge their liability during the period when the said Notification No. 64/88 was in force. The authorities can enforce such obligation only during that period when the notification was in force and not for the subsequent period. In this case, notification was rescinded on 1-3-1994 after the repeal of the Notification. Therefore, the authorities are not correct in cancelling the Customs Duty Exemption Certificates issued under Notification No. 64/88, dated 1-3-1988, saying that the respondent/petitioner had not complied with the conditions for the subsequent period, namely 1994 to 1998.

Saving Clause- How does this work ?

“Save as otherwise provided”- Mentioned in various Section 27(1) (B), 46(2) and 104(5) etc.

 This is called saving clause. It is used to preserve from destruction certain rights, remedies and privileges already existing. Saving means that it saves all the rights , it previously had, it does not give  any new rights. Saving clauses are introduced in the Act, safeguard right after repeal, which but for saving would have been lost.   Generally, saving clause is intended to save anything done or any action taken or any order or direction issued under a repealed provisions of law. By the saving clause, action taken under the repealed provisions must be treated to have been done under the new enacted laws. An earlier order or action taken can be saved only if there is a provision in new law by insertion of saving clause.

  • It is pertinent to mention here when there is no saving clause in the newly amended provisions or there is no manifest intention that the amendment which came into effect would operate retrospective and as such it has to be held that the enactment which came into effect was prospective in nature and not retrospective and as such the accused-applicant would be governed by the old provisions i.e. prior to 10-5-2013.” This view was held in the decided case of CENTRAL EXCISE COMMISSIONERATE, ROHTAK Versus DEEPAK GUPTA by THE HIGH COURT OF PUNJAB & HARYANA . On appeal by the Department, the  Session Judge had taken a view that amendment being not procedural but affected valuable right of accused was to be construed as prospective – Bail granted to  accused is governed by old provisions in absence of saving clause.
  •  In the decided case of SAMAY ELECTRONICS (P) LTD Versus C.C. (IMPORT)/(GENERAL), MUMBAI, CESTAT, WEST ZONAL BENCH, MUMBAI, in para 6, saving clause was discussed by citing  the Kolhapur Canesugar Works Ltd. v. Union of India – 2000 (119) E.L.T. 257 (S.C.) case, wherein the Apex Court considered the issue of omission of a statute in terms of Section 6 of the General Clauses Act, 1857 and it was held that :
  • “In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision.
  • In Dungarmal S Doshi v SPECIAL DIRECTOR, ENFORCEMENT DIRECTORATE in Review Petition No. 37/2011 in Appeal No. 146/2003, decided on 30-4-2012 .- After repeal of statute, rights and liabilities of individual as well as Directorate of Enforcement are saved. It was also held that whenever law is altered during the pendency of any action or  the rights of the parties are decided according to law as it existed when the action began unless new statute shows clear intention to vary such rights. There is no contrary explicit intention found in Section 49 of FEMA Act, 1999. Rather, a saving clause is specifically incorporated in sub-section (6) of Section 49 stating that repeal shall not affect or prejudice the application of Section 6 of General Clauses Act, 1897, except what is provided in the sub-section (3) whereby a limit of 2 years is prescribed for taking notice or cognizance of any prior violation of FERA Act.
  • PEAK AGENCIES Versus COMMR. OF CUS. (GENERAL), MUMBAI, 2015 (327) E.L.T. 572 (Tri. – Mumbai) IN THE CESTAT, WEST ZONAL BENCH, MUMBAI, issue involved was regarding revocation of Customs House Agent’s License and matter was  for decision whether revocation of licence under Regulations of 2004 was invalid as these were not in force during time of alleged contravention, which was done under old Customs House Agents Licensing Regulations, 1984. It was held that actions and omissions under 1984 regulations protected by way of saving clause , therefore continuation of proceedings under 2004 Regulations, not vitiated accordingly petition of CHA was  dismissed.

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Recovery of Duty Under Section 72 of the Customs Act, 1962

Imposition of Penalty on Customs Broker/CHA under Customs Law

Recovery of Drawback Amount Under Rule 18 of Drawback Rules 2017


One Comment

  1. Sir , excellent way to describe the topic logically as well as what Act or Rule per se. I am confused about section 6 of general clause act ,Act, and 159 A of customs act,. Now cleared confusion
    Thanks a lot sir

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