SUSHILA N. RUNGTA (D) LRS. versus THE TAX RECOVERY OFFICER-16(2) AND ORS. on 30 October 2018

1. In this appeal, an order dated 03.01.1970 was passed by theCollector of Central Excise in which, it was ordered as follows:- “17. In view of the above-mentioned facts, the party charged isGentitled to the benefit of the amnesty granted by the Government.Even though he had initially failed to declare the gold, time wasavailable to him up to 31.5.66 to invest the gold into gold bondsand his intentions would have materialised but for the fact thatseizure of gold prevented him from tendering the Gold to the Bank,as it was not in his possession at that time.

H

18. While intention to invest the gold in gold bonds is concededfailure to declare was, no doubt, there. He was required by lawto declare his gold to the Government. Since he did not declarethis gold, even though he is given the benefit of the gold bondscheme, he has rendered himself liable to punishment for notdeclaring his gold, at the appropriate time, as required by law.

19. Considering all the facts and circumstances of the case andweighing the merits of the evidence available on record, I orderthat the gold shall be released to the party charged for invest ingold bond in pursuance of the application tendered by him to theState Bank of Indore in 1965.

20. I also order that for failure to declare the gold in his possession,which involves contravention of gold control rules, I impose uponhim a penalty of Rs.25,000/- (Rupees twenty-five thousands only)under Rule 126-I(16) of the Gold Control Rules, 1962(Corresponding to Section 74 of the Gold Control Act, 1968)”

2. Against the aforesaid order, an appeal was dismissed on08.02.1971. Exercising suo motu powers under the Defence of IndiaRules, a show cause notice dated 01.06.1971 was issued in which it wassought to confiscate the items of gold and enhance penalty that hadbeen imposed. This show cause notice was challenged by the grand-father of the present petitioner in a writ petition that was ultimatelydismissed by the Delhi High Court on 29.09.1972. This appeal is anappeal from the aforesaid judgment. This Court, on 09.08.1973, passedthe following order:

“Upon hearing the counsel for the parties, while counsel forRespondent No.3 waiving notice of motion, the Court directedstay of all further proceedings in pursuance of the impugnedproceedings dated 01.06.1971 pending final disposal of this appeal.The Court allowed C.M.Ps. 3056 and 3058 of 1973”

3. While the stay order of this Court continued, the Gold ControlAct itself was repealed.

This was effected by two sections, namely,:

1. Short title.- This Act may be called the Gold (Control) RepealAct, 1990.

A

B

C

D

E

F

G

H

A2. Repeal of Act 45 of 1968.- The Gold (Control) Act, 1968 ishereby repealed.

The statement of objects and reasons for this Act is as follows:“Gold control which regulated the domestic trade and movementof gold within the country was introduced on 9[th] January, 1963 aspart of the Defence of India Rules. Later on, the Gold ControlAct, 1968 was enacted with the broad objectives of controllingthe production, manufacture, supply, distribution, use and possessionof and business in gold, ornaments and articles of gold. The saidenactment was meant to supplement other preventive measuresto make circulation of smuggled gold difficult and its detectioneasier by extending the control over gold beyond the stage ofimport.

B

C

2. Over the past 22 years, the results achieved under the Acthave not been encouraging and the desired objectives for whichthe Act was introduced have not been achieved due to variousDsocio-economic and cultural factors in the vast multitude of thecountry’s population and the lack of administrative machinery.On the other hand, this regressive and purely regulatory Act hasgiven rise to considerable dissatisfaction in the minds of the publicas it has caused hardship and harassment to the artisans and smallEself-employed goldsmiths who have not been able to develop theirskills and earn proper living on account of the rigours which thisAct imposed upon them.

D

3. Taking these factors into consideration and the advice of expertswho have examined issues related to this Act, it is proposed toFrepeal the Gold (Control) Act, 1968.

4. The Bill seeks to achieve the said object.”

4. What has been argued by Mr. R. Venkataramani, learned seniorcounsel appearing on behalf of the appellant, is that considering that theGold Control Act itself has been repealed without a saving clause, SectionG6 of the General Clauses Act would not apply for the reason that theobjects and reasons show that the Act was sought to be repealed withoutany saving clause. He relied strongly upon the objects and reasonsusing the expression “regressive” and the fact that it has given rise to H

considerable dissatisfaction in the minds of the public as it has causedhardship and harassment to artisans and small self-employed goldsmiths.Therefore, according to him, the statement of objects and reasons clearlyevinces a contrary intention as a result of which, nothing will survive therepeal of this Act. This being so, a show cause notice which has beenupheld by the Delhi High Court would not survive.

5. On the other hand, Mr. Rupesh Kumar, learned counselappearing on behalf of the Revenue, has taken us though the impugnedjudgment and has argued that once there is a repeal simpliciter, withoutany savings clause, the whole object of such a repeal was so that thegeneral rule under Section 6 would apply, as a result of which the lawlaid down in State of Punjabvs. Mohar Singh, [1955] 1 SCR 893,would apply.

6. Having heard learned counsel for both sides, we are of theview that the statement of objects and reasons makes it clear that over22 years, the results achieved under the Act have not been encouragingand the desired objectives for which the Act has been introduced havefailed. Following the advice of experts, who have examined issues relatedto the Act, the objects and reasons goes on further to state that this Acthas proved to be a regressive measure which has caused considerabledissatisfaction in the minds of the public and hardship and harassment toartisans and small self-employed goldsmiths.

7. This being the case, we are of the opinion that the repealsimpliciter, in the present case, does not attract the provisions of Section6 of the General Clauses Act as a contrary intention is very clearlyexpressed in the statement of objects and reasons to the 1990 repealAct. In this behalf, it would be apposite to refer toNew India AssuranceCo. Ltd.vs. C. Padma and Another, (2003) 7 SCC 713 (para 10)

8. This Court noticed that, in a parallel instance of simpliciter repeal,Parliament realized the grave injustice and injury that had been causedto heirs of LRs of victims of accidents if their petitions were rejectedonly on the ground of limitation. This being the case, this Court foundthat a different intention had been expressed and, therefore, Section 6-Aof the General Clauses Act would not in that situation apply.

9. We find a similar situation in the present case. In point of fact,on going through the impugned judgment, it is clear that every time an A

B

C

D

E

F

G

H

Aamendment was made to the Defence of India Rules and/or repeal ofthe said rules had taken place, there was always an inbuilt savings clause.In fact, Section 116 of the Gold (Control) Ordinance No.6 of 1968 alsomade it clear that it went to the extent, in sub-section 2 thereof, bysaving show cause notices which, ordinarily, are not saved even if Section6 were to apply – See M.S. Shivanandavs. Karnataka State RoadBTransport Corporation and Others, [1980] 1 SCR 684 followingDirector of Public Works & Anr.vs. Ho Po Sang & Ors., [1961] 2All. ER 721.

10. This being the case, we are of the view that the show causenotice dated 01.06.1971, which is the subject matter of this appeal, noClonger survives. In this view of the matter, the appeal is disposed of.

CIVIL APPEAL NO. 10824 OF 2018(@ SLP (C) No. 26686/2016)CIVIL APPEAL NO. 10830 OF 2018(@ SLP (C) No. 29640/2016)CIVIL APPEAL NO. 10829 OF 2018(@ SLP (C) No. 29613/2016)DCIVIL APPEAL NO. 10831 OF 2018(@ SLP (C) No. 29641/2016)CIVIL APPEAL NO. 10825 OF 2018(@ SLP (C) No. 29552/2016)CIVIL APPEAL NO. 10833 OF 2018(@ SLP (C) No. 29796/2016)CIVIL APPEAL NO. 10832 OF 2018(@ SLP (C) No. 29740/2016)ECIVIL APPEAL NO. 10826 OF 2018(@ SLP (C) No. 29559/2016)CIVIL APPEAL NO. 10827 OF 2018(@ SLP (C) No. 29601/2016)CIVIL APPEAL NO. 10828 OF 2018(@ SLP (C) No. 29602/2016)

F11. Leave granted.

12. The impugned order records that owing to counsel not turningup in time, the reference of questions made under the Wealth Tax Act atthat point of time would remain unanswered. Given the fact that theshow cause notice and proceedings thereafter have now disappeared asa result of the repeal of the Gold Control Act, we give liberty to bothGparties to add to or amend or delete the questions in the Wealth TaxReference within a period of eight weeks from today. Once this is done,the writ petitions will taken up and decided on their merits. Consideringthese writ petitions are of 2005, we request the High Court to hear thesame expeditiously.

H

SUSHILA N. RUNGTA (D) LRS. v. THE TAX RECOVERYOFFICER-16(2) AND ORS. [R. F. NARIMAN, J.]

13. We, therefore, allow the appeals and set aside the commonimpugned judgment of the High Court.

Devika Gujral

Appeals allowed.

A

B

C

D

E

F

G

H