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CA Intermediate · Corporate and Other Laws · The General Clauses Act, 1897

The Finance Ministry issued a rule under a Central Act in 2019. In 2023 Parliament repealed and re-enacted that Act with modifications, but did not mention the rule. Mehta Traders relies on the 2019 rule. Under the General Clauses Act, 1897, what is the position of the rule, assuming it is not inconsistent with the new Act?

The 2019 rule continues in force. When an Act is repealed and re-enacted, subordinate rules made under the old Act survive to the extent they are consistent with the new Act, until replaced by rules made under the new Act.

  1. AIt lapses automatically because the parent Act is repealed
  2. BIt continues in force until superseded by rules made under the new ActCorrect
  3. CIt continues only for one year after repeal
  4. DIt continues only if the Supreme Court validates it

Explanation

Where an Act is repealed and re-enacted, rules and notifications made under the repealed Act continue in force, so far as not inconsistent with the new provisions, until superseded by those made under the new Act. Automatic lapse is therefore wrong.

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