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CA Intermediate · Corporate and Other Laws · Interpretation of Statutes

The General Clauses Act, 1897 applies to an Act passed in 2020 that says: 'Rules under this Act may be made by the Central Government.' The Act is later repealed and re-enacted with modifications in 2025, and no savings clause is included. Priya had incurred a liability under the 2020 Act in 2023 that was still unenforced at the time of repeal. What is the general position under the General Clauses Act?

Priya's liability continues. Under the General Clauses Act, repeal does not affect rights, liabilities or penalties already accrued under the repealed Act, and proceedings can continue as if there had been no repeal, unless the new law shows a contrary intention.

  1. AThe liability automatically ends, as repealed laws are treated as never having existed
  2. BThe repeal does not affect any right, liability or penalty already accrued under the repealed Act, and proceedings may continue as if the repeal had not occurred, unless a different intention appearsCorrect
  3. CThe liability continues only if the new Act is identical to the old Act
  4. DThe liability continues only if Priya consents

Explanation

The General Clauses Act saves rights, liabilities and penalties accrued before repeal, and allows investigation and legal proceedings to continue, unless a different intention appears. The absence of a savings clause in the new Act does not by itself defeat this. Option A is the position the Act is designed to prevent.

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