Exact monetary conversion under the Coinage Act applies at substitution stage; rounding off is confined to actual tender.

Section 14 of the Indian Coinage Act, 1906 requires an old monetary value in a notification or other instrument to be substituted by its exact equivalent in new coinage at the prescribed conversion rate. The rounding-off language in section 14(2) applies only when coins are actually tendered in payment or on account, and is not imported into section 14(3). Accordingly, a value expressed in annas may be converted into naye paise even if the result contains a fraction, and the fraction need not be ignored at the substitution stage. The construction requiring mandatory rounding off was rejected, and the impugned tax liability was sustained.

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Issues: Whether, on a proper construction of section 14 of the Indian Coinage Act, 1906, the value of sales tax expressed in annas in a notification had to be converted into whole naye paise by rounding off fractions, or whether it was sufficient to convert the amount at the prescribed rate even if the result was a fraction.

Analysis: Section 14(2) provides the rate of equivalence between the old coinage and the new decimal coinage and permits rounding off only when coins are tendered in payment or on account in a transaction. Section 14(3), which governs references in enactments, notifications, rules, orders, contracts and instruments, requires substitution of the old monetary value by its exact equivalent in new coins at the rate specified in section 14(2). The rounding-off language of section 14(2) is not imported into section 14(3). A value such as one anna, when converted into 6.25 naye paise, remains a value expressed in new coins even though it contains a fraction, and rounding off becomes relevant only at the stage of actual tender of the total amount.

Conclusion: The conversion could properly be made at the exact equivalent rate of 6.25 naye paise per rupee, and fractions were not required to be ignored at the substitution stage. The contention based on mandatory rounding off was rejected.

Final Conclusion: The writ petition failed because the challenged tax liability was not reduced by the suggested construction of the Coinage Act, and the impugned assessment was sustained.

Ratio Decidendi: Under section 14 of the Indian Coinage Act, 1906, substitution of an old monetary value into new coins is to be made by exact conversion at the prescribed rate, while rounding off applies only at the stage of actual payment or tender.

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