Statutory conversion of old coin values under the Coinage Act was read separately from rounding-off rules for actual tender.

Section 14(2) of the Indian Coinage Act was treated as a rule for payment of an ascertained sum in old coins, with rounding-off to the nearest new coin, while section 14(3) was treated as an interpretation clause for references in enactments and instruments to values expressed in annas, pice and pies. On that construction, the conversion of an old-coin tax rate into naye paise had to follow the statutory equivalent without importing the rounding-off mechanism used for tender under section 14(2). The majority held that the earlier substitution decision did not resolve this specific issue. Shah, J. dissented, reading section 14(3) as requiring exact conversion at the prescribed rate without rounding at the stage of liability.

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Issues: Whether section 14(3) of the Indian Coinage Act required references to values expressed in annas, pice and pies to be converted into new coins at their exact numerical equivalent only, or whether the conversion also attracted the rounding-off mechanism in section 14(2), so that the sales tax demand expressed as one anna per rupee had to be reduced to six naye paise per rupee.

Analysis: The majority treated section 14(2) as a rule dealing with tender of old coins in payment of an ascertained amount at one transaction, including the rounding-off of fractions to the nearest new coin. Section 14(3), by contrast, was held to be an interpretation clause governing references in enactments, notifications, rules, orders, contracts, deeds and instruments to values expressed in annas, pice and pies. On that construction, the reference had to be converted into the equivalent value in new coins at the prescribed rate, without importing the rounding-off machinery meant for actual tender under section 14(2). The majority further held that the earlier decision concerning substitution of new coinage did not decide the specific issue now raised.

Conclusion: The reference to one anna per rupee in the taxing notification had to be construed as six and one-quarter naye paise per rupee, rounded to six naye paise per rupee under the statutory conversion rule, and the challenge to the tax computation failed.

Final Conclusion: The appeals were held to be unsustainable because the sales tax was correctly worked out on the basis of the statutory conversion of old coin values into their new-coin equivalent.

Dissenting Opinion: Shah, J. construed section 14(3) as an interpretation provision requiring conversion only at the specified rate, without rounding-off at the stage of ascertaining liability; on that view, the demand should have been computed by substituting the exact new-coin equivalent of the old-coin rate.

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