TaxTMI 
TaxTMI 
1964 (7) TMI 15
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....ct, and praying for the quashing of the assessment order dated October 15, 1960, and the order dated February 1, 1961, of the Sales Tax, Judge (Appeals), Meerut, in connection with the assessment of tax on the sale of vanaspati and other articles both on the ground that the sales tax was assessed at a higher rate than was permissible under a valid law and that the tax had been assessed at the rate of 1 anna and not at 6 naye paise per rupee. The learned single Judge of the High Court dismissed the writ petition as the Validation Act validating the relevant provision of the U.P. Sales Tax Act and the notification enhancing the rate of tax had been held valid by this Court in J.K. Jute Mills Co., Ltd. v. State of Uttar Pradesh [1962] 2 S.C.R. 1; 12 S.T.C. 429. and as the contention about the calculation of tax to be at the rate of 6 naye paise per rupee and not at the rate of 1 anna had been repelled in earlier decision of the Allahabad High Court, one such decision being Ram Krishna Sunder Lal v. State of Uttar Pradesh [1962] 13 S.T.C. 923., A special appeal to a Division Bench of the High Court was dismissed in view of the decision of this Court in the Jute Mills' case [1962] 2 S.C....
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....n defaced and has not lost weight so as to be less than such weight as may be prescribed in its case. * * * * (3) All nickel, copper and bronze coins which may have been issued under this Act before the 24th day of January, 1942, shall continue as before to be a legal tender in payment or on account for any sum not exceeding one rupee." Section 14, after the amendment introducing the decimal system of coinage, reads: "14. (1) The rupee shall be divided into one hundred units and the new coin representing such unit may be designated by the Central Government, by notification in the Official Gazette, under such name as it thinks fit, and the rupees, half-rupee and quarter-rupee shall be respectively equivalent to one hundred, fifty and twenty-five such new coins and shall, subject to the provisions of sub-section (1) and sub-section (2) of section 13 and to the extent specified therein, be a legal tender in payment or on account accordingly. (2) All coins issued under the authority of this Act in denominations of annas, pice and pies shall, to the extent specified in section 13, be a legal tender in payment or on account at the rate of sixteen annas, sixty-four ....
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...., 6 annas and 5 annas, calculated at the specified rate, would be equal to 43 3/4, 37 1/2 and 31 1/4 naye paise. According to the artificial calculation, they will however be deemed to be legal tender for 44, 37 and 31 naye paise respectively, as 44 and 31 naye paise are nearest to the calculated equivalent of 7 annas and 5 annas and 37 naye paise is the next coin below 37 1/2 naye paise which are equally below 38 naye paise and above 37 naye paise and the artificial mode of calculation directs the equivalent to be fixed, in such circumstances, to the new coins below. It is to be noted that each coin of one kind, tendered, is not considered as a unit for the purposes of calculation, but all the coins of one denomination are to be treated as one unit for this purpose. This is to ensure payment of the amounts due as fully as possible. This will again be clear from a concrete example. Seven one anna pieces are tendered, say, at one payment. If each separate piece be taken to be valid payment for 6 naye paise, the seven one anna pieces will be good payment for 42 naye paise only, but if taken as a whole, they would be good payment for 44 naye paise. Similarly, five one-pice pieces will....
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....t in value to a certain number of annas, pice or pies, coins tendered within the limits of legal tender. The provisions of sub-section (3) of section 14 provide for the conversion of the value of old coins into that of new coins at the rate specified in sub-section (2) and do not provide for conversion to be in accordance with the provisions of sub-section (2). The other expression would have been preferable if the Legislature had intended that the reference of values expressed in old coins be construed as references to values in new coins according to the mode of artificial calculation mentioned in sub-section (2). The provisions deal with the method of construction of the expression of the value in documents, be they private documents or be they enactments or notifications, or rules or orders. The object was to determine the equivalent value which may be taken to replace the value as expressed in old coins. If the contention urged for the appellant be accepted, the values expressed in annas, pice or pies will not, on conversion, be precisely equivalent but could be very much divergent and would adversely affect the interests of the persons to whom money be due or in certain ci....
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....na per rupee ... 8,05,726 65 Amount payable at 5 naye paise ... 6,44,661 32 Amount refundable ... 1,61,065 33 The appellant stood to lose by calculating the tax payable in terms of naye paise and therefore made up an account at the old coin rates. The Legislature could not have intended, by the provisions of sub- section (3), that a mere provision for working out the values in old coins into values in new coins should provide scope for such huge variations in the actual amounts to be paid or received. The process of conversion is not meant or designed to be a process for gaining more or less than what is rightfully due under a provision of law or under any contractual term. The conversion is a simple process necessitated by the exigency of payment to be in currency different from the one in which the payment was to be. We are therefore of opinion that what sub-section (3) of section 14 requires is that references to any value expressed in annas, pice and pies will be construed to such values expressed in new coins which would be absolutely equivalent to the value of the old c....
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....Amending Act 31 of 1955 the rate of sales tax which was levied on the appellant's beedis was 02 nPs. per rupee and thus the appellant was called upon to pay Rs. 25,038 more than he would have paid if he had been charged at the rate of 3 pies per rupee. It was contended on behalf of the appellant in the High Court and before us that this amounted to enhancement of tax which was illegal because the tax had not been increased in the manner provided under the Constitution and thus it was a breach of Article 265 of the Constitution and was therefore void and illegal." This Court further said, in para. 5, at page 590: "Two objections were taken to the validity of the tax: Firstly it was argued that by the substitution of 2 naye paise in place of 3 pies there was a change in the tax exigible by the Mysore Sales Tax Act and this could only be done if that enactment had been passed according to the procedure for Money Bills in the manner provided by Articles 198, 199 and 207 of the Constitution and as no such Money Bill was introduced or passed for the enhancement of the tax, the tax was illegal and invalid." It is clear that the contention was not that the tax should be calculated....
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....ns of sub-section (3). This is clear from the facts that the provisions of sub-section (3) have not been stated in full, and have been referred to up to the stage of references to the new coin referred to in sub-section (1) and that the last portion of the provisions of sub-sec- tion (3), i.e., "converted thereto at the rate specified in sub-section (2)" has not been mentioned. It is thus that the latter part of the observations happened to refer to the method of calculation and not to the rate specified in sub-section (2). The Court was, at the time, thinking of the value of 3 pies in terms of naye paise as calculated according to the provisions of sub-section (2), there being no contest before it that the value substituted to the equivalent of 3 pies for assessing the tax was not a correct value for substitution in place of 3 pies. We therefore do not construe the expression relied upon by learned counsel for the appellant to be a decision of the Court on the construction of the provisions of sub-section (3) of section 14 and are therefore of opinion that the observations in that case cannot be taken to be a decision of this Court on the actual point for determination now before ....
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.... Government, by notification in the Official Gazettee, under such name as it thinks fit, and the rupee, half-rupee and quarter-rupee shall be respectively equivalent to one hundred, fifty and twenty-five such new coins and shall, subject to the provisions of sub-section (1) and sub- section (2) of section 13 and to the extent specified therein, be a legal tender in payment or on account accordingly. (2) All coins issued under the authority of this Act in any denominations of annas, pice and pies shall, to the extent specified in section 13, be a legal tender in payment or on account at the rate of sixteen annas, sixty-four pice or one hundred and ninety-two pies to one hundred new coins referred to in sub-section (1), calculated in respect of any such single coin or number of such coins, tendered at one transaction, to the nearest new coin, or where the new coin above and the new coin below are equally near, to the new coin below. (3) All references in any enactment or in any notification, rule or order under any enactment or in any contract, deed or other instru- ment to any value expressed in annas, pice and pies shall be construed as references to that value expressed in n....
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.... is ascertained under the general law, and sub-section (3) comes in aid as an interpretation clause when the value is expressed in some law, contract or instrument governing a transaction not in terms of new coins, but of annas, pice or pies. Sub-section (3) does not attract the rule of rounding off at the stage of discharge of liability under any concrete transaction: it merely prescribes the value which shall be deemed to be substituted in any law, contract or instrument when the value is specified therein in terms of annas, pice or pies. It is attracted when liability declared in annas, pice or pies is to be ascertained in terms of new coins whereas sub-section (2) operates in considering whether a certain payment in annas, pice or pies discharges an ascertained liability. There is nothing in the statute which supports the view that what the Legislature intended by enacting sub-section (3) was computation of liability in terms of old coins and then conversion and rounding off of the total liability in terms of new coins. To interpret clause (3) in that manner would be to denude it of its true purpose as an interpretation clause, and to render it practically nugatory. If sub- ....