Case: Amrit Banaspati Co. Ltd. &amp; Anr Vs. State Of Uttar Pradesh And Ors

rounding of the fractions, if any resulting from such application. When there is any law, contract or instrument a reference to any value expressed in terms of annas, pice or pies, by sub-sec. (3) the reference has to be construed as if the value is expressed in terms of new coins at the rates specified in subsection (2).19. Liability to pay an amount in one transaction ascertained in terms of new coins may be discharged under sub-sec. (2) by tender of annas, pice or pies according to the table of equivalence and the fractions may be rounded of. But in the ascertainment of liability under a transaction, sub-sec. (2) does not come into play. Liability under a transaction is ascertained under the general law, and sub-sec. (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. Subsec. (3) does not attract the rule of rounding of at the stage of discharge of liability under 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-sec. (2) operates in considering whether a certain payment in annas, pice or pies discharges an ascertained liability.20. There is nothing in the statute which supports the view that what the Legislature intended by enacting sub-sec. (3) was computation of liability in terms of old coins and then conversion and rounding of the total liability in terms of new coins. To interpret cl: (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-sec.(3) is merely intended to serve as determinative of total liability under a transaction, the purpose is amply served by sub-sec. (2).21. The view I have expressed also finds support from a judgment of this Court in (1963) Supp 1 SCR 275 : (AIR 1963 SC 589 ). In that case, sales tax was imposed under the Mysore Sales Tax Act 6 of 1948 at the rate of three pies for every rupee of the turnover. On the application of S. 14 of the Indian Coinage (Amendment) Act, 1955, sales-tax leviable under the Mysore Sales Tax Act was computed at the rate of two new coins per rupee of the turnover, and a demand for Rs. 1,16,728.44 was made. The taxpayer contended that he was liable to pay Rs. 91,960/ - only being the amount of total tax liability computed at the rate of 3 pies per rupee of turnover. He challenged the additional demand by a petition in the High Court of Mysore on the plea that the Act which altered the incidence was a taxing measure and could only be enacted after complying with the provisions of Arts. 198, 199 and 207 of the Constitution relating to money bills, and the Mysore Existing Laws (Construction of Reference to Values) Act 12 of 1957 which gave effect to the amendment made by Act 31 of 1955, dealt with "coinage and legal tender", and was not within the competence of the State Legislature. In dealing with these contentions, this Court summarised the scheme of cls. (1), (2) and (3) of S. 14 and observed :"Sub-section (3) provides that all references under any enactment to annas, pice or pies have to be construed as reference to the new coin referred to in sub-sec.(1). In other words, wherever the old legal tender i. e., annas, pice and pies is mentioned in an enactment it is to be converted into naya Paisas and the naya Paisas are to be substituted in place of the old legal tender calculated in the manner laid down in sub-section (2)."The Court rejected the claim of the tax-payer that he was liable to pay tax computed at the rate of three pies per rupee only. If sub-sec. (3) of S. 14 was susceptible of the interpretation submitted on behalf of the State of Uttar Pradesh, it was wholly unnecessary to enter upon the question of the vires of the provisions, because between the computation of sales-tax on a total turnover of Rs. 58,36,422.25 nPs. at 2 naye Paise, and at the rate of 3 pies per rupee in the manner suggested, there would have resulted no discrepancy at all, and the contention of the tax-payer that he was liable to pay Rs. 91,690/-had to be accepted. But this Court upheld the claim of the Sales Tax Department that the computation had to be made by substituting two naye paise in the section of the Mysore Sales Tax Act, which imposed liability for payment of tax, and the total demand for tax computed on the footing of that substitution was properly made. If the interpretation which is now suggested on behalf of the State be accepted, the assessee in Mangalore Ganesh Beedi Workss case, 1963 Supp 1 SCR 275 : (AIR 1963 SC 589 ) was bound to succeed.22. In the present case by the notification issued on March 31, 1956, the liability for payment of sales-tax was to be computed at the rate of one anna in a rupee of the turnover. By virtue of S. 14(3) of the Inidan Coinage Act, for an anna mentioned in the notification consequently, "interest on securities" which is the substituted rate of involved a fraction by the process of rounding of at the rate specified in sub-sec. (2), the fraction of new coins will be omitted and the nearest new coins i. e., six new coins will be deemed to be substituted in the statute. Liability for sales tax after the amendment of the Coinage Act will, therefore, be at the rate of 6 new coins for every rupee of sale price.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]8. It is therefore clear that the provisions of sub-s. (2) provide for the conversion of old coins into new at the time of payment or of accounting, and then too for the conversion of the old coins within the limit of the extent to which they are legal tender, which means that one cannot insist on paying a total sum of several rupees in naye paise calculated in the manner laid down in sub-s. (2) of S. 14 and that two, factors affect the determination of the number of naye paise equivalent in value to the value of the old coin of annas, pice or pies tendered, the two factors being the rate specified and the artificial way of calculation. The result of the artificial way of calculation is that sometimes equivalent number of naye paise is less than the actual value of the old coins at the specified rate and sometime it is higher, the difference being, however, very small.The legislature could not have intended, by the provisions of sub-s. (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.12. We are therefore of opinion that what sub-s. (3) of S. 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 coins when their value is converted at the rate of 16 annas, 64 pice and 192 pies to 100 nayeis place on the last sentence but this cannot be taken as the decision of the Court on the question that sub-s. (3) of S.14 made reference not only to the rate of conversion but also to the mode of calculation, as that question had not been considered in any manner. The last sentence was a sort of a paraphrase of what had been said earlier in the quotation with respect to the provisions of sub-s. (3). This is clear from the facts that the provisions of sub-s. (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-s. (1) and that the last portion of the provisions of sub-s. (3) i. e. converted thereto at the rate specified in sub-s. (2) has not been mentioned. Ii is thus that the latter part of the observations happened to refer to the method of calculation and not to the rate specified in subs. (2). The Court was, at the time, thinking of the value of 3 pies in terms of naya paise as calculated according to the provisions of subs. (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-s. (3) of S. 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 us.16. We therefore hold that the High Court is right in construing the provisions of sub-s.(3) of S. 14 of the Indian Coinage Act to mean that references to values in any enactment, notification, rule or order under any enactment or in any contract, deed or instrument, expressed in old coins should be construed to be references to values expressed in new coins by converting the old values at the rate of 16 annas, 64 pice and 192 pies to 100 naya paise.