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

1. The appellant, Amrit Banaspati Co. Ltd., hereinafter called the company, a joint stock company, and S. P. Bhasin, a shareholder of the company, filid writ petition No. 1003 of 1961 in the High Court of Judicature at Allahabad, challenging the validity of the U. P. Sales Tax Validation Act, 1958 (Act XV of 1958), hereinafter called the Validation Act, 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 Valuation 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 SCR 1   : (AIR 1961SC 1534) 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 decisions of the Allahabad High Court, one such decision being Ram Kishan Sunder Lal v. State of Uttar Pradesh, (1962) 13 STC 923 (All)  . 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 SCR 1 : (AIR 1961 SC 1934). It appears that the second question about the alleged error in calculating the tax at the rate of 1 anna instead of 6 naye paise per rupee was not raised before the Division Bench. Civil Appeal No. 887 of 1963 has been filed by special leave against this order of the High Court.

Court's reasoning:
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.