RAGHUBAR DAYAl, J. for himself, Gajendragadkar C. J., Hidayatullah, K. C. Das Gupta JJ. - (1.) THE following Judgments of the court were delivered by :
(2.) THE appellant, Amrit Banaspati Co. Ltd., hereinafter called the company, a joint-stock company, and S. P. Bhasin. a shareholder of the company, filed 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 15/10/1960 and the order dated 1/02/1961, 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(-) 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(1). 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(1). It appears that the second question about the alleged error in calculating the tax at the rate of I 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. The other appeal no. 888 of 1963 is filed against the order of the division bench confirming the order of the Single Judge dismissing the writ petition by the appellant company against the assessment order for the years 1955-56, 1956-57 and 1957-58. The only point urged for the appellant in this writ petition had been that the Validation Act was invalid. The orders of the two courts below repelled the contention, in view of the decision of this court. in the Jute Mills Case(1). We did not allow the apellant to urge the grounds attacking the validity of the Validation Act in view of the decision of this court in the lute Mills' Case(1). The ,onlypoint which is urged before us now is that the tax should have been calculated at the rate of 6 naye paise per rupee and not at the rate of 1 anna per rupee, as laid down in the relevant provisions of the U.P. Sales Tax Act and the notification issued under its provisions. The contention is based on the provisions of the Indian Coinage Act. 1906 (Act III of 1906), hereinafter called the Coinage Act. as amended by Act XXXI of 1955. It is urged that in view of the provisions of sub-ss. (2) and (3) of s. 14 of the Coinage Act, as amended reference to 1 anna in the relevant Act and notification issued thereunder should be construed to be reference to 6 naye paise and that the wrong calculation by the Sales Tax Authority has resulted in over-assessment of tax. To appreciate the real contention urged. it is necessary to refer to the relevant provisions of the Coinage Act. Section 13' provides the extent up to which the tender ,of the various coins would be considered legal tender. Its relevant portions read: '13. (1) The coins issued under the authority of section 6 shall be a legal tender in payment or on account.(a) in the case of a rupee coin, for any sum. (b) in the case of a half-rupee coin, for any sum not exceeding ten rupees: (c) in the case of any other coin, for any sum R not exceeding one rupee: Porvided that the coin has not been 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 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 subsection (1 ) andsubsection (2) of section 13 and to theextent specified therein. be a legal tender inpayment 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 pice or one hundred and ninety-two pies to one hundred new coins. referred to in Ss. (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 instrument to any value expressed in annas, pice and pies shall be construed as references to that value expressed in new coins referred to in Ss. (1) converted theret o at the rate specified in subsection (2).'
(3.) THE various factors determining the application of the provisions of sub-s. (2) for the purposes of calculating the equivalent value of annas, pice and pies tendered at one transaction are several. THE first requisite is that the amount taken into consideration is the amount which is tendered at one transaction. THE other is that the amount tendered in any of those coins should be within the extent of legal tender mentioned in s. 13. When these two conditions are present, those coins would be legal tender in payment or on account at the rate of 16 annas, 64 pice or 192 pies to 100 naye paise which is the new coin referred to in sub-s. (1) of s. 14. This means that the number of annas, or pice or pies tendered have to be multiplied by 100/, 100/64 and 100/192 respectively, to get the equivalent number of new coins. In such arithmetical calculation there is the possibility that the equivalent number of naye paise be not an exact number and be a mixed number consisting of a whole number and a fraction. THEre is no coin of the equivalent to a fraction of a naya paisa in value. In such cases, there is not going to be payment of the amount due in full, if for the amount tendered in payment or on account there is no full equivalent of naye paises at the rate specified in sub-s. (2). It is for such contingency of a payment being not a full payment that sub-s. (2) further provides that the coins tendered will be legal payment at the specified rate calculated to the nearest new coin or where the new coin above or new coin below are equally near, to the new coin below. THE significance of this specified mode of calculation would be apparent from a concrete example. Nnas, 6 aNnas and 5 aNnas, calculated at the specified rate, would be equal to 43 3/4, 3nd 31 naye paise. According to the artificial calculation, they will however be ,,deemed to be legal tender for 44, 3nd 31 naye paise s respectively, as 44 and 31 naye paise are nearest to the calculated equivalent of Nnas and 5 aNnas and 37 naye paise is the next coin below 37 naye paise which are equally 'below 38 naye paise and above 37 naye paise and the artificial mode of calculation directs the equivalents 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 the 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 on 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 be good payment for 8 naye paise only and not for 10 naye paise which would be the case if each one-pice piece was treated as good payment for 2 naye paise, its equivalent, if it be converted singly to naye poise. 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 nave 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 sometimes it is higher, the difference being, however, very small. ;