Full Judgment Text
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PETITIONER:
M/s. MANGALORE GANESH BEDI WORKS
Vs.
RESPONDENT:
THE STATE OF MYSORE & ANOTHER
DATE OF JUDGMENT:
25/09/1962
BENCH:
KAPUR, J.L.
BENCH:
KAPUR, J.L.
DAS, S.K.
SARKAR, A.K.
HIDAYATULLAH, M.
DAYAL, RAGHUBAR
CITATION:
1963 AIR 589 1963 SCR Supl. (1) 275
CITATOR INFO :
E&D 1965 SC 560 (13,14,21)
RF 1969 SC 903 (33)
ACT:
Indian Coinage-Enactment levying tax in terms of naya paisa,
if a taxing measure-Constitutional validity-Amendment Effect-lndian
Coinage Act, (Act 3 of 1906), as amended by
Indian coinage (Amendment) Act, (31 of 1955), s. 14-Consti-
tution of India, Arts. 255, 197, 198, 199, 202.
HEADNOTE:
The appellant was a registered firm under the Mysore Sales
Tax Act on which was imposed a tax of Rs. 1,16,728.44 Nps at
the rate of .02 Nps per rupee on a return of over Rs.58,
36,422-26 Nps . Its grievance was that according to Mysore
Sales Tax Act, it was liable to Sales Tax at the rate of 3
pies for every rupee but after the amendment of Indian
Coinage Act (Act 30 of 1906) by amending Act 31 of 1955, tax
was levied at the rate of .02 Nps per rupee, which made him
liable to pay more than what he would have paid if charged
at the rate of 3 pies per rupee. It was contended that such
enhancement of tax was unconstitutional and illegal being in
contravention of Article 255 of the Constitution.
Objections by the appellant regarding the validity of tax
were (1) that by the substitution of 2 naya paisleys in
place of 3 pies, a change was brought in the tax eligible by
the Mysore Sales Tax Act and since this enactment enhancing
the tax was not enacted according to procedure for money
bills not being in accordance with Articles 198, 199 and 207
of the constitution, the tax was illegal and invalid; (2) that
the Indian coinage Act, being a central Act dealing with
"coinage and legal-- tender" under item 36 of List 1, could
not change the rate of tax under the Mysore Sales Tax Act.
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Held, that by substitution of new coinage, no enhancement of
tax was enacted but was merely a sbusttution of one coinage
by another of equivalent value and even assuming that it was
a taxing measure, its validity could not be challenged on
the ground that it offends Arts. 197 to 199 and the
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procedure laid down in Art. 202 of the Constitution, because
of Art. 212 which prohibits the validity of any proceedings
in a legislature from being called in question for
irregularity of procedure and formalities of Art. 255 are
only matters of procedure.
Held,, further, that if the Indian Coinage Act had not the
effect of changing 3 pies into .02 Nps in the rate of tax
leviable under the Mysore Sales Tax Act, the Mysore Existing
Laws (construction of References to Values) Act, 1957, had
made a provision for charging the tax in terms of naya
paisas instead of pies, therefore, the levy of tax in terms
of naya paisas was not unconstitutional, nor was it a taxing
measure, but dealt merely with the canversion of the old
coinage into new coinage.
JUDGMENT:
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 194 of 1962.
Appeal by special leave from the order dated July 15, 1960,
of the Mysore High Court in Writ Petition No. 719 of 1960.
N.C. Chatterjee and S. S. Shukla, for the appellant.
N.S. Bindra and P. D. Men-on, for the respondents.
1962. September 25. The Judgment of the Court was
delivered by
KAPUR, J.-This is an appeal. by special leave against the
judgment and order of the High Court of Mysore dismissing
the assessee’s petition under Art. 226 of the Constitution
for quashing the order of assessment relating to two
quarters i. e. from April 1, 1957 to September 30, 1957,
under the Mysore Sales Tax Act, Act VI of 1948.
The appellant is a firm registered under the Mysore Sales
Tax Act and was assessed to sales tax
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on a return of over Rs. 58,36,422.26 Nps and the tax imposed
on that sum at .02 Nps per rupee was Rs. 1,16,728.44 Nps.
The grievance of the appellant was that according to the
Mysore Sales Tax Act he was liable to sales tax at the rate
of 3 pies for every rupee on the turnover and calculated on
that basis the amount of tax would be Rs. 91,690/- but after
the amendment of the Indian Coinage Act (Act 3 of 1906) by
the Amending Act 31 of 1955 the rate of sales tax which was
levied on the appellant’s Beth is 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 Art. 265 of the
Constitution and was therefore void and illegal.
Under the amended Indian Coinage Act provision was made in
s. 14 for the substitution of value expressed in annas, pace
and pies by value expressed in naya paisa, which was the new
coinage introduced under the amended Act. Section 14 reads
as under:-
"S.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 sub-
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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.
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(2) All coins issued under the authority of
this Act in any denomination 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
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 sub-section (1) converted therefore the
rate specified in sub- section(2)".
By sub-ss. (1) & (2) of s. 14 therefore one rupee is divided
into a hundred naya paisas, the old legal tender of sixteen
annas or sixty four pice or one hundred and ninety two pies
to a rupee remains legal tender which will be equivalent to
one hundred naya paisas and for purposes of calculation and
conversion of old coins into new coins, one old coin or a
number of such coins have to be calculated to the nearest
new coin or coins and where the new coin above and the new
coin below are equally near then the calculation is to the
new coin below. Sub-s. (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-
section (1). In other words wherever the old legal tender
i.e. annas, pice and pies
279
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-s.(2). On March 1, 1957, the Mysore Legislature enacted
the Mysore existing Laws (Construction of References to
Values Act, 1957) Act 12 of 1957. By s.2 of that Act
"’existing law"( was defined as an Act, Order, or regulation
having the force of law in Mysore State relating to any
matter other than any enactment, notification, rule or order
to which the provisions of sub-s.(3) of s. 14 of the Indian
Coinage Act are applicable. By s. 3 of that’ Act in every
such existing law reference to any value expressed in annas
pice or pies shall be construed as reference to that value
expressed in new coins referred to in sub-section (1) of s.
14 of the Indian Coinage Act converted thereto at the rate
specified in sub-s.(2) of s. 14 of that Act.
Two objections were taken to the validity of the tax :
Firstly it was argued that by the substitution of 2 naya
paisas in place of 3 pies there was it change in the tax
eligible 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 Arts.
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. In our opinion by
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substitution of new coinage i.e. naya paisas in place of
annas, pice and pies no enhancement of tax was enacted but
it was I merely a substitution of one coinage by another of
equivalent value. Even assuming that it is a taxing measure
its validity cannot be challenged on the ground that t
offends Arts. 197 to 199 and the procedure laid down in Art.
202 of the Constitution. Article (21) prohibits the
validity of any proceedings in a legislature of a State from
being called in question on the ground of any alleged
irregularity of procedure and Art. 255 lays down that
requirements as to recommendation
280
and previous sanction are to be regarded as matters of
procedure only. It provides
Art. 255 "No Act of Parliament or of the
Legislature of a State,- and no provision in
any such Act, shall be invalid by reason only
that some recommendation or previous sanction
required by this Constitution was not given,
if assent to that Act was given-
(a) where the recommendation required was
that of the Governor either by the Governor or
by the President ;
(b)....................................................
(c).....................................................
Consequently the tax cannot be challenged on the ground that
it is contrary to the provisions of the Constitution.
Secondly, it was submitted that the Indian Coinage Act,
being a Central Act dealing with " coinage and legal
tender" under item 36 of List I, could not change the rate
of tax under the Mysore Sales Tax Act. It is unnecessary to
decide this question because if the Central Act i.e. the
Indian Coinage Act, has not the effect of changing 3 pies
into .02 Nps in the rate of tax leviable under the Mysore
Sales Tax Act, the Mysore Existing Laws (Construction of
References to Values) Act, 1957, which has been set out
above has made a provision for charging the tax in terms of
naya paisas instead of pies. Therefore the levy of tax in
terms of naya paisas is not unconstitutional nor is it a
taxing measure but it deals merely with the conversion of
the old coinage into new coinage.
It was then argued that because of the order of the High
Court in a previous petition, under
281
Art. 226 whereby the provisional assessment was set aside
the principle of res judicata applied and a different
decision could not be given in the present petition which
was subsequently filed after the final assessment. In our
opinion there is no merit in that submission. The previous
petition upon which the appellant relies was to set aside
the provisional assessment and it was set aside in the
following language:
"Read Memo dated 7-6-1958 by the Advocate
General and Advocate for respondent, stating
that the respondents do not oppose the writ
petition being allowed and that the
provisional assessment may be set aside".
The previous decision setting aside the provisional
assessment does not indicate what issues were raised and
decided and there is no indication that the question now
raised before us was before the Court. That decision cannot
therefore operate as res judicata.
In our opinion this appeal is without merit and is dismissed
with costs.
Appeal dismissed.
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