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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. 276 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                             277 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.               278               (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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