The substitution of naya paisa for pies in the sales tax rate did not constitute an enhancement of tax but was merely a substitution of one coinage by another of equivalent value.

Headnote:
MYSORE SALES TAX ACT - S. 5 - INDIAN COINAGE ACT (3 OF 1906) - S. 14 - MYSORE EXISTING LAWS (CONSTRUCTION OF REFERENCES TO VALUES) ACT, 1957 (12 OF 1957) - S. 2, 3 - Substitution of naya paisa for pies in sales tax rate not enhancement of tax - No violation of Art. 265 of the Constitution - Mysore Existing Laws (Construction of References to Values) Act, 1957, validly converts references to pies into naya paisa.
Fact of the Case:

The appellant, a firm registered under the Mysore Sales Tax Act, challenged the validity of the sales tax assessment levied on them at the rate of 0.02 naya paisa per rupee instead of 3 pies per rupee, arguing that it amounted to an illegal enhancement of tax in violation of Art. 265 of the Constitution.
Finding of the Court:

The Court held that the substitution of naya paisa for pies in the sales tax rate did not constitute an enhancement of tax but was merely a substitution of one coinage by another of equivalent value. The Court also held that the Mysore Existing Laws (Construction of References to Values) Act, 1957, validly converted references to pies into naya paisa.
Issues: 1. Whether the substitution of naya paisa for pies in the sales tax rate amounted to an enhancement of tax in violation of Art. 265 of the Constitution? 2. Whether the Mysore Existing Laws (Construction of References to Values) Act, 1957, validly converted references to pies into naya paisa?
Ratio Decidendi: 1. The Court held that the substitution of naya paisa for pies in the sales tax rate did not constitute an enhancement of tax but was merely a substitution of one coinage by another of equivalent value. The Court reasoned that the Indian Coinage Act, 1906, provided for the conversion of old coins into new coins at a specified rate, and that the Mysore Existing Laws (Construction of References to Values) Act, 1957, validly converted references to pies into naya paisa. 2. The Court held that the Mysore Existing Laws (Construction of References to Values) Act, 1957, validly converted references to pies into naya paisa. The Court reasoned that the Act was enacted to ensure that existing laws continued to be effective after the introduction of the new coinage, and that the conversion of references to pies into naya paisa was necessary to achieve this objective.
Final Decision: The Court dismissed the appeal, holding that the substitution of naya paisa for pies in the sales tax rate was not an enhancement of tax and that the Mysore Existing Laws (Construction of References to Values) Act, 1957, validly converted references to pies into naya paisa.

Judgment

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.

2. The appellant is a firm registered under the Mysore Sales Tax Act and was assessed to sales tax 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 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 India 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 Beedis 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.

3. Under the amended Indian Coinage Act provision was made in S. 14 for the substitution of value expressed in anna, pice 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 & quarter-rupee shall be respectively equivalent to one hundred, fifty and twenty five such new coins and shall, subject to the provisions of sub-s. (l) and sub-s. (2) of S. 13 and to the extent specified therein, be a legal tender in payment or on account accordingly.

(2) All Coins issued under the authority of this Act in any denomination of annas, pice and pies shall, to the extent specified in S. 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-sec. (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-sec. (1) converted thereto at the rate specified in sub-sec. (2)."

4. By sub-secs. (1) and (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 ninetytwo 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-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 tend

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