M/s . Mangalore Ganesh Bedi Works v. the State of Mysore & Another

Judgment

1 S.C.R. SUPREME COURT RF PORTS The appeal must therefore be allowed and the petition filed by the respondent dismissed. There will ho "" ""'" " '° oorogbo"'~ ppool ,.,,,,,.,, M/s .. MANGALORE GANESH BEDI WORKS THE STATE OF MYSORE & ANOTHER (S. K. DAS, J. L. KAPUR, A. K. SARKAR, 1f. HrnAYATULLAH and RAGHUBAll DAYAL, .JJ.) lnrlian Coinage-Enactment le?Jying tax in terms of naya paisa., if a taJ:ing measnrc-Constitntional ?Jalidity-Amendment -Effect-Indian Coinage Act, (Act. 3 of 1906), as amended by Indian coinage (Amendment) Act, (31 of 1955), s. 14-0onstilntion of India, Arts. 255, 197, 198, 199, 202. 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 cf .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 'vhat he \VOtild have paid if charged at the rate of 3 pies per rnpee. It was contended that such enhancen1ent of tax \Vas unconstitutional and illegal being in contravention of Article 255 0f the Constitution. Objection• by the appellant regarding the validity of tax were (1) that by the substitution of 2 naya paisas in place of 3 pies, a change '\vas brought in the tax exigihle by the Mysore Sales Tax Act and since this enactment enhancing the tax was eot enacted according to procedure for money hills not being in accordance with Articles 193, 199 and 207 of the constitution, the tax \Vas illegal and invalid;

(2) that the Indian coinage ~'\cti being a central i\ct dealing ,vith "coinage and legal tender" under item 3G of I~ist I, could not change the rate of tax under the Mysore Sales Tax Act. Union Territory D.f Tri/mra, Agtirtala Gopal Chanikr Dutta Choudhury Shah, J. Septemb<r 25. M/s. Mangalore .CantJh Bedi Works The State of Mysore Kapur, Held, that by substitution of new coinage, no enhancement of tax was enacted but was mere Iv a sbustitution of one coinage by another of equivalent value Und 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 procedure laid down in Art. 202 of the Comtitution, because of Art. 212 which prohibits the validity of any proceedings in a Je~islature from being called in question for irregularity of procedure and formalities of .'\rt. 255 a re 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 (Constrnction 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 \Vas it a taxing measure, but dealt mere I~. with the canversion of the old coinage into new coinage. CIVJL.APPELLATE JuRISDICTTON : 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 19fi0. N. C. Chatterjee and S. S. Shukln, for the appellant. N. S. Bindra. and P. D. .Menon, for the respond en ts. 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 ], 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 I 1 S.C.R. SUPREl\IE COURT REPORTS on a return of over Rs. ii8,:ln,422.:W Nps and the tax imposed on lhat sum at .112 Nps per rupee was Rs. I,rn, 728.44 Nps. The grievance of the appellant was that according to the Mysore Saks Tax Act he was liable to sales tax at the rate of :: pies for every rupee on the turnover and calculated on that basis the amount of tax would be Rs. 91,ti!JO/- but after the amendment of the Indian Coinage Act (Act :~ of l!l06) by the Amending Act 31 of 19iiii the rate of sales tax which was levied on the appellant's lkedis 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. 26f\ of the Constitution aml was therefore void and illegal. Under the amended Indian Coinage Act provision was made ins. 14 for the substitution of value expressed in annas, pice and pies by value expressed in naya pa.isa, which was the new coinage introduced under the amended Act. Section U reads as under:- "S.1-1(1)

The rupee shall be divided into one hut1dred units and the new coin r<'presenting such 1111it m<ty be designated by the Central Gowrnmcnt, 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 h11ndred, fifty and twenty five such new coins and shall, subject to the provisions of sub.section (I) and lftlb-section (2) of section 13 and to the extent specified therein. be a legal tender in payment or nu account acco~dingly. i.ll/s. Afangalora G:inesh Bedi ~VorkJ The State of .W;'sore J;apur, J. Mis. Jfangalore Ganesh Bedi WorkJ 1"he Stole of Af;'sore Kapur, J. 278 SUPRE!vIE COURT REPORTS [1963] SUPP. (2)

All coins issued under the authority of tliis 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 (I), 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 com 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, picc and pies shall be construed as references to that value expressed in new coins referred to in sub-section (I) converted thereto at the rate specified in subsection(:.!)". By sub-ss. (1) & (2) ofs.

14 therefore one rupee is divided into a hundred naya paisas, the old legal ti:nder of sixteen annas or sixty four picc 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 referencfs under ·any enactment to annas, pice or pies have to be construed as reference to the new coin referred to in sub-section (I). 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 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 rcfon\:d to in sub-section (l) of s. 14 of the Indian Coinage Act converted thereto at the rate specified in sub-s.( ::!) of s. 14 of that Act.

Two objections were taken to the validity of the tax : :Firstly it was argued that by the sub>tituti·)n of 2 naya paisas in place of 3 pies there was a change in the tax exigible by the l\f ysore 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 :!07 of the Constitution and as no such Money Bill was in traduced or passed for the enhancement of the tax, the tax was illegal ard invalid. In our opinion by substitution of n;w coinage i.e. naya paisas in place of annas, pice and pies no enhancement of tax was enacted but it was mer:Iy a substitution of one coinage by another of eqmvalei:t val~e: Even assuming that it is a taxing meas~re its validity cannot be challenged on the ground th:it lt ott:ends Arts. 197 to 199 and the procedure laid ?~wn m A~t'. 202 of the Constitution.

Article 21::! prohibits the vahd1.ty of any proceedings in a legislature of a State from. bemg c~lled in question on the ground of any alleged 1rregul~nty of procedure and Art. 255 lays down that reqmrements as to recommendation M/J. .\fan ·;11lrir1! Ganc:,/1 Hl·di TVvrh 5 The State o.f .Jl}'1ore J(apur, J. Mfs. Mangalore Ganesh Bedi Works The Stale of Mys1re Kapur, J. and previous sanction are to be regarded as matters of procedure only. It provides : Art. 255 "l\o Act of Parliament or of the Legislature of a State, and no provision in any such Act, shall be invalid by reason onlv 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 pa1sas is not. unconstitutional !!or is it a t:ixing measure hut 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 1 S.C.R. 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. A ppool disrnissed. M/s. Mangalore Ganesh Bedi Warks The State of M_uore Kapur, J.