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1961 (8) TMI 24 - HC - VAT and Sales Tax
Issues: Challenge to validity of U.P. Sales Tax (Validation) Act, Interpretation of Indian Coinage Act, Calculation of sales tax liability.
The writ petition challenged the validity of the U.P. Sales Tax (Validation) Act (XV of 1958) which validated a sales tax notification. The petitioner's main argument was based on the interpretation of the Indian Coinage Act, specifically regarding the calculation of sales tax at a rate expressed as one anna per rupee. The petitioner contended that the rate should be construed as being expressed in terms of naya Paisa, resulting in a lower tax liability. However, the judge disagreed with this interpretation, emphasizing the provisions of sections 6, 13, and 14 of the Indian Coinage Act. The judgment discussed the relevant sections of the Indian Coinage Act, highlighting the declaration of coins as legal tender and the introduction of the decimal system of coinage. Section 14 of the Act, divided into three sub-sections, addressed the decimal system of coinage, equivalence between old and new coins, and the conversion of values expressed in old coins to new coins. The judge explained the provisions of each sub-section, emphasizing the retention of the rupee as the standard coin and the method of rounding off calculations to the nearest new coin. Regarding the interpretation of sub-section (3) of section 14, the judge clarified that the value expressed in new coins does not necessarily mean whole new coins and may involve fractions. The judge rejected the petitioner's argument that fractions of new coins should be ignored, stating that the rounding off provision in sub-section (2) applies only when the entire amount of sales tax is tendered for payment. The judge concluded that for the purpose of substituting values in terms of new coins, only the rate is relevant, and there is no requirement to round off into whole coins at that stage. In conclusion, the judge found no merit in the petitioner's argument and dismissed the writ petition with costs, upholding the calculation of sales tax liability based on the interpretation of the Indian Coinage Act.
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