PATEL TEA MART Vs. STATE OF GUJARAT

JUDGEMENT

(1.) THE following questions of law are referred to us by the Gujarat Sales Tax Tribunal, Ahmedabad : " (1) Whether, on the facts and in the circumstances of these two cases, the Tribunal was right in law in holding that the business done by the abovenamed Chimanlal was really the business of the applicant and whether that finding was vitiated by taking into account irrelevant evidence and by ignoring the relevant evidence as alleged ? (2) If yes, whether, on the facts and in the circumstances of these two cases, the Tribunal was right in law in confirming the levy of tax upon the applicant's turnover of sales as worked out from the purchases of Rs. 2,40,067 of M/s. Anil and Co. so far as Samvat Year 2024 was concerned and purchases of Rs. 1,37,824 of M/s. Anil and Co. so far as Samvat Year 2025 was concerned ? (3) Whether, on the facts and in the circumstances of these two cases, the Tribunal was right in law in confirming the penalties imposed under section 36 (3a) of the Bombay Sales Tax Act, 1959, in respect of Samvat Years 2024 and 2025 ?"

(2.) WHEN we read the aforesaid questions of law referred to us by the Sales Tax Tribunal, it was not possible for us to agree that the Sales Tax Tribunal has referred to us a question of law, which is set out at point No. (1) hereinabove. From the very question as formulated by the Sales Tax Tribunal, it is clear to us that question No. (1) which is referred by the Tribunal to us, is not a question of law. The very question shows that the Tribunal did take into consideration irrelevant evidence on the record of the case and that the Tribunal did know the relevant evidence as alleged. Under the aforesaid circumstances, it is difficult for us to come the conclusion that question No. (1) as formulated by the Tribunal is a question of law.

(3.) IN G. Venkataswami Naidu and Co. v. Commissioner of INcome-tax [1959] 35 ITR 594 (SC) the Supreme Court has observed as follows : " If, however, such a finding of fact is based on an inference drawn from primary evidentiary facts proved in the case, its correctness or validity is open to challenge in reference proceedings within narrow limits. The assessee or the revenue can contend that the inference has been drawn on considering inadmissible evidence or after excluding admissible and relevant evidence; and, if the High Court is satisfied that the inference is the result of improper admission or exclusion of evidence, it would be justified in examining the correctness of the conclusion. It may also be open to the party to challenge a conclusion of fact drawn by the Tribunal on the ground that it is not supported by any legal evidence; or that the impugned conclusion drawn from the relevant facts is not rationally possible; and if such a plea is established, the court may consider whether the conclusion is not perverse and should not, therefore, be set aside. It is within these narrow limits that the conclusions of fact recorded by the Tribunal can be challenged. . . . . . . . . . . . Such conclusions can never be challenged on the ground that they are based on misappreciation of evidence. A conclusion reached by the Tribunal on the ground that it is a conclusion on a question of mixed law and fact, is no doubt based upon that primary evidentiary facts, but its ultimate form is determined by the application of relevant legal principles. The need to apply the relevant legal principles tends to confer upon the final conclusion its character of a legal conclusion. IN dealing with findings on questions of mixed law and fact the High Court would no doubt have to accept the findings of the Tribunal on the primary questions of fact; but it is open to the High Court to examine whether the Tribunal had applied the relevant legal principles correctly or not; and in that sense, the scope of enquiry and the extent of the jurisdiction of the High Court in dealing with such points is the same as in dealing with pure points of law. "