COMMISSIONER OF WEALTH TAX Vs. VENKATESA MILLS LIMITED

JUDGEMENT

(1.) THE short question that arises for determination in these petitions is, when can a question of law be said to arise out of the order of the Tribunal (functioning under the Wealth Tax Act of 1957) for directing it to refer the question to the High Court under S. 27(3) of the Wealth Tax Act, 1957. By its order dated 30-12-1963, the Tribunal declined to refer the following question to the High Court for decision:

(2.) IT must be mentioned at the outset that in an application for reference under S. 27 (Corresponding to S. 66 of the Income-tax Act), the High Court is not concerned with the correctness of the decision of the Appellate Tribunal on the merits of the appeal which was disposed of by the Tribunal; but the High Court is only concerned with the correctness or otherwise of the order of the Tribunal in holding that no question of law arises out of its order warranting a reference under S. 27 of the Act. IT is sufficient to refer to the statement of the law in Palkiwala's Income-tax, 5th Edn. Vol. I, at pages 906 and 907. Reference may also be made to the Bench decision of the Bombay High Court in Central Talkies Circuit v. Commr. of Income-tax, Bombay, (1939) 7 ITR 628: (AIR 1939 Bom 448) where Beaumont C. J. Delivering the judgment of the Bench held that the ultimate decision on a point of law whether for or against the Commissioner, can have no bearing on the question whether there was a point of law upon which a case should have been stated. This decision in (1939) 7 ITR 628: (AIR 1939 Bom 448) has been followed in Dhanrajmal Chatandas v. Commr. of Income-tax, Bombay Presidency, Sind and Baluchistan (1942) 10 ITR 384: (AIR 1942 Sind 74). In R. B. L. Banarsi Dass & Co. Ltd. v. Income-tax Appellate Tribunal, Delhi Bench, the Bench of the Punjab High Court has taken the same view holding that at the stage of an application for stating a case to the High Court, the court is not concerned with the merits or ultimate decision or objection, whether it would be in favour of or against the assessee, and that what is crucial to consider is whether there is a point of law upon which a case should have been stated. The learned counsel for the department contends that in an application under S. 27, at this stage, the question is not whether the decision of the Tribunal is correct and whether the High Court would therefore accept the same, but whether the question of law arises out of the order of the Tribunal.

(3.) IN this connection reference also may be made to the judgment of the Privy Council in Alcock Ashdown and Co. Ltd. v. Chief Revenue Authority, ILR 47 Bom 742: (AIR 1923 PC 138) reversing the decision of the Bombay High Court in IN the matter of Excess Profits Duty Act, ILR 45 Bom 881: (AIR 1921 Bom 119). That case arose under a corresponding provision, S. 51 of the INcome-tax Act. 1918. The provision relating to the reference to the High Court under S. 51(1) ran thus: