Commissioner of Income Tax vs Potben Joseph and Sons

M.S. Menon, J.—These are references by the Commissioner of Income Tax, My sore, Travancore-Cochin and Coorg, Bangalore, under Sub-section (3) of Section 50 of the Travancore Income Tax Act VIII of 1096. Mr. K. K. Mathew appearing on behalf of the Assessee at whoso instance '' tin''s Court required the retrenches to be made submits before us that his client is not interested in our answering the questions referred.

Sub-section (5) of S. 50 of the Travancore Income Tax Act VIII of, 1096 (like Sub-section (5) of Section 60 of the Indian Income Tax Act, 1922) provides that:

the High Court, upon the hearing of any such case, shall decide the question of law raised thereby, and shall deliver its judgment thereon containing the grounds on which such decision is founded.

In M.M. Isphani Ltd. Vs. Commr. of Excess Profits Tax, West Bengal, the Calcutta High Court has decided that "when the party who had caused a reference to be made, chooses not to appear at the hearing'''' the Court "is not bound to answer the question and should not do so.

The position must be the same when the party does enter an appearance but only to submit that he is not interested in the reference being answered.

In the decision above mentioned Chakravarti, C. J., dealt with the wording of S. 66 (5) of the Indian Income Tax Act 1922, as follows:

It will be noticed that the section is expressed, in mandatory language and deploys the word ''''shall'''' throughout its many clauses. Prima facie therefore, it would seem that upon a reference being received, it becomes an obligation of the High Court to answer the question retired and take the lordlier steps1 mentioned in the section and it becomes equally tire obligation of the Appellate Tribunal to adjust its order, if necessary, teethe opinion which the High Court may express from the question concerned it seems to now, however, in spite of the apparently mandatory languages of the Sub-section that its true import to require the High Court lo answer the questions referred to it in all circumstances, irrespective whether the parties appear before it or not. To follow an extreme case, suppose instead of only the party who had caused the reference to be made being absent of the parties fail to appear would the Court still be bound to deal with tire reference and answer the question referred. I cannot imagine that the section purports to impose upon the Court any such obligation. It seems to me that before the duty contemplated by the section to decide the questions of law referred can arise, a hearing of the case must lake place because the section opens with the words:

The High Court upon the hearing of any such case etc. Where the party, who has caused the reference to be made and who is in the position of a Plaintiff, fails to appear, no hearing of the case can take place and in my view since the preliminary condition of the Sub-section is not satisfied in such a case, the consequent obligation of deciding the question of law and delivering a judgment does not also arise.

and said:

It appears to me therefore that it is not required of us that we should answer the question referred to us in this reference at all, since the Assessee are not appearing before us. We, therefore, decline to answer the question.

As we are in respectful agreement with the view adopted in (1955) M.M. Isphani Ltd. Vs. Commr. of Excess Profits Tax, West Bengal, we would also decline to answer the questions referred in these two cases and direct that a copy of this judgment be forwarded to the Chief Revenue Authority,

Mr. G. Rama Iyer, counsel for the Department, submitted before us that the Department also is not interested in the questions being answered as they arise under a Travancore Income Tax Act which is no longer in force as they are not likely to come up for discussion in the future

We make no order as to costs.