1956 (4) TMI 31 - HC - VAT and Sales Tax

Summary

Issues:
1. Competency of the reference made by the Board of Revenue under section 25 of the Bihar Sales Tax Act, 1947.
2. Jurisdiction of the High Court to entertain the reference and answer the questions of law raised.

Analysis:
1. The case involved a reference under section 25 of the Bihar Sales Tax Act, 1947, regarding the assessment of sales tax on a company for the year 1948-49. The State of Bihar sought a reference to the High Court on two questions of law related to deductions under the Act. The Board of Revenue initially rejected the reference application, leading to subsequent applications to the High Court. The High Court ordered the Board to state a case and make a reference on the questions of law, which were raised by the State of Bihar. However, a preliminary objection was raised by the company regarding the competency of the reference made by the Board of Revenue.

2. The High Court examined the procedural aspects of the reference under section 25. The Court emphasized the importance of strict compliance with the statutory provisions governing references to the High Court. It was argued that only the dealer or the Commissioner of Sales Tax could apply under section 25(1) and subsequently under section 25(2) in case of refusal by the Board of Revenue. The Court held that the High Court's jurisdiction to entertain a reference is contingent upon the strict compliance with the conditions and qualifications set forth in the statute. Citing relevant case law, the Court reiterated that the essential conditions prescribed by the statute must be adhered to for the High Court to acquire special jurisdiction in calling for a reference.

3. The Court further discussed the timing of the application made under section 25(2)(b) and the lack of notice given to the company at the time of admission. The Court distinguished the present case from a precedent involving the Income-tax Act, highlighting the procedural differences. It was concluded that the High Court lacked jurisdiction to hear the reference or answer the questions of law raised in the reference due to the procedural irregularities in the application process. The Court held that the reference made by the Board of Revenue was not competent, and thus, the High Court had no authority to proceed with the reference. Consequently, the Court decided not to answer the reference questions and made no order as to the costs of the hearing.

4. In summary, the judgment focused on the procedural compliance required for references under the Bihar Sales Tax Act, emphasizing the strict adherence to statutory provisions for the High Court to acquire jurisdiction in entertaining a reference. The Court's decision highlighted the importance of procedural regularity in invoking the special jurisdiction of the High Court for references under the Act.