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Issues:
1. Determination of whether the income of the applicant was assessable to excess profits tax as business income or income from exercising a profession. 2. Inclusion of money advanced by the Government to the applicant in the average capital for excess profits tax assessment. Analysis: Issue 1: The primary contention in the case revolved around whether the income of the applicant, a joint stock company, should be considered as business income subject to excess profits tax or income from the exercise of a profession as per the Excess Profits Tax Act. The applicant argued that their activities as a purchasing agent for the Government did not constitute a business but rather a profession. However, the Tribunal found that the applicant, despite acting as a purchasing agent, continued its other business activities, indicating a business operation. The Tribunal concluded that the applicant was carrying on business as defined by the Act, leading to the question of whether the income from commission on rice purchases was subject to excess profits tax. The Court was tasked with deciding this question based on the facts presented. Issue 2: The second contention raised related to the inclusion of money advanced by the Government to the applicant in the average capital calculation for excess profits tax assessment. This issue was not allowed to be argued before the Appellate Tribunal as it was not raised earlier. The applicant claimed that this point was included in the grounds of appeal before the Appellate Assistant Commissioner, but it was not argued or addressed in the Commissioner's order. The Tribunal did not permit this point to be raised during the proceedings under section 33. Consequently, this question could not be referred to the High Court as it did not arise out of the Tribunal's order. The judgment highlighted a procedural aspect concerning the obligation of the High Court to answer questions of law referred to it under the Excess Profits Tax Act and the Income-tax Act. The Court noted that the absence of the party who initiated the reference could impact the Court's decision-making process. Despite the mandatory language in the relevant section, the Court concluded that a hearing must take place for the duty to decide questions of law to arise. In this case, since the assessees did not attend the hearing after causing the reference, the Court determined that it was not obliged to answer the question referred. Consequently, the Court declined to answer the question, considering the absence of the assessees. The Commissioner of Excess Profits Tax was awarded costs for the reference. In summary, the judgment addressed the substantive issues of determining the nature of the applicant's income for excess profits tax assessment and the inclusion of advanced money in capital calculation. Additionally, it delved into the procedural aspect of the Court's obligation to answer questions of law in the absence of the party who initiated the reference, ultimately leading to the Court declining to answer the question due to the non-appearance of the assessees.
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