1966 (8) TMI 23 - HC - Wealth-tax

Assessee has filed an application for being permitted to withdraw the reference saying that he is no longer interested in prosecuting the reference - High Court is not bound to answer the reference

Summary

Issues:
1. Can the assessee be permitted to withdraw the reference made under section 27 of the Wealth-tax Act, 1957?
2. Is the High Court obligated to answer a reference under section 27 if the party who caused the reference to be made does not appear at the hearing or expresses disinterest in the reference being answered?

Analysis:
1. The judgment involved a reference under section 27 of the Wealth-tax Act, 1957, by the Income-tax Appellate Tribunal, regarding the assessability of ancestral property in the hands of the sole surviving coparcener. The assessee sought to withdraw the reference, stating lack of interest in "prosecuting the reference." The court deliberated on the permissibility of allowing the withdrawal of a reference not addressed in the Act. It was concluded that since section 27 does not provide for withdrawal of a reference, the power to withdraw lies with the Tribunal, not the party causing the reference. The court noted that if the party fails to appear or expresses disinterest, the High Court may decline to answer the reference, as per sub-section (6) of section 27.

2. The judgment discussed the obligation of the High Court to answer a reference under section 27 if the party causing the reference does not participate in the hearing or expresses disinterest. Citing precedents, the court highlighted that a hearing of the case is essential before deciding the question of law raised in the reference. The judgment referred to cases where the High Court declined to answer references when the party causing the reference did not appear at the hearing. It emphasized that the High Court is not bound to answer a reference if the party does not participate or expresses disinterest, as the obligation to decide the question of law arises only after a hearing takes place.

3. The judgment cited various cases to support the view that once a reference is made by the Tribunal, the party causing the reference cannot unilaterally withdraw it. It referenced a case where the Calcutta High Court answered a reference despite the party's request to withdraw, emphasizing that the reference must be decided by the High Court unless the party fails to appear or take interest in the matter. In the present case, as the assessee and the department expressed disinterest in pursuing the reference, the court declined to answer the question referred, granting costs to the Commissioner of Wealth-tax for appearing in the proceedings.