Commissioner Of Income Tax vs Maharishi Ved Vigyan Vishwa Vidya ...
1997 Latest Caselaw 954 Del

JUDGMENT

R. C. LAHO T1, J.

An application under sub-s. (1) of s. 256 of the IT Act, 1961, filed by the Revenue having been rejected by the Tribunal, the present application under sub-s. (2) thereof has been filed before the High Court. On the last date of hearing, we posed a question to both learned counsel for the parties: if there be no dispute on the facts and this Court forms an opinion that the question of law proposed by a party does arise as a question of law arising from the order of the Tribunal, is it necessary for this Court to perform the ritual of calling for the statement of the case and then answering the question? Cannot this Court straightaway answer the question and thereby avoid the time consuming process of performing its statutory obligation in two steps, while everybody is agreeable that the same result is capable of being achieved in one step only?

Both learned counsel have addressed us on the question.

2. Sec. 256 of the Act reads as under:

"256. Statement of case to the High Court.-(1) The assessee or the CIT may, within sixty days of the date upon which he is served with notice of an order under s. 254, by application in the prescribed form, accompanied where the application is made by the assessee by a fee of two hundred rupees require the Tribunal to refer to the High Court any question of law arising out of such order and, subject to the other provisions contained in this section, the Tribunal shall, within one hundred and twenty days of the receipt of such app)ication, draw up a statement of the case and refer it to the High Court:

Provided that the Tribunal may, if it Js satisfied that the applicant was prevented by sufficient cause from presenting the application within the period hereinbefore specified, allow it to be presented within a further period not exceeding thirty days.

(2) If, on an application made under sub-s. (1), the Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the CIT, as the case may be, may, within six months from the date on which he is served with notice of such refusal, apply to the High Court, and the High Court may, if it is not satisfied with the correctness of the decision of the Tribunal, require the Tribunal to state the case and to refer it, and on receipt of any such requisition, the Tribunal shall state the case and refer it accordingly.

(3) Where in the exercise of its powers under sub-s. (2), the Tribunal refuses to state a case which it has been required by the assessee to state, the assessee may, within thirty days from the date on which he receives notice of such refusal, withdraw his application, and, if he does so, the fee paid shall be refunded".

3. The jurisdiction conferred on the High Court is an extraordinary advisory jurisdiction. It is neither an original jurisdiction nor an appellate one. The scope of hearing is confined to the aspects of law and law only. The question having been answered, s. 260 of the Act obliges the Tribunal to give effect to the advice tendered by the High Court by passing such orders as are necessary to dispose of the case conformably with the opinion of the High Court as expressed in its judgment. The object is clear. So far as the facts are concerned, the word of the Tribunal is final. The High Court does not enter into the facts nor does it have jurisdiction to investigate the facts. If need be, such as where the statement of case made by the Tribunal is found to be deficient, the High Court may call for a ; n additional statement of facts or may even direct the Tribunal to hold an inquiry and collect such additional information as may be required to provide foundation for answering the question posed before the High Court. It cannot be lost sight of that no question can be referred to the High Court unless it arises out of the order of the Tribunal [see CIT vs. Scindia Steam Na0gation Co. Ltd. (1961) 42 ITR 589 (SQ) ]. The statement of case obviously must be founded on the facts as found or on the findings as upheld by the Tribunal. The statement of case cannot travel beyond what has already been found by the Tribunal. Under sub-s. (1) of s. 256 above said any question of law referred to the High Court has to be one arising out of an order of the Tribunal under s. 254 of the Act. The Tribunal may reject the application under sub-s. (1) of s. 256, if it holds: (i) that the question sought to be referred is not a question of law, or (ii) that the question of law does not arise out of the order of the Tribunal . The latter situation would be one where the facts found by the Tribunal do not provide a foundation for such question of law being raised. Feeling aggrieved by the rejection under sub-s. (1), the aggrieved party may approach the High Court under sub-s. (2). The High Court may direct the Tribunal to draw up a statement of the case and refer the question to it if it is not satisfied with the correctness of the decision of the Tribunal under sub-s. (1). Obviously, it would be a case where the High Court would feel satisfied that the question of law does arise out of such order of the Tribunal as is referable to s. 254.

4. That being the position of law, two situations may emerge before the High Court allowing the application under sub-s. (2) and issuing a mandamus to the Tribunal: (i) the High Court may find that the question sought to be referred is a question of law though not held to be so by the Tribunal; (ii) the High Court may find that the question arises from the order of the Tribunal though in the opinion of the Tribunal it did not so arise. While issuing mandamus to the Tribunal, the High Court, having scrutinised the order of the Tribunal, may feel that a comprehensive statement of facts is required so that the question of law may be effectively answered. Then there is no difficulty in directing the Tribunal to draw up a statement of case. Rather that shall have to be done. However, it is not difficult to comprehend cases where the question of law is a pure question of law and the facts found by the Tribunal are such as are either not disputed or need hardly any restatement over and above what is already contained in the order of the Tribunal- In such a case should the High Court necessarily perform the ritual of first directing the Tribunal to state the case which would be an exercise in futility, as the Tribunal would do nothing beyond what it has already done and on receipt of the statement of case, the High Court would answer the question which it could have very easily and comfortably done even at the earlier stage. The only difference would be that, in between, a good number of years would have been wasted and a good number of assessment cases raising a similar issue would go on piling up awaiting the decision of the High Court on the question of law lying under reference. All this would mean needless wastage of public time, money and energy. Such unnecessary and cumbersome part of the procedure can be dispensed with by treating it as directory merely.

5. In our opinion, when the facts are not disputed or the facts as found by the Tribunal and contained in its appellate order are enough to enable the question of law arising therefrom being appreciated and answered by the High Court, the High Court, instead of issuing a mandamus to the Tribunal and directing a statement of case to be drawn up and sent to the High Court, may straightaway proceed to answer the question.

6. Two Division Bench decisions of the High Court of Orissa have been brought to our notice. In Maharana & Maharana vs. State of Orissa (1991) 82 STC 242 (On), dealing with a pari material provision contained in the Orissa ST Act, 1947, their Lordships held :

"Where the meaning is clear and requires no further facts than are available in the order under examination, no statement need be called for to consider whether the refusal was justified since it can be disposed of finally without calling for a statement of the case. When we accept the view taken by the Tribunal as correct, the question as posed by the petitioner requires no statement of the case to be called for and the Tribunal is justified in refusing the application. Unless this view is taken, there would be unnecessary delay in bringing finality to a dispute, which is against public policy. The entire exercise would be of academic interest only".

In State of Orissa vs. Mahabir Prasad Agrawalla (1990) 79 STC 163 (Ori), the Division Bench has held :

"In a given case where this Court is satisfied that no useful purpose would be served except complying with the requirement of the provision of statute and the parties would not be prejudiced if no statement of case is called for and the facts available in the orders of the taxing authorities are sufficient to answer the question of law arising out of the order, this Court can treat the facts as found to be the statement of case referred to, examine the question of law arising out of those facts and answer the same for further orders of the Tribunal under s. 24(5) of the Act."

There is a decision to the contrary rendered by a Division Bench of the Kerala High Court in CIT vs. Wandoor Jupiter Chits (P) Ltd. (in Liquidation) (1995) 123 CTR (Ker) 110 : (1995) 213 ITR 73 (Ker). Their Lordships have termed the procedure presently prescribed by sub-s. (2) of s. 256 as an archaic procedure but, being bound by the phraseology of the provision, have felt helpless in making a departure from such procedure.

7. We do not agree with the learned judges of the Kerala High Court holding themselves to be so much bound by the procedural aspect of s. 266(2). In our opinion, the administration of justice has to keep pace with the march of the times. The nature of procedure prescribed by a statute-whether it is mandatory or directly merely-has to be judged by reference to the purpose sought to be achieved. We are very clear in our mind that when the facts of the case are either not disputed or cannot be disputed and as contained in the order of the Tribunal would be enough to enable the High Court to answer the question of law posed before it, it is not necessary for the High Court to call for a statement of case as, in our opinion, that would be an exercise in futility. The High Court can straightaway proceed to answer the question.

8. In the case at hand, both learned counsel for the parties have very fairly stated that no further statement of case than what is contained in the appellate order of the Tribunal is called for. The only question to be decided is whether the question of law arises from the order of the Tribunal, and if so, then which way it is to be answered. That can very well be done without calling for a statement of case. For the foregoing reasons, this application under s. 256(2) is set down for final hearing.

OPEN