Statutory interpretation and export turnover reference: Tribunal had to refer the undecided legal question to the High Court.

Interpretation of clause (aa) of the Explanation to section 80HHC of the Income-tax Act, 1961 was treated as a question of law, not fact, where the issue was whether local sales to foreign tourists could qualify as export turnover for deduction purposes. Because the Tribunal's order raised an undecided legal question and no factual controversy was involved, the Tribunal was required to make a reference to the High Court. The application was therefore allowed and the Tribunal was directed to state the case and refer the question of law for opinion.

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Issues: Whether the Tribunal was bound to refer the question of law arising from the interpretation of clause (aa) of the Explanation to section 80HHC of the Income-tax Act, 1961, concerning whether local sales to foreign tourists could be treated as export turnover for deduction under section 80HHC.

Analysis: The dispute involved no question of fact. It turned on the interpretation of clause (aa) of the Explanation to section 80HHC of the Income-tax Act, 1961, and on the legal character of sales made in India to foreign tourists for the purpose of export turnover. Interpretation of a statutory provision is a question of law. Where a question of law arises from the Tribunal's order and has not been decided by the apex court, the Tribunal is required to make a reference.

Conclusion: The Tribunal was required to refer the question to the High Court.

Final Conclusion: The application was allowed and the Tribunal was directed to state the case and refer the question of law for opinion.

Ratio Decidendi: Interpretation of a statutory provision giving rise to an undecided question of law must be referred under the reference jurisdiction when no factual controversy is involved.

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