Deferred tax liability and wide revisional powers: turnover threshold timing controlled assessment, while factual review remained discretionary.

Tax liability under the relevant turnover provision did not arise for the period up to 30 June 1945 because liability under the governing sub-section commenced only three months after the start of the year following the year in which turnover first crossed the statutory limit; "year" was treated as the financial year. The revisional power was wide enough to extend to questions of fact, but the refusal to interfere was upheld because it was exercised judicially on the basis of concurrent findings and the assessee's failure to maintain books and produce accounts. The reference was answered partly for the assessee and partly against it.

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Issues: (i) Whether, on the finding that the assessee had no taxable business up to 31 March 1945, the assessment for the period up to 30 June 1945 was legal. (ii) Whether the Board's refusal, in revision, to go into questions of fact was legal.

Issue (i): Whether, on the finding that the assessee had no taxable business up to 31 March 1945, the assessment for the period up to 30 June 1945 was legal.

Analysis: Liability under Section 4(1) did not apply. The governing provision was Section 4(2), under which a dealer not covered by sub-section (1) becomes liable only from three months after the commencement of the year immediately following the year in which the gross turnover first exceeded the statutory limit. Since "year" means financial year under Section 2(j), the statutory date for liability had not yet arrived for the period in question.

Conclusion: The assessment up to 30 June 1945 was not legal and this issue was decided in favour of the assessee.

Issue (ii): Whether the Board's refusal, in revision, to go into questions of fact was legal.

Analysis: The revisional power under Section 20(3) was expressed in wide terms and was not expressly confined to questions of law. It could extend to questions of fact, but the power was discretionary and had to be exercised judicially. On the facts, the Board declined to interfere because of the concurrent findings below and the assessee's failure to maintain books and produce accounts.

Conclusion: The refusal to enter into questions of fact was held to be legal and this issue was decided against the assessee.

Final Conclusion: The reference was answered partly in favour of the assessee and partly against the assessee, with refund directed to the extent flowing from the first issue.

Ratio Decidendi: Where a taxing statute postpones liability by reference to the year in which turnover first exceeded the threshold, the commencement date must be fixed strictly under the statute; and a revisional authority with wide statutory power may examine questions of fact, but its decision not to do so will be upheld if exercised judicially on relevant circumstances.

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