Reference on branch-to-head office transfers turned on a legal question whether the transaction could amount to inter-State sales.

The Tribunal's refusal to refer the question was held to be unlawful because the character of a transaction on admitted facts can itself raise a question of law. The issue was whether goods transferred from a branch office to a head office could constitute inter-State sales within section 3(a) of the Central Sales Tax Act. Since that legal question required determination by the High Court, the Tribunal could not decline reference on the footing that no substantial issue arose. The Tribunal was directed to draw up a statement of the case and refer the proposed question of law.

---

---

Issues: Whether the Sales Tax Tribunal was justified in refusing to refer to the High Court the question whether goods transferred from the branch office to the head office could be treated as inter-State sales within the meaning of section 3(a) of the Central Sales Tax Act.

Analysis: The petition sought a mandamus directing the Tribunal to draw up a statement of the case and refer the proposed question of law. The Court held that the character of a transaction on admitted facts can itself raise a question of law, and that the Tribunal had erred in declining reference on the ground that no substantial legal issue arose. Reliance was placed on earlier authority supporting the view that such a question required determination by the High Court.

Conclusion: The refusal to make a reference was held to be illegal, and the Tribunal was directed to refer the question to the High Court.

---