Reference record incomplete on genuineness of sales; matter sent back for supplemental factual findings before tax issue can be answered.

The Bombay High Court held that a reference could not be answered on the existing statement of case because the real controversy was whether the disputed transactions were genuine sales to the purchaser. As the record lacked the factual findings necessary to decide genuineness, the Court required the matter to be returned for a supplemental statement of case and a finding on that issue. The substantive tax deduction question was therefore left undecided until the factual position was properly supplemented.

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Issues: Whether the reference could be answered on the existing statement of case and whether the matter had to be sent back for a supplemental statement on the genuineness of the disputed sales.

Analysis: The controversy before the Court was not merely whether the cancellation of the purchaser's registration and licence operated retrospectively, but first whether the two transactions were in fact genuine sales to that purchaser. The statement of case did not contain the factual material necessary to decide that issue. In the absence of findings on the genuineness of the transactions, the reference could not be effectively answered on the record as it stood, and the case had to be returned for a fuller statement under the reference power.

Conclusion: The matter was remanded to the Tribunal for a supplemental statement of the case and a finding on the genuineness of the transactions.

Final Conclusion: The substantive tax deduction question was left undecided and the reference was sent back for fresh factual supplementation.

Ratio Decidendi: Where the existing reference record is insufficient to determine the real factual controversy, the court may require a supplemental statement so that the reference can be properly answered.

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