Interlocutory refusal to raise an exemption issue can be challenged in revision when it prejudices proper adjudication.

An interlocutory order passed during pendency of an appeal can be challenged in revision against the final order where it causes prejudice to the assessee. Here, the Tribunal had refused permission to raise an exemption question concerning purchases made in the course of inter-State trade on behalf of ex-U.P. principals. The High Court held that the assessee was entitled to have that point considered, since the refusal prevented proper adjudication of the exemption claim. The Tribunal's order was set aside to that extent and the matter was remitted for fresh consideration after allowing the assessee to raise the exemption issue.

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Issues: Whether the assessee could challenge the Tribunal's interlocutory order refusing permission to raise the question of exemption for purchases made in the course of inter-State trade on behalf of ex-U.P. principals, and whether the matter required fresh consideration by the Tribunal.

Analysis: The assessee's revision arose from a sales tax assessment where the books of account had been rejected and the dispute before the High Court concerned the Tribunal's refusal to permit the assessee to raise an exemption issue. The Court held that an interlocutory order passed during the pendency of an appeal can be challenged in revision against the final order, and that the assessee had suffered prejudice because the Tribunal did not allow the question to be raised. As the proposed issue related to exemption on purchases made in the course of inter-State trade on behalf of ex-U.P. principals, the Tribunal was required to examine it after giving the assessee an opportunity to raise the point.

Conclusion: The revision was maintainable to the extent of challenging the interlocutory refusal, and the assessee succeeded on that issue; the Tribunal's order was set aside to that extent with a direction to decide the appeal afresh after permitting the exemption question to be raised.

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