Continuing force of a set-off rule after amendment of the parent Act required reference on a substantial question of law.

Amendment of the principal sales tax Act left a serious doubt about the continued statutory basis of a set-off rule that remained on the rule book. The court treated the dispute as raising a substantial question of law because it concerned whether the dealer could still claim set-off under the surviving rule and, if not, the correct tax rate. On that basis, refusal to state a case and make a reference was unjustified, and the statutory authority was directed to refer the question to the High Court.

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Issues: Whether the refusal of the statutory authority to state a case and refer the question of law was justified where the continued operation of the set-off rule after amendment of the principal Act was in dispute.

Analysis: The application was made under the reference provision of the sales tax enactment. The Court noted that the assessment period fell within the regime in which turnover tax had been introduced, later amended, and ultimately redesignated as surcharge. It further noticed that the rule granting set-off remained on the rule book even after the amendment to the Act removed the statutory basis for such set-off. In that situation, whether the dealer could still claim set-off under the surviving rule, and if not, what the correct tax rate would be, raised a serious question of law fit for reference.

Conclusion: The refusal to refer was unjustified, and the statutory authority was directed to state the case and make a reference.

Final Conclusion: The proceeding was allowed because a substantial question concerning the continuing force of the set-off rule after amendment of the principal Act required reference to the High Court.

Ratio Decidendi: Where amendment of the parent Act raises a serious legal doubt about the continued statutory support of a subordinate rule, the existence of a substantial question of law requires the matter to be referred under the reference provision.

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