Interpretation of penalty provision under sales tax law held to raise a referable question of law

Interpretation of section 36(6) of the Haryana General Sales Tax Act, 1973 gave rise to a referable question of law because no binding Supreme Court or jurisdictional High Court precedent was shown to settle the provision's scope. The Punjab High Court held that the Tribunal was wrong to refuse reference merely because the issues were overlapping, and directed that a single comprehensive question be referred for judicial determination. The effect was to secure adjudication on the legality of the penalty issue under section 36(6), rather than leaving the statutory interpretation unresolved at the Tribunal level.

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Issues: Whether the Tribunal was right in refusing to refer the question whether penalty was validly imposed under section 36(6) despite the finding that there was no surplus stock not accounted for in the registers or accounts.

Analysis: The application sought a reference on the scope of section 36(6) of the Haryana General Sales Tax Act, 1973. The Court held that the provision raised a question of law on its interpretation, and that such a question would normally arise unless already concluded by binding precedent of the Supreme Court or the jurisdictional High Court. As no such precedent was shown on the meaning of section 36(6), and the questions framed were overlapping, the Court found that a single comprehensive question should be referred.

Conclusion: The Tribunal should refer the question of law to the Court, and the assessee's application was allowed.

Final Conclusion: The order ensured judicial determination of the legal scope of penalty under section 36(6) by directing a reference on the disputed question.

Ratio Decidendi: An unresolved interpretation of a taxing provision that is not already settled by binding precedent gives rise to a referable question of law.

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