Statutory interpretation of "consumed" and "used" under entry tax law was treated as a referable question of law.

Interpretation of the expressions "consumed" and "used" in section 3(1)(b) of the Entry Tax Act was held to raise a question of law because that construction determined whether machinery used in a factory and spare parts used for replacement could be subjected to entry tax. The Court treated the proposed issues as legal controversies fit for reference, not merely factual disputes, and held that they could not be refused on the ground that no question of law arose. The reference application was accordingly allowed and the Tribunal was directed to state the case and refer the questions for the High Court's answer.

---

---

Issues: Whether the questions proposed by the assessee concerning levy of entry tax on machinery and spare parts, and the meaning of the words "consumption" and "use" in the Entry Tax Act, constituted questions of law requiring reference to the High Court.

Analysis: The dispute turned on the legal import of the expressions "consumed" and "used" in section 3(1)(b) of the Entry Tax Act and whether machinery used in a factory, or spare parts used for replacement, could be treated as falling within those expressions. Since the answer to that interpretative issue determined whether entry tax could be levied on such goods, the matter was not merely factual. The Court held that the proposed questions involved a legal controversy fit for reference and could not be declined on the footing that no question of law arose.

Conclusion: The questions proposed were questions of law and were required to be referred to the High Court for answer.

Final Conclusion: The application was allowed and the Tribunal was directed to state the case and refer the questions for decision by the High Court.

Ratio Decidendi: Whether the scope of statutory expressions governing taxability requires interpretation so as to determine liability is a question of law fit for reference, even where the disputed goods are machinery or spare parts used in the assessee's operations.

---