Findings of fact in tax reference proceedings do not create a referable question of law

Under reference jurisdiction, a Tribunal's determination based on detailed appraisal of evidence and basic facts is a finding of fact, not a question of law. The High Court held that the Tribunal's conclusions on the nature of the transactions, freight charges, and supporting export documents were factual in character. As the inference that the transactions were stock transfers depended on factual evaluation rather than any legal principle, no referable question of law arose. The applications for reference were therefore not entertainable and were dismissed.

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Issues: Whether, in applications under section 24(2) of the Orissa Sales Tax Act, 1947, the Tribunal's decision gave rise to any referable question of law, or whether the conclusions recorded were essentially findings of fact not open to interference.

Analysis: The scope of reference under section 24(2) was treated as co-extensive with section 24(1) and confined to a question of law arising out of the Tribunal's order. The Tribunal had examined the materials in detail and reached conclusions on the nature of the transactions, freight charges, and production of declaration and export documents. The High Court held that these conclusions rested on appraisal of evidence and ascertainment of basic facts. Where the final determination depends on factual inference and no legal principle is involved, the resulting conclusion remains one of fact. On that premise, the Tribunal's view that the transactions were stock transfers and that no referable question of law arose was accepted.

Conclusion: No question of law arose from the Tribunal's order. The applications for reference were not entertainable and were dismissed.

Ratio Decidendi: Under the reference jurisdiction, an inference founded on detailed appraisal of basic facts is a finding of fact, and where the Tribunal's determination is essentially factual, no question of law arises for reference.

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