Appellate findings based on conjecture and inadequate reasons can raise a question of law and justify interference.

An appellate tribunal must dispose of a second appeal on merits under Rule 60(2) by addressing the material facts, the rival case and giving cogent reasons for reversing the first appellate order. Where the tribunal relies on conjectures, surmises, irrelevant material or inadequate reasons, its factual finding is no longer immune from legal scrutiny. On that basis, the court held that a question of law arose, the tribunal's order could not stand, and the matter had to be reheard and decided afresh in accordance with law.

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Issues: (i) Whether the second appeal before the Sales Tax Tribunal was disposed of on merits in compliance with Rule 60(2) of the Orissa Sales Tax Rules, 1947. (ii) Whether the Tribunal's order, resting on conjectures, surmises and inadequate reasons, gave rise to a question of law warranting interference.

Issue (i): Whether the second appeal before the Sales Tax Tribunal was disposed of on merits in compliance with Rule 60(2) of the Orissa Sales Tax Rules, 1947.

Analysis: Rule 60(2) empowers the Tribunal to decide an appeal on merits despite the non-appearance of a party, and the Tribunal, as the final fact-finding authority, is expected to address the material facts and the rival case before reaching a conclusion. A reversal of the first appellate order requires cogent reasons showing why the earlier view is being rejected.

Conclusion: The Tribunal did not dispose of the appeal on merits in the manner required by law.

Issue (ii): Whether the Tribunal's order, resting on conjectures, surmises and inadequate reasons, gave rise to a question of law warranting interference.

Analysis: A finding of fact ceases to be immune from scrutiny where it is based on irrelevant material, improper rejection of relevant evidence, or conjectures and suspicions. Since the Tribunal's order lacked a discussion of the dealer's stand and was founded on unsupported inferences, a question of law arose.

Conclusion: A question of law did arise, and the Tribunal's order could not stand.

Final Conclusion: The reference was answered in favour of the dealer, and the matter was required to be reheard and decided afresh by the Tribunal in accordance with law.

Ratio Decidendi: An appellate finding, even on facts, is liable to be set aside where it is based on conjectures, surmises or irrelevant considerations, and an appellate reversal must be supported by cogent reasons reflecting consideration of the rival case on merits.

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