Referable question of law on penalty for alleged tax evasion under sales tax law, with Tribunal directed to state the case.

A penalty under section 14B of the Punjab General Sales Tax Act, 1948 was treated as raising a debatable question of law where the revenue had not recorded any finding that the dealer was obliged to pay sales tax. On that footing, the alleged attempt to evade tax remained a referable legal issue, and the Tribunal was required to state the case on both questions of law together with the statement of facts and relevant orders. The Court directed reference of the questions, including whether the ingredients for penalty were made out on the facts found.

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Issues: Whether the Tribunal was bound to refer the two questions of law arising from the penalty order, including whether there was an attempt to evade tax so as to attract penalty under section 14B of the Punjab General Sales Tax Act, 1948.

Analysis: The facts were found to be clear, and no finding had been recorded by the revenue authorities that the dealer was under an obligation to pay sales tax. In that situation, the existence of an alleged attempt to evade tax remained a debatable legal question. The Court held that the two questions pressed before it did arise for determination and ought to be referred by the Tribunal along with the statement of facts and copies of the relevant orders.

Conclusion: The petition succeeded, and the Tribunal was directed to state the case and refer the two questions of law to the Court.

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