Deduction for payment linked to legal infraction requires first examining the governing statutory levy before deciding the issue.

Entitlement to deduction depended on whether the payment was made for infraction of law, so the Tribunal had to first identify and consider the exact statutory provision governing the levy. Because that provision was not examined, the Tribunal's discussion and conclusion were unsupported by material and the reference questions could not be properly answered on the existing record. The High Court declined to answer the referred questions and directed the Tribunal to restore the appeal and decide the limited issue afresh in accordance with law.

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Issues: Whether the reference questions could be answered without the Tribunal first identifying and considering the relevant statutory provision governing the levy of interest, and whether the matter should be sent back for fresh adjudication.

Analysis: The Tribunal had proceeded without adverting to the exact regulatory provision under which the amount was levied and paid. The Court found that the discussion and conclusion reached by the Tribunal were not supported by material and that the question whether the payment was made for infraction of law depended upon interpretation of the relevant statutory provision. Since that provision had not been considered, the issue could not be properly answered on the existing record.

Conclusion: The Court declined to answer the referred questions and directed the Tribunal to restore the appeal and decide the limited issue afresh in accordance with law.

Ratio Decidendi: Where the entitlement to deduction depends on whether a payment was made for infraction of law, the adjudicating authority must first consider the exact statutory provision under which the amount was levied; a finding made without doing so cannot be sustained and the matter may be remitted for fresh decision.

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