Factual appreciation and lower-of-cost-or-market stock valuation defeated reference on commission and closing stock issues.

Allowance of sole selling agency commission depended on the Tribunal's factual appreciation, so no independent question of law arose and the issue was not fit for reference. Closing stock was to be carried forward at cost or market price, whichever was lower; because the post-year-end levy sugar price was lower from 1 July 1972, valuation at the lower rate correctly reflected realizable value. The Tribunal's view on stock valuation was therefore upheld, and no referable question of law arose on either issue.

---

---

Issues: (i) whether the sole selling agency commission was allowable as an expense and gave rise to a referable question of law; (ii) whether the closing stock was undervalued by adopting the rate prevailing after the change in levy sugar price.

Issue (i): whether the sole selling agency commission was allowable as an expense and gave rise to a referable question of law.

Analysis: The allowance of the commission depended on the factual appreciation adopted by the Tribunal. The Tribunal had treated the commission as allowable on the footing that it had been allowed in earlier years, and no independent question of law arose from that conclusion.

Conclusion: The issue was one of fact and no referable question of law arose; it was not fit for reference.

Issue (ii): whether the closing stock was undervalued by adopting the rate prevailing after the change in levy sugar price.

Analysis: The closing stock was required to be carried forward as the opening stock of the next year, and valuation at cost or market price, whichever was lower, was applied. Since the effective rate from 1 July 1972 was lower than the rate on 30 June 1972, the lower rate correctly reflected the realizable value of the stock after the year-end.

Conclusion: The Tribunal correctly upheld valuation of the closing stock at Rs. 135.55 per quintal, and no referable question of law arose on this issue either.

Final Conclusion: The application for reference was dismissed as neither question required reference to the court.

Ratio Decidendi: A question does not become referable where the Tribunal's conclusion rests on factual appreciation, and closing stock may be valued at the lower realizable rate where a post-year-end price change makes that rate the correct measure of value.

---