Advisory jurisdiction under section 66(5) may be declined when the referring assessee is absent at hearing.

Whether a High Court must answer a reference under section 66(5) turns on the statutory requirement of a hearing and the advisory scope of the jurisdiction; where the preliminary condition "upon the hearing" is absent because the referring assessee is not present, the Court may exercise judicial discretion to refuse to answer questions of law. The principle applied treats refusal as discretionary rather than mandatory, and the Court in this matter declined to answer the reference for that reason.

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Issues: Whether under section 66(5) of the Income-tax Act the High Court is bound to answer a reference made under section 66(2) when the assessee who instituted the reference is absent at the hearing.

Analysis: The Court examined the language of section 66(5) which states that the High Court "upon the hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded" and surveyed precedents interpreting the scope of the High Court's jurisdiction under section 66 as an advisory jurisdiction limited to questions properly referred. The Court reviewed authorities holding that the High Court's duty to answer is not absolute where the matter is academic, unnecessary, or the referring party is absent, and considered decisions (including M.M. Ispahani Ltd., Tamarind Products, and others) which treat the power to refuse to answer as discretionary rather than mandatory. The Court concluded that the preliminary condition "upon the hearing" contemplates a hearing of the case and that absence of the referring party removes that condition in many circumstances; nonetheless other authorities recognise that refusal to answer is a matter of judicial discretion rather than an inflexible rule.

Conclusion: The High Court is not bound to answer a reference under section 66(5) when the assessee who caused the reference to be made is absent at the hearing and may in its discretion decline to answer; in this case the Court exercised that discretion and refrained from answering the questions. (Against the assessee)

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