High Court reference practice permits discretion to decline answering tax questions when circumstances justify refraining from an opinion.

Section 66(5) of the Income-tax Act was construed as requiring the High Court to decide referred questions of law, but not as removing its discretion to decline an answer in appropriate circumstances. The Court accepted that, where the assessee failed to appear and the case justified it, the reference need not be answered. The operative principle is that the statutory duty to decide is subject to judicial discretion when circumstances make an answer inappropriate, and the Court refrained from answering the questions.

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Issues: Whether the Court, on a reference under the Income-tax Act, was bound to answer the questions of law when the assessee failed to appear, or whether it could in its discretion refrain from answering them.

Analysis: Section 66(5) of the Income-tax Act uses mandatory language requiring the Court to decide questions of law referred to it under Section 66(1), but that language does not exclude a refusal to answer where the circumstances of the case justify such course. The power to decline to answer exists, and its exercise depends on judicial discretion rather than on an inflexible rule. The Court therefore accepted that the absence of the assessee could, in a proper case, justify refraining from answering the reference.

Conclusion: The Court held that it was not bound to answer the referred questions and, in the circumstances, refrained from answering them.

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