Revenue reference discretion limits mandamus where original jurisdiction is barred and good-faith immunity protects tax under the statute.
Original jurisdiction in revenue matters was held to be barred by the relevant constitutional provision, and framing the request under the Specific Relief Act did not avoid that restriction. Statutory immunity for acts done in good faith under the income tax law also extended to omissions, so proceedings against the revenue officer were prohibited absent any showing of bad faith. On the reference power, the revenue authority had discretion to refuse a reference if satisfied that the application was frivolous or that a reference was unnecessary; "unnecessary" was construed broadly as not reasonably required for disposal of the case. The Court could not substitute its own view by mandamus-like relief.
Issues: (i) Whether an order directing the Chief Revenue Authority to make a reference under the income tax law could be made under the Specific Relief Act in view of the constitutional bar on original jurisdiction in revenue matters and the statutory immunity for acts done in good faith; (ii) Whether the Chief Revenue Authority was bound to make a reference unless the application was frivolous or the reference was unnecessary, and what is the meaning of "unnecessary" in that provision.
Issue (i): Whether an order directing the Chief Revenue Authority to make a reference under the income tax law could be made under the Specific Relief Act in view of the constitutional bar on original jurisdiction in revenue matters and the statutory immunity for acts done in good faith.
Analysis: The writ-like jurisdiction under the Specific Relief Act was treated as original jurisdiction. Section 106 of the Government of India Act, 1915 barred the High Court from exercising original jurisdiction in matters concerning revenue, and that restriction was not displaced merely because the application was framed under Section 45 of the Specific Relief Act. In addition, Section 52 of the Indian Income Tax Act, 1918 prohibited proceedings against a Government officer for anything done in good faith under the Act, and the expression extended to omissions as well. As no absence of good faith was shown, the proceeding fell within the statutory prohibition.
Conclusion: The application was not maintainable against the revenue authority and was barred by the governing statutory provisions.
Issue (ii): Whether the Chief Revenue Authority was bound to make a reference unless the application was frivolous or the reference was unnecessary, and what is the meaning of "unnecessary" in that provision.
Analysis: The language of Section 51 of the Indian Income Tax Act, 1918 was construed in its ordinary sense. The requirement that the authority be "satisfied" that the application was frivolous or that a reference was unnecessary vested discretion in the revenue authority, and did not substitute the Court's view for that of the authority. The word "unnecessary" was not confined to questions already decided or not arising in assessment; it was understood more broadly as what was not reasonably required for disposal of the case. On the facts, the Commissioner had acted on the statutory language and had not misdirected himself.
Conclusion: The revenue authority was not shown to have failed in its statutory duty, and no mandamus-like order could be issued to compel a reference.
Final Conclusion: The appeal succeeded, and the application for an order compelling a reference was dismissed with costs, the High Court holding that the statutory and jurisdictional bars prevented the relief sought.
Ratio Decidendi: Where a statute entrusts a revenue authority with the discretion to refuse a reference if it is satisfied that the application is frivolous or the reference unnecessary, the Court cannot substitute its own judgment through mandamus-like relief, especially where the proceeding is barred by a provision excluding original jurisdiction in revenue matters and by a statutory immunity for acts done in good faith.
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