Service of statutory notice before registration cancellation was a factual issue, not a referable question of law.

Service of the statutory 14 days' notice before cancellation of registration was treated as a condition precedent under the Income-tax Act. The Tribunal examined the record and found no evidence that the notice had been served, and that conclusion rested on appraisal of evidence. Because the finding was factual rather than a legal interpretation issue, it did not give rise to a referable question of law under section 256(2). The Tribunal was therefore correct in declining to state the case.

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Issues: Whether the Tribunal's finding that the requisite 14 days' notice under section 186(2) of the Income-tax Act, 1961 was not served before cancellation of registration gave rise to a referable question of law under section 256(2).

Analysis: The Tribunal had examined the material on record and concluded that there was no evidence of service of the statutory notice required before cancellation of registration. The High Court held that service of notice was a condition precedent to cancellation, and the Tribunal's conclusion on non-service was based on appraisal of evidence. Such a finding was factual in nature and did not disclose any question of law for reference.

Conclusion: The Tribunal rightly declined to state the case, as no question of law arose from its factual finding regarding non-service of notice.

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