Reference procedure: a Section 66 referral is improper where the Commissioner's section 33 refusal leaves the assessee's position unchanged.

A reference to the High Court under section 66 is not maintainable where the Commissioner, exercising review powers under section 33, refuses review and thereby leaves the assessee's position unchanged from the Assistant Commissioner's order; the proviso to section 66(2) confines references to questions of law arising out of the section 33 order itself and excludes questions that arise only from prior revived orders. Where the legal question is common to both the Assistant Commissioner's order and the Commissioner's refusal under section 33, a reference under section 66 is improper unless the question arises exclusively from the section 33 order or is referable from the Assistant Commissioner's decision.

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Issues: Whether a reference to the High Court under section 66 is maintainable where the Commissioner, acting under section 33, refuses review of an Assistant Commissioner's order and the question of law sought to be referred is common to both the Assistant Commissioner's order and the Commissioner's order.

Analysis: The statutory scheme contemplates appeals to an Assistant Commissioner after assessment and review powers exercisable by the Commissioner under section 33, together with a limited right of reference to the High Court under section 66 where an order under section 33 enhances assessment or is otherwise prejudicial. The proviso to section 66(2) restricts references to questions of law arising out of the section 33 order itself and excludes questions of law that arise only from prior orders under sections 31 or 32 revived by the section 33 order. Where the Commissioner refuses review under section 33 leaving the assessee's position unchanged from the Assistant Commissioner's order, the assessee is not prejudiced for the purposes of section 66. Further, if the question of law decided is common to both the Assistant Commissioner's earlier order and the Commissioner's order, a reference under section 66 is not appropriate unless the question is one arising exclusively from the section 33 order or is properly the subject of a reference from the Assistant Commissioner's decision.

Conclusion: Application for a reference under section 66 is not maintainable in the circumstances where the Commissioner's section 33 refusal of review leaves the assessee's position unchanged and the question of law is common to the Assistant Commissioner's order; therefore the application to call upon the Commissioner to state a case is dismissed and costs fixed at Rs. 50.

Ratio Decidendi: A question of law that is common to both an Assistant Commissioner's order and a Commissioner's order under section 33 is not a proper subject of a reference under section 66 when the section 33 order does not alter the assessee's position; references under section 66 are confined to questions of law arising out of the section 33 order itself.

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