Limited reference jurisdiction bars stay on tax recovery when the statute gives no such power.

In a reference under the Income-tax Act, the High Court's jurisdiction is confined to answering the questions of law referred to it, and it cannot act as an appellate or revisional forum to grant recovery-stay relief. Inherent powers under section 151 CPC cannot be used to create a power that the statute does not confer, and Article 227 does not expand the limited reference jurisdiction. An order restraining tax recovery pending disposal of the reference would impermissibly enlarge the court's statutory authority and conflict with the legislative scheme, including section 265 of the Act.

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Issues: Whether the High Court, while dealing with a reference under the Income-tax Act, 1961, had inherent jurisdiction to grant a stay or temporary injunction restraining recovery of disputed tax pending disposal of the reference.

Analysis: The jurisdiction of the High Court in a reference under sections 256 to 260 of the Income-tax Act, 1961 is confined to answering the questions of law referred to it. The court does not function as an appellate or revisional court in such proceedings, and the Act contains no mechanism authorising the court to determine facts for the purpose of granting recovery-stay relief. Inherent powers under section 151 of the Code of Civil Procedure, 1908 are complementary only and cannot be used to confer a jurisdiction which the statute does not provide. Article 227 of the Constitution of India does not alter the limited character of reference jurisdiction, and any order staying recovery would amount to enlarging the court's statutory power in a manner inconsistent with the legislative scheme, including section 265 of the Income-tax Act, 1961.

Conclusion: The High Court had no inherent jurisdiction to grant the requested stay or injunction in the reference proceedings, and the issue was decided against the assessee.

Ratio Decidendi: In proceedings under a statutory reference jurisdiction confined to answering questions of law, inherent powers cannot be invoked to grant stay or injunction where the statute does not confer such power and the relief would enlarge the court's jurisdiction.

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