Fairly arguable questions of law must be referred by the Tribunal when prior conclusion is not clearly established.

Where a proposed reference from the Appellate Tribunal raises fairly arguable questions of law, the High Court should direct the Tribunal to state the case and refer those questions instead of refusing reference on the footing that they are already concluded. The Court declined to express any view on the merits of the underlying income-tax issues at that stage, but held that the proposed questions were not shown to be finally concluded in a manner justifying refusal. The refusal to require a reference was therefore held unjustified, and the assessee's objection failed.

---

---

Issues: Whether the High Court was justified in refusing to direct the Appellate Tribunal to state a case and refer the questions of law arising from the Tribunal's order.

Analysis: The controversy turned on whether the questions proposed by the revenue were already concluded or whether they still raised fairly arguable questions of law. The Court held that it would not express any opinion on the merits of the underlying income-tax questions at that stage. It found that the proposed questions were not shown to be finally concluded in a manner that would justify refusal of reference, and that the High Court ought to have required the Tribunal to state the case and make the reference.

Conclusion: The refusal to direct a reference was not justified, and the assessee's objection failed.

Ratio Decidendi: Where a proposed reference raises fairly arguable questions of law, the High Court should direct the Tribunal to state the case and refer those questions instead of declining reference on the footing that they are already concluded.

---