Reference jurisdiction under tax law cannot reopen evidence; High Court exceeded section 66(4) by calling for fresh material.

In reference proceedings, the High Court under section 66(4) could require only a supplementary statement based on material already on the record; it could not direct the Tribunal to collect fresh evidence. The Court preferred the settled narrow construction of the reference power, stressing that longstanding interpretations of tax provisions should not be displaced without compelling reasons. The earlier view was not reconsidered or overruled, and the High Court had exceeded the permissible scope by calling for additional material. The impugned order was set aside and the reference remitted for disposal under the settled interpretation.

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Issues: Whether the High Court, in exercising its reference jurisdiction under section 66(4), could require the Tribunal to collect and include additional evidence not already on the record, and whether the earlier decisions restricting that power required reconsideration.

Analysis: The statutory scheme of the reference provisions confines the statement of case to material already brought on the record before the taxing authorities and the Tribunal. The power under section 66(4) is to seek additions or alterations in the statement of case when it is insufficient for answering the referred question; it is not ordinarily designed to reopen the evidentiary record. At the same time, the language of section 66(4) is wide enough to support the contrary view, but the Court emphasised that earlier rulings had consistently adopted the narrower construction and had governed practice for a substantial period. The Court also stated that prior decisions should be revisited only for compelling and substantial reasons, particularly where certainty and continuity in tax law are important.

Conclusion: The earlier view was not reconsidered or overruled. The High Court had exceeded the permissible scope of section 66(4) by directing the collection of additional material, and the matter had to be dealt with in the light of the earlier decisions.

Final Conclusion: The appeal succeeded to the extent that the impugned order of the High Court was set aside and the reference was sent back for disposal according to the settled construction of the reference provisions.

Ratio Decidendi: In reference proceedings, the High Court may require a supplementary statement only from material already on the record, and earlier authoritative interpretations of a statutory provision should not be departed from absent compelling reasons.

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