Industrial-company status turns on factual character of air-conditioning activity, not a pure question of law.

Industrial-company status for an assessee supplying cool, filtered and chilled air through air-conditioning equipment depended on the character of its activity under the relevant Finance Acts. The Tribunal had treated the activity as manufacture or processing of goods and granted the lower tax rate, but the Supreme Court agreed that the real question was whether the factual nature of the activity satisfied the statutory description. The issue was therefore one of fact rather than a pure question of law, so no reference was warranted and the appeals were dismissed.

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Issues: Whether the assessee, by supplying cool, filtered and chilled air through air-conditioning apparatus to lessees, was an industrial company within the meaning of the relevant Finance Acts and whether that question was one of law or one of fact.

Analysis: The assessee's claim to industrial-company status depended on the character of its activity for the relevant assessment years under section 2(6)(d) of the Finance Act, 1968 and section 2(6)(c) of the Finance Acts, 1969 and 1970. The Tribunal had held that the activity amounted to manufacture or processing of goods and that the assessee was therefore entitled to the lower rate of tax. The High Court refused reference on the footing that the issue was factual. The Court agreed that the determination turned on appreciation of the factual nature of the assessee's activity rather than on a pure question of law.

Conclusion: The question was one of fact, and no reference was warranted. The appeals were dismissed.

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