High Court lacks power to stay tax recovery in income-tax reference proceedings; advisory jurisdiction is limited to procedural steps.

In a reference under the Indian Income-tax Act, the Supreme Court held that the High Court's jurisdiction is purely advisory and consultative, not original, appellate or revisional. Because the statute contained no express power to suspend tax recovery pending a reference, and the taxpayer's obligation to pay remained unaffected by the reference, the High Court could not invoke inherent or incidental power to grant stay or injunction against collection. Any incidental powers are limited to procedural or reference-making orders necessary to answer the reference, not substantive relief against recovery. The stay granted by the High Court was therefore erroneous.

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Issues: Whether the High Court, while hearing a reference under section 66 of the Indian Income-tax Act, 1922 or section 256 of the Income-tax Act, 1961, had jurisdiction or inherent power to grant stay of recovery of tax or injunction against collection pending disposal of the reference.

Analysis: The reference jurisdiction under both enactments was held to be purely advisory and consultative, not original, appellate, or revisional. The statutory scheme contained no express power authorising the High Court to stay recovery of tax pending a reference, and the pendency of a reference did not affect the obligation to pay tax in accordance with the assessment. While incidental or ancillary powers may exist to make the advisory jurisdiction effective, such powers were confined to matters of procedure and to orders necessary for answering the reference, such as calling for a supplementary statement or restoring a reference dismissed for default. They could not be extended to grant substantive relief in the nature of stay of recovery, which lay within the domain of the appellate authority. The view that such stay could be granted in reference proceedings was not accepted.

Conclusion: The High Court had no inherent or incidental jurisdiction to grant stay or injunction against recovery of tax in pending reference proceedings; the order granting stay was erroneous.

Ratio Decidendi: In a reference proceeding under the income-tax statutes, the High Court's advisory jurisdiction carries only such incidental powers as are necessary to make that jurisdiction effective, and it does not include the power to stay recovery of tax or grant injunction against collection.

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