Referable question of law arises when a later Supreme Court ruling disapproves the earlier High Court basis for Tribunal relief.

Where a Tribunal relies on an earlier High Court view that has since been disapproved by a later binding Supreme Court decision, the controversy is not treated as finally settled and a referable question of law arises. The Supreme Court held that the Tribunal could not refuse reference on the footing that the issue was already concluded by the earlier view, because the later decision had undermined its basis. The Tribunal was therefore directed to draw up a statement of case and refer the question to the High Court, and the contrary order was set aside.

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Issues: Whether the Income-tax Appellate Tribunal's view that the assessee was entitled to registration despite contravention of Rules 38 and 39 of the A. P. Foreign Liquor and Indian Liquor Rules, 1970 raised a question of law requiring reference to the High Court.

Analysis: The prior High Court decision relied on by the Tribunal had already been considered by the Supreme Court and found unacceptable. In light of the later binding in Bihari Lal Jaiswal, the controversy could not be treated as closed by the earlier High Court view, and a referable question of law clearly arose for consideration by the High Court.

Conclusion: The question was required to be referred to the High Court, and the Tribunal was directed to draw up a statement of case and make the reference.

Final Conclusion: The Revenue succeeded, the contrary order was set aside, and the matter was restored to the reference stage before the High Court.

Ratio Decidendi: Where a later binding decision of the Supreme Court has disapproved the basis of an earlier High Court view, a substantial question arising from the Tribunal's order cannot be refused as already concluded and must be referred for decision.

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