Inherent power to recall an ex parte order: High Court may restore an income-tax reference for decision on merits.

Where a High Court declines to answer an income-tax reference because of a party's non-appearance and failure to file paper books, it is not functus officio if sufficient cause is later shown. In the absence of any express or implied statutory bar, the High Court has inherent power to recall its earlier order passed in the party's absence and restore the reference for hearing on merits to prevent miscarriage of justice. The assessee had acted with sufficient diligence, so the recall was proper and the matter was remitted for decision on the referred questions.

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Issues: Whether the High Court, after declining to answer the reference for non-appearance of the assessee and non-filing of paper books, became functus officio and lacked power to recall that order and rehear the reference on merits.

Analysis: The reference arose under section 66(1) of the Indian Income-tax Act, 1922. The Court held that where a party shows sufficient cause for non-appearance and for failure to comply with procedural requirements, the High Court is not helpless or bound by functus officio so as to be unable to recall its earlier order. In the absence of any express or implied prohibition in the Act, the High Court has inherent power to recall an order made in the party's absence and to direct disposal of the reference on merits, especially to prevent miscarriage of justice and to secure the ends of justice. The Court also found that the assessee had acted with sufficient diligence in approaching the High Court.

Conclusion: The High Court was not functus officio and could recall its earlier order. The appeal succeeded, and the matter was sent back for decision of the referred questions on merits.

Final Conclusion: Procedural finality cannot defeat a merits determination where sufficient cause is shown and no statutory bar prevents recall of the earlier order.

Ratio Decidendi: In the absence of an express or implied statutory prohibition, a court may exercise inherent power to recall an order passed in a party's absence and restore the matter for decision on merits where sufficient cause is shown and justice so requires.

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