Rule 56A and MODVAT credit interpretation raised a referable question of law on the scope of the amendment.

Interpretation of sub-rule (9) of Rule 56A raised a debatable question of law on whether the bar applied merely because MODVAT credit was availed for different materials, or only when the same inputs were covered by both schemes. The Tribunal treated the rival constructions as substantial and held the issue fit for reference. It also examined whether the amendment made on 15-4-1987 was clarificatory in nature and therefore capable of retrospective operation. On that basis, the specified questions were directed to be referred to the High Court.

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Issues: Whether the questions of law arising from the interpretation of sub-rule (9) of Rule 56A, and the nature of the amendment made on 15-4-1987, should be referred to the High Court.

Analysis: The dispute turned on whether the bar in sub-rule (9) of Rule 56A operated against a manufacturer merely because MODVAT credit was being availed for different materials, or only where the same inputs were covered by both schemes. The Tribunal found that the issue raised a debatable question of law, and that the rival interpretations could not be ignored. It also considered whether the subsequent amendment to sub-rule (9) was merely clarificatory and therefore capable of retrospective operation.

Conclusion: The Tribunal held that the matter involved a referable question of law and directed that the specified questions be referred to the High Court.

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