P L D 1958 Supreme Court (Pak (PLP)

MUHAMMAD MUNIR, C. J.‑This order will extend to Civil Appeals Nos. 2‑D, 3‑D. 4‑D, 5‑B and 29 of 1957, which, the question of their competency having been reserved, were preferred by special leave of this Court. The appeals are by different assessees and arise out of separate orders of the High Court of Dacca declining to require the Appellate Tribunal to state a case under subsection (2) of section 66 of the Income‑tax Act, 1922, and later dismissing their applications for a certificate for leave to appeal to this Court. There is only one point which has to be determined in these appeals, and that is whether an appeal to the Supreme Court lies from an order of the High Court under subsection (2) of section 66 of the Income‑tax Act refusing an assessee' s application to direct the Appellate Tribunal to state a case. Though the appellants, when the petitions for Special Leave to Appeal were presented to this Court, were labouring under some confusion, it is now stated before us that the appeals are directed against the High Court's orders, all made before the Constitution came into force, refusing to direct the Appellate Tribunal to state a case under subsection (2) of section 66 and that such an appeal, on the authority of the Lahore High Court's decision in Feroze Shah v. Income‑tax Commissioner Punjab of N.‑W. F. P. (A I R 1931 Lah. 138) lies under clause 29 of the Letters Patent as of right and without any certificate except as to the value of' the matter in issue, as well as under section 109 read with section 110 of the Code of Civil Procedure. Having heard counsel at length we are of the view that such an appeal does not at all lie. Before the provision that now occurs as subsection (2) of section 66‑A of the Income‑tax Act appeared on the statute book there was no express reference in the Income- tax Act to an appeal to His Majesty in Council, and it was held by the Privy Council in Tata Iron and Steel Co. Ltd. v. Chief Revenue Authority of Bombay (50 I A 212), that the High Court in entertaining and giving opinion on a reference under the Income‑tax Act exercises a consultative jurisdiction and that the opinion given by it is not a final judgment, decree or order within the meaning of clause 39 of the Letters Patent, from which an appeal would lie to His Majesty in Council. As on this interpretation of the Act the assessees as well as the Department were deprived of the benefit of the High Court's opinion on complicated questions of law in important cases under the Income‑tax Act, the Act was amended in 1925 by the insertion of section 66‑A, sub section (2) of which provided that an appeal shall lie to His Majesty in Council from any judgment of the High Court delivered on a reference made under section 66 in any case which the High Court certifies to be a fit one for appeal to His Majesty in Council. It must follow from the aforesaid decision of the Privy Council that the present Supreme Court's jurisdiction to entertain a statutory appeal in matters arising under the Income‑tax Act is limited to the case mentioned in subsection (2) and that such jurisdiction can be invoked only where the High Court has delivered a judgment on a reference made to it under section 66 and also certified the case to be a fit one for appeal to the Supreme Court. In the present cases, therefore, no judgments having been delivered by the High Court on any reference under section 66, and the High Court not having certified the appeal to be a fit one for appeal to the Supreme Court, no appeal lies, and the High Court, even if it had so wished, could not have given leave to appeal to this Court. Sub section (2), of section 66‑A has been interpreted by the Privy Council in Delhi Cloth of General Mills Co. Ltd. v. Income‑tax Commissioner, Delhi and others (54 I A 421) as excluding from any right of appeal cases which fall within the require ments of section 110 of the Civil P. C. and as confining that right to cases which are certified to be otherwise fit for appeal to His Majesty in Council, even though the amount involved in them be Rs. 10,000 or upwards and the High Court in its opinion may have differed from the opinion of the Appellate Tribunal. It is obvious, therefore, that where the question is whether an appeal to the Supreme Court lies in an income‑tax matter, the question has first to be decided not with reference to sections 109 and 110 of the Code of Civil Procedure, but solely on the terms of sub section (2) of section 66‑A of the Act, though once the case is held to fall within that subsection, the provisions of the Code relating to appeals to the Supreme Court will apply to the appeal as if it were an appeal from a decree of a High Court. The correctness of the Lahore decision in Feroze Shah's case, appears to have been doubted by the Privy Council itself in Feroze Shah v. Commissioner of Income‑tax Punjab (2) though there was no pronouncement on the subject. It seems, however, to be clear to us that when a High Court rejects an assessee' s application under subsection (60 I A 325) of section 66 and declines to call upon the appellate Tribunal to state a case, it does not act in exercise of its original or appellate jurisdiction but only in exercise of a special statutory jurisdiction conferred on it by the Income‑tax Act, and that the Lahore High Court was plainly wrong in that case in assuming, without any discussion of the question, that the jurisdiction exercised by the High Court in such cases is original and in holding that for that reason an appeal lay as of right to His Majesty if the amount of the tax involved was or exceeded Rs. 10,

000. As pointed out by the Dacca High Court in the present case, the Lahore case has not been followed anywhere in the Indo‑Pakistan sub‑continent and has been held by the Supreme Court of India in Seth Prem Chand Satram Das v. The State of Bihar (1951SCR161:AIR1951SC14) to have been wrongly decided. If the view taken in the Lahore case were held to be correct, it would lead to the apparent absurdity that, if the Appellate Tribunal refuses to state a case because no question of law is involved and the High Court agreeing with the Tribunal dismisses the application under subsection (2) of section 66, an appeal would lie to the Supreme Court as of right of the value of the subject -matters is Rs. 10,000, or more, whereas in a case where the Tribunal and the High Court both agree that the matter gives rise to a question of law, but the High Court, in the circumstances of the case, feels that the case is not a fit one for appeal to the Supreme Court, no appeal would lie to the Supreme Court. In our judgment no appeal lies in these cases either under clause 39 of the Letters Patent or under section 109 read with section 110 of the Code of Civil Procedure. Clause 39 of those Letters and clause (b) of section 109 of the Code are not applicable because the High Court in refusing the application under subsection (2) of section 66 did not act in the exercise of its original jurisdic tion and clause (a) of section 109 of the Code does not apply because the High Court in refusing that application did not exercise any appellate jurisdiction. And section 110 of the Code is not in point because that section refers back only to cases mentioned in clauses (a) and (b) of section

109. As regards section 109 (c) an appeal would lie under that provision only if the High Court certifies a case to be a fit one for appeal and that Court did not consider the present cases as satisfying that requirement. The appeals are there fore dismissed. In view of the fact that the appellants came to this Court on the authority of a reported decision we direct the parties to bear their own costs, here. A. H. Appeals dismissed.