SUPREME COURT OF INDIA

Before:- S.P. Bharucha and Y.K. Sabharwal, JJ

Civil Appeal Nos.4071-4073 Of 2001(Arising out of S.L.P.(C) Nos. 2883- 2885/2001). D/d. 12.7.2001.

M/s. Kerala Liquor Corporation - Appellants

Versus

Commnr. of Income Tax, Cochin - Respondents

Constitution of India, Article 136 - Income Tax Act, 1961, Section 256(1) - Reference - High Court instead of answering the questions referred, remitted matter for fresh consideration - Not correct approach - High Court ought to have answered the questions - Reference restored to the file of High Court.

[Paras 2 to 4]

ORDER

S.P. Bharucha, J. - Leave granted.

2. These appeals arise on references to the High Court of Kerala of questions of law under Section 256(1) of the Income Tax Act. The High Court has come to the conclusion that it is not necessary for it to answer the questions but that the matter requires fresh consideration at the hands of the Tribunal, in view of what is stated, principally, in paragraph seven of its judgment.

3. It is, fairly, not disputed that the approach of the High Court is not correct and that the High Court ought to have answered the questions that were referred to it, having regard to the facts found by the Tribunal and on the basis thereof. Accordingly, it is necessary to restore the references to the file of the High Court to be heard and disposed of afresh, having due regard to the jurisdiction of the High Court in such matters. The appeals are allowed.

4. The order under appeal is set aside. The References (I.T.R.Nos.280, 281 and 282/1997) are restored to the file of the High Court of Kerala to be heard and disposed of afresh.

No order as to costs.

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