Commissioner of Income Tax vs Mangalam Arts

Rajesh Balia, J.—Heard the learned counsels for the parties. The Commissioner, Bikaner, has filed this application and requires this Court to direct the Tribunal, Jaipur Bench, to state the case and refer the following question of law arising out of the Tribunal''s order dated 29-12-1997, in IT Appeal No. 570 (Jp.) of 1992, for the assessment year 1987-88:

Whether, on the facts and in the circumstances of the case and having regard to clause (aa) of Explanation to section 80HHC of the income tax Act, 1961, the Appellate Tribunal was right in holding that the sales made to foreign tourists at the assessee''s counter located in India could be treated as export turnover?

The Tribunal relying on its earlier order, has declined to refer the question to this Court. Hence, this application u/s 256(2) of the income tax Act, 1961 (''the Act'') has been filed by the Commissioner, Bikaner.

Having heard the learned counsels for the parties, we are of the opinion that no question of fact is involved. It pertains to determining and interpreting clause (aa) of the Explanation to section 80HHC of the Act and as to in what circumstances local sales made to foreign tourists can be considered as an export and to be included in determining the export turnover for the purpose of claiming deduction u/s 80HHC. The interpretation of the statute has always been considered to be a question of law. Once a question of law arises out of the Tribunal''s order and which has not been decided or answered so far by the Apex Court, the Tribunal is bound to make reference to this Court. In view of our conclusion, we allow this application and direct the Tribunal to state the case and refer the aforesaid question to this Court for its opinion.