1. At the instance of the assessee, in this reference under section 69 of the Gujarat Sales Tax Act, 1969, the following question of law has been referred to us for our opinion :
'Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that 24 transactions of the applicant amounting to Rs. 8,77,064 were really inter-State sales of the applicant and not consignment sales ?'
2. The facts leading to this reference, shortly stated, are as under :
The assessee is a partnership firm, having an oil mill at Gondal for the manufacture and sale of groundnut oil and oilcakes, and is registered as a dealer under the Gujarat Sales Tax Act, 1969, as well as the Central Sales Tax Act, 1956. It appears that the Sales Tax Officer had paid a surprise visit to the place of business of the applicant and seized the account books and other papers. He then proceeded to assess the assessee for S.Y. 2027 under the Central Sales Tax Act, 1956. In the course of the assessment, the Sales Tax Officer considered certain transactions amounting to Rs. 8,77,064 as inter-State sales, which, according to the assessee, were consignment transactions. The Sales Tax Officer, therefore, levied tax thereon at the rate of 10 per cent. under the Central Act. The assessee, therefore, carried the matter in appeal before the Assistant Commissioner of Sales Tax contending, inter alia, that the transactions in question were consignment sale and not inter-State sales as held by the Sales Tax Officer. In support of this contention, the assessee had produced the sale list of the various transactions in question and affidavits of the persons from Rajasthan, except that of M/s. Lamipat Pahadia to whom the goods were despatched. The assessee also produced entries from its trading books to show that the transactions in question were not inter-State sales. The Assistant Commissioner rejected the contention as he was not satisfied by the evidence produced in support thereof with the result that the appeal was dismissed. The assessee, therefore, carried the matter in further appeal before the Gujarat Sales Tax Tribunal. The Tribunal reappraised the entire evidence and reached the conclusion on appreciation thereof that the assessee appeared to have joined hands with one party from Rajkot to whom the goods must have been sold for being despatched to the destination outside the State, as per the instructions of the said party from Rajkot, and the goods were accordingly despatched by the assessee to the dealers in Rajasthan in performance of the said contract for sale. The Tribunal also found that the despatch instructions were integral parts of the contract for sale in pursuance of which the goods had moved from the State of Gujarat to the various places in Rajasthan. The Tribunal ultimately, therefore, held that all the 24 transactions noted in the exercise books seized from the place of business of the assessee were inter-State sales and rejected the contention of the assessee of they being consignment sales. The Tribunal, therefore, dismissed the appeal. At the instance of the assessee, the question set out above has been referred to us for our opinion.
3. This reference shall have to be unfortunately rejected though we are not satisfied with the approach of the Tribunal and the conclusion on the facts reached by it as a result of reappraisal of the evidence in the course of the appeal before it. The jurisdiction of this Court, hearing reference under section 69 of the Gujarat Sales Tax Act, 1969, is very limited and it has to advise and give its opinion only on questions of law referred to it by the Tribunal, which is a final fact-finding authority. This Court does not sit as a court of appeal as held by the Supreme Court in Lakshmi Cotton Mfg. Co. Ltd. v. Commissioner of Sales Tax, Bombay ( 26 S.T.C. 263 (S.C.).), where the Supreme Court was considering the scope of the jurisdiction of the High Court under section 34 of the Bombay Sales Tax Act, 1953. Two questions were referred to the Bombay High Court in the Lakshmi Cotton Mfg. Co.'s case by the Sales Tax Tribunal of Maharashtra for its opinion under section 34 of the 1953 Act. These two questions were :
'(1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the impugned transactions were not purchases within the meaning of section 2(13) of the Bombay Sales Tax Act, 1953 and
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the impugned purchases were effected by the respondents outside the State of Bombay and that they were not inside the State of Bombay as per explanation to article 286(1)(a) of the Constitution of India ?'
4. The High Court answered the first question in the negative and held that the Tribunal was not justified in law in holding that the said transactions were not purchases within the meaning of section 2(13) of the 1953 Act. The second question was not answered by the High Court since it found itself unable to answer it on the material available on the record. On the concession of the parties, the High Court remanded the matter to the Tribunal with the direction that the Tribunal should decide afresh, according to law, after giving the parties an opportunity to adduce evidence. In appeal, the Supreme Court, speaking through Shah, J., held that the High Court could, under section 34(4), refer the case to the Tribunal to make such additions thereto or alterations therein, but the High Court could not sit in appeal over the judgment of the Tribunal, the jurisdiction with which the Act does not invest the High Court.
5. In Damodar Valley Corporation v. State of Bihar ( 12 S.T.C. 102 (S.C.).), the question referred to the High Court was whether the transaction between the parties was merely a contract of hiring or a sale within the meaning of section 2(g) of the Bihar Sales Tax Act, 1947. The High Court has found that the transaction in question was amounting to sale within the meaning of the said section. In appeal before the Supreme Court, a further question was sought to be raised, whether the appellant corporation was a dealer or not. The court, speaking through Sinha, C.J. (as he then was), held that it is well-settled that the High Court is acting only in an advisory capacity and it cannot go beyond the question referred to it by the Board of Revenue.
6. The scope of the jurisdiction of the High Court in references under section 66 of the Income-tax Act, 1922, was considered in Commissioner of Income-tax, Bombay City v. Greaves Cotton and Co. Ltd. ( 68 I.T.R. 200 (S.C.).) and it has been held therein as under :
'It is well-established that the High Court is not a court of appeal in a reference under section 66 of the Indian Income-tax Act, 1922, and it is not open to the High Court in such a reference to embark upon a reappraisal of the evidence and to arrive at findings of fact contrary to those of the Appellate Tribunal. It is the duty of the High Court to confine itself to the facts as found by the Appellate Tribunal and to answer the question of law in the context of those facts. It is true that the finding of fact will be defective in law if there is no evidence to support it or if the finding is unreasonable or perverse. But, in the hearing of a reference under section 66 of the Income-tax Act, it is not open to the assessee to challenge such a finding of fact unless he has applied for a reference of the specific question under section 66(1). In India Cements Ltd. v. Commissioner of Income-tax ( 60 I.T.R. 52 (S.C.).), it was pointed out by this court that in a reference the High Court must accept the findings of fact reached by the Appellate Tribunal and it is for the party who applied for a reference to challenge those findings of fact, first, by an application under section 66(1). If the party concerned has failed to file an application under section 66(1) expressly raising the question about the validity of the findings of fact, he is not entitled to urge before the High Court that the findings are vitiated for any reason. The same view has been expressed by this court in Commissioner of Income-tax v. Sri Meenakshi Mills Ltd. ( 63 I.T.R. 609 (S.C.).) We are therefore of the opinion that the High Court wa in error in embarking upon a reappraisal of the evidence before the Appellate Tribunal and in setting aside the finding of fact of the Appellate Tribunal that the termination of the managing agency agreement was not a bona fide transaction and the same was done for an improper or oblique purpose.'
7. Mr. Mody, the learned Advocate appearing for the assessee, therefore, urged, in the first place, that the question whether the impugned transactions were inter-State sales or not was mixed question of law and fact and, though the finding of the Tribunal on the facts found was final, its decision as to the legal effect of those findings is a question of law, which can be reviewed by this Court. In support of this contention, Mr. Mody relied on the legal position summed up by the Supreme Court as emerging on consideration of the various authorities in Sree Meenakshi Mills Ltd. v. Commissioner of Income-tax ( 31 I.T.R. 28 (S.C.).) and, more particularly, relied on principle No. (2), for purposes of contending that the question referred to is a mixed question of law and fact and, therefore, the basic facts can be looked into. We are afraid that this is too broad a submission to which we can accede to. In Commissioner of Income-tax, West Bengal v. Rajasthan Mines Ltd. ( 78 I.T.R. 45 (S.C.).), a question arose whether the right acquired under the deeds to collect arrears of royalty and rent could be considered to be income or not. The Supreme Court held, affirming the decision of the High Court, that the facts found by the Tribunal, either individually or collectively, did not afford any basis to come to the conclusion that the purchases made by the respondent and the subsequent sale amounted to an adventure in the nature of trade. The Supreme Court held that if the finding of the Tribunal that the transactions were made in the course of a business is based on an inference from the primary evidentiary facts proved in the case, its correctness or validity is open to challenge in reference proceedings within narrow limits, an that it is open to challenge a conclusion of fact drawn by the Tribunal on the ground that it is not supported by any legal evidence or that the impugned conclusion drawn from the relevant fact is not rationally possible and, if such a plea is established, the court has to consider whether the conclusion in question is not perverse and should not, therefore, be set aside.
8. Now, as stated above, in view of this settled legal position, it cannot be gain-said (sic) when the Tribunal found as a matter of fact as under :
'As said by us above, the appellant appears to have joined hands with a Rajkot party to whom he has sold the goods for being despatched to destinations outside the State as per instructions of the buyer of Rajkot sent to him subsequently and the goods were despatched by the appellant in performance of the said contracts of sale. Taking a total view of the things, it clearly appears to us that the despatch instructions were the integral part of the contracts of sale and the goods have been moved from this State to the destinations in Rajasthan as a result of the covenant or incident of the contracts of sale entered into between the appellant on the one hand and a person of Rajkot on the other hand. This becomes evident from the way and manner in which the transactions are recorded by the appellant in the seized item No. 5, which is an exercise book, considered conjointly with the other facts and circumstances appearing in the case. In view of the fact that this overwhelming evidence supported by circumstances tilting in favour of the conclusion that the transactions are inter-State sales, the affidavits of the so-called commission agents of Rajasthan have little evidentiary value and, therefore, we are inclined to discard them and we think that the sales tax authorities were also right in doing so. The only difference in the view which we take and the view taken by the sales tax authorities is, if we may mention so, that the sales tax authorities have come to a conclusion that the movement of the goods was occasioned as a result of the sales effected by the appellant to the person of Rajasthan, who is, according to the appellant, his commission agent, whereas our inference and conclusion is that the sales were effected by the appellant to some person of Rajkot and that as a result of such sales the goods were moved from this State to the State of Rajasthan.'
9. In the present case, we do not agree with the learned Advocate for the assessee that the question involved is a mixed question of law and fact, as contended by hi, The question, whether the assessee had entered into a contract with a Rajkot party and that as a result of the contract the goods moved from this State to the State of Rajasthan is a pure question of fact and the inference from the proved facts, being again itself a question of fact, it cannot be attacked as being erroneous in law unless there is no evidence to support it or, in other words, it is perverse.
10. The learned Advocate for the assessee, therefore, attempted to persuade us that we should interpret the question referred to us as if it is a question of fact and the inference from proved facts is challenged as one without evidence. The learned Advocate emphasises that in the question itself this is implicit because the tenor of the question raised by the Tribunal is, in effect and substance, a question whether the transactions were really inter-State sale effected by the assessee and whether the conclusion of the Tribunal that they were inter-State sales was justified. We cannot accede to this submission of the learned Advocate for the assessee since the question referred to us is on the assumption of the facts and circumstances of the case as found by the Tribunal to be correct. We have got not proceed on that basis since the assessee has not though fit not only by not seeking a specific question about the perversity of the finding by praying for such a specific question but has accepted it in its application before the Tribunal to be correct. In that view of the matter, therefore, we have no other alternative but to answer the question referred to us in the affirmative, that is, in favour of the revenue and against the assessee. The assessee shall pay the cost of this reference to the Commissioner.
11. Reference answered in the affirmative.