TMI Blog1970 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... his appeal is filed with certificate granted by the High Court of Patna under section 66A(2) of the Indian Income-tax Act, 1922. The India Machinery Stores (P.) Ltd. is a private company incorporated with the object of taking over the business carried on by the India Machinery and Mills Stores, hereinafter called "the vendors". By an agreement dated August 2, 1956, the company agreed to purchase all the assets of the vendors, goodwill, and the "book-debts and other liabilities and claims against the company" as on the date of transfer in consideration of allotment of 250 fully paid-up shares of the company of the nominal value of Rs. 2,60,000. It was provided by clause 4 of the agreement: " That all assets of the vendors in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 66A(2) of the Indian Income-tax Act, 1922, and is a fit case for appeal to the Supreme Court." At the hearing of the appeal, on behalf of the Commissioner of Income-tax, it is contended that the appeal is incompetent, since the High Court in certifying the case as fit for appeal to this court did not set out the question of law which this court has to decide. It was urged that the certificate or the order certifying the case must disclose that some substantial question of public or private importance arises in the case, and on that account the case is certified to be fit for appeal. In our judgment, the contention must be accepted. Section 66A of the Indian Income-tax Act, 1922, which was added by the Indian Income-tax (Amendmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for example, as those in which the point in dispute is not measurable by money, though it may be of great public or private importance. To certify that a case is of that kind, though it is left entirely in the discretion of the court, is a judicial process which could not be performed without special exercise of that discretion, evinced by a fitting certificate. In Radha Krishn Das v. Rai Krishn Chand a Division Bench of the Allahabad High Court had issued a certificate stating that "though the valuation of the case was below Rs. 10,000 yet as regards the value and nature of the case it fulfilled the requirements of section 596 of Act No. XIV of 1882 (Code of Civil Procedure)". In that case the value of the subject-matter was less than Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequence, that they seriously affect the rights of litigant parties and that they ought to be given in such a form that it is impossible to mistake their meaning upon their face." Again, the Judicial Committee observed in Commissioner of Income-tax v. Sir S. M. Chitnavis that when a certificate is granted under section 66A of the Income-tax Act it must be on a question affecting not only a particular assessee and depending upon the state of the evidence in a particular case, but a question of great public importance affecting assessees generally and depending upon general principles. In granting the certificate the High Court merely observed that it was "a fit case for appeal to the Supreme Court"; they did not indicate the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be referred to the High Court under section 66 of the Indian Income-tax Act, in the proposed appeal a question of law of great public or private importance necessarily arises. Any other view would make every opinion of the High Court in a reference under section 66 appealable to this court. In our view, the certificate granted by the High Court was defective. It was also urged that a practice is fairly common in some of the High Courts to certify a case under section 66A(2) without recording any reasons or the grounds for certifying the case, and we may not penalise the company when we are enunciating the true rule for the first time. But the practice, in our judgment, was laid down many years ago by the decisions of the Judicial Committ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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