Case: Messrs Jaipur Mineral Development Syndicate, Jaipur Vs. Commissioner of Income Tax, New Delhi

that it had become functus officio to entertain the application because of its earlier order declining to answer the reference. It is this order which is the subject-matter of the appeal. 4. We have heard Mr. Desai on behalf of the appellant and Mr. Manchanda on behalf of the revenue. Mr. Manchanda has brought to our notice a decision of the Calcutta High Court in M. M. Ispahani Ltd., Calcutta v. Commissioner of Excess Profits Tax, West Bengal [(1955) 27 ITR 188 (Cal)] wherein the High Court held that when a party at whose instance the reference had been made under Section 66(1) of the Indian Income-tax Act, 1922 does not appear at the hearing of the reference, the High Court is not bound to answer the question referred to it and should not do so. It is urged by Mr. Manchanda that the above decision has been followed by some of the other High Courts. As against that, Mr. Desai on behalf of the appellant has urged that the correctness of those decisions is open to question in view of the decision of this Court in the case of Commissioner of Income-tax, Madras v. S. Chenniappa Mudaliar [(1969) 74 ITR 41 : (1969) 1 SCC 591 ]. It was held by this Court in that case that an appeal filed by the assessee before the tribunal under Section 33 of the Act should be disposed of on merits and should not be dismissed in default because of non-appearance of the appellant. The Court in this context referred to Section 33(4) of the Act and particularly the word "therein" used in that sub-section. It is urged by Mr. Desai that as the tribunal is bound to dispose of the appeal on merits even though a party is not present, likewise the High Court when a question of law is referred to it, should dispose of the reference on merits and answer the question referred to it. In our opinion, it is not essential to express an opinion about this aspect of the matter, because we are of the opinion that the High Court was not functus officio in entertaining the application which had been filed on behalf of the appellant for rehearing the reference and disposing of the matter on merits. 5. A party or its counsel may be prevented from appearing at the hearing of a reference for a variety of reasons. In case such a party shows, subsequent to the order made by the High Court, declining to answer the reference, that there was sufficient reason for its non-appearance, the High Court, in our opinion, has the inherent power to recall its earlier order and dispose of the reference on merits. We find it difficult to subscribe to the view that whatever might be the ground for non-appearance of a party, the High Court having once passed an order declining to answer the question referred to it because of the non-appearance of that party, is functus officio or helpless and cannot pass an order for disposing of the reference on merits. The High Court in suitable cases has, as already mentioned, inherent power to recall the order made in the absence of the party and to dispose of the reference on merits. There is nothing in any of the provisions of the Act which, either expressly or by necessary implication, stands in the way of the High Court from passing an order for disposal of the reference on merits. The courts have power, in the absence of any express or implied prohibition, to pass an order as may be necessary for the ends of justice or to prevent the abuse of the process of the court. To hold otherwise would result in quite a number of cases in gross miscarriage of justice. Suppose, for instance, a party proceeds towards the High Court to be present at the time the reference is to be taken up for hearing and on the way meets with an accident. Suppose, further, in such an event the High Court passes an order declining to answer the question referred to it because of the absence of the person who meets with an accident. To hold that in such a case the High Court cannot recall the said order and pass an order for the disposal of the reference on merits, even though full facts are brought to the notice of the High Court, would result in obvious miscarriage of justice. It is to meet such situations that courts can exercise in appropriate cases inherent power. In exercising inherent power, the courts cannot override the express provisions of law. Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal of the reference on merits, the courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the court with due diligence and shows sufficient cause for its non-appearance in the date of hearing. 6. Our attention has been invited to the decision of the Allahabad High Court in Roop Narain Ramchandra (P) Ltd. v. Commissioner of Income-tax, U.P. [(1972) 84 ITR 181 (All) ] wherein the High Court held that it has no power to recall an order returning a reference unanswered. For the reasons stated above, we are unable to agree with the view taken by the Allahabad High Court in that decision. The facts brought out in the application filed on behalf of the appellant show, in our opinion, that there was sufficient cause for the non-appearance on behalf of the appellant on the date of hearing as well as for the non-filing of the paper books within time. It also cannot be said that there was lack of diligence on the part of the appellant in approaching the High Court for recalling its earlier order and for disposing of the reference on merits. 7.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Suppose, further, in such an event the High Court passes an order declining to answer the question referred to it because of the absence of the person who meets with an accident. To hold that in such a case the High Court cannot recall the said order and pass an order for the disposal of the reference on merits, even though full facts are brought to the notice of the High Court, would result in obvious miscarriage of justice. It is to meet such situations that courts can exercise in appropriate cases inherent power. In exercising inherent power, the courts cannot override the express provisions of law. Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal of the reference on merits, the courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the court with due diligence and shows sufficient cause for itse in the date of hearingWe find it difficult to subscribe to the view that whatever might be the ground fore of a party, the High Court having once passed an order declining to answer the question referred to it because of thee of that party, is functus officio or helpless and cannot pass an order for disposing of the reference on merits. The High Court in suitable cases has, as already mentioned, inherent power to recall the order made in the absence of the party and to dispose of the reference on merits. There is nothing in any of the provisions of the Act which, either expressly or by necessary implication, stands in the way of the High Court from passing an order for disposal of the reference on merits. The courts have power, in the absence of any express or implied prohibition, to pass an order as may be necessary for the ends of justice or to prevent the abuse of the process of the court. To hold otherwise would result in quite a number of cases in gross miscarriage of justice. Suppose, for instance, a party proceeds towards the High Court to be present at the time the reference is to be taken up for hearing and on the way meets with an accident.Suppose, further, in such an event the High Court passes an order declining to answer the question referred to it because of the absence of the person who meets with an accident. To hold that in such a case the High Court cannot recall the said order and pass an order for the disposal of the reference on merits, even though full facts are brought to the notice of the High Court, would result in obvious miscarriage of justice. It is to meet such situations that courts can exercise in appropriate cases inherent power. In exercising inherent power, the courts cannot override the express provisions of law. Where however, as in the present case, there is no express or implied prohibition to recalling an earlier order made because of the absence of the party and to directing the disposal of the reference on merits, the courts, in our opinion, should not be loath to exercise such power provided the party concerned approaches the court with due diligence and shows sufficient cause for itse in the date of hearingFor the reasons stated above, we are unable to agree with the view taken by the Allahabad High Court in that decision. The facts brought out in the application filed on behalf of the appellant show, in our opinion, that there was sufficient cause for thee on behalf of the appellant on the date of hearing as well as for theg of the paper books within time. It also cannot be said that there was lack of diligence on the part of the appellant in approaching the High Court for recalling its earlier order and for disposing of the reference on merits.