JUDGMENT U. L. BHAT, C.J. - This is an application filed by the State of Madhya Pradesh under section 44(2) of the M.P. General Sales Tax Act, 1958 (for short, "the Act"), to direct the Appellate Tribunal (Board of Revenue), to make a reference on the question of law arising out of the proceedings before the statutory authorities. 2. First respondent is a dealer registered under the Act. The relevant period of assessment is November 12, 1977 to October 31, 1978. The first respondent is a timber merchant and was assessed for the above period. The sales tax authority and the appellate authority rejected the claim of the first respondent for set-off under rule 20-A of the M.P. General Sales Tax Rules, 1959 (for short, "the Rules"). In further appeal, the Board held that the first respondent is entitled to set-off of surcharge from the sales tax liability. The Board declined to make a reference under section 44(1) of the Act at the instance of the Revenue. Hence this application. 3. Turnover tax was introduced in 1972. As the Act stood till August 31, 1976, a dealer who pays turnover tax was not entitled to deduction from the sales tax liability. The statutory provision was amended with effect from September 1, 1976 introducing a provision for set-off of turnover tax paid. Rule 20-A was made prescribing the conditions to be satisfied for granting set-off. Two changes brought about in the Act by amendment with effect from May 1, 1977 are relevant. One is the deletion of provision for set-off. The other is the redesignation of turnover tax as surcharge. However, rule 20-A of the Rules was not deleted or amended. The Board of Revenue took the view that even if there is no statutory provision for set-off, set-off can be allowed under rule 20-A of the Rules. According to the Revenue, the Rule should have been deleted and even if not deleted, it would fall to the ground since it had no statutory support. These circumstances certainly give rise to a serious question of law to be referred to the High Court. We find that the dismissal of the reference application was not justified. 4. According to the Revenue, the Rule should have been deleted and even if not deleted, it would fall to the ground since it had no statutory support. These circumstances certainly give rise to a serious question of law to be referred to the High Court. We find that the dismissal of the reference application was not justified. 4. The question of law which arises is whether a dealer is entitled to claim set-off of surcharge amount from sales tax dues under rule 20-A even though rule 20-A of the Rules has lost statutory support by amendment introduced to section 7-B of the Act with effect from May 1, 1977 and if the dealer is not entitled to surcharge, what would be the correct rate of tax ? We direct the Board of Revenue to state the case and make a reference accordingly. Petition is allowed. Petition allowed.