ORDER A. R. TIWARI, J. - The Appellate Tribunal (Board of Revenue, Gwalior) stated the case and referred the undernoted questions of law arising out of the order dated June 30, 1984 and subsequent order dated October 18, 1984, under section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958 read with section 9(2) of the Central Sales Tax Act, 1956 at the instance of the assessee- applicant (M/s. B. R. Phosphate, Meghnagar) on its applications marked as annexure A-1 and A-2. 1. Whether, under the facts and circumstances of the case, the Tribunal was justified in holding that the rock phosphate powder sold by the assessee is not a fertiliser and so such is liable to tax at 4 per cent and not at 2 per cent under section 3(a) of the Central Sales Tax Act, 1956 ? 2. If the answer to question No. 1 was in favour of the assessee, whether on the facts and circumstances of the case, the Tribunal was justified in holding that the amount of surcharge leviable under section 7(b) of the Madhya Pradesh General Sales Tax Act, 1958 will be included while calculating the rate of tax under section 8(2-A) of the Central Act ? 3. Whether, on the facts and circumstances of the case, the Tribunal was justified in holding that even if no application was made by the department regarding the quantum of penalty, it could suo motu enhance the same ? 4. Whether, on the facts and circumstances of the case, the Tribunal was justified in initiating action for enhancing the penalty having decided vide order dated June 30, 1984 that there was a liability to imposition of penalty under section 43(1) of the Madhya Pradesh General Sales Tax Act, 1958 ? 2. Facts lie in a narrow compass. The assessee is a registered dealer under the Central and State Act. It is engaged in the business of crushing of rock phosphate boulders and for sale of rock phosphate boulders and powder on inter-State basis. In respect of assessment period April 1, 1977 to March 31, 1978 the assessee filed the returns showing the inter-State sales at Rs. 3,00,006.80 whereas as per accounts such sales were found to be of Rs. 3,23,194.30. The assessee had shown the turnover in the returns. In respect of assessment period April 1, 1977 to March 31, 1978 the assessee filed the returns showing the inter-State sales at Rs. 3,00,006.80 whereas as per accounts such sales were found to be of Rs. 3,23,194.30. The assessee had shown the turnover in the returns. The Flying Squad, Ratlam inspected the premises of the assessee and gave report in the month of July, 1979, which was adverse to the assessee. The Sales Tax Officer disallowed the claim under section 6(2) of the Central Act amounting to Rs. 1,65,448 and also imposed the penalty of Rs. 2,000 under section 43(1) of the State Act by order dated December 10, 1981 (annexure B). The assessee filed the appeal before the Appellate Deputy Commissioner, Indore. The assessee however, remained absent and as such, an ex parte decision, adverse to the assessee, was passed on the merits (annexure C). The assessee then filed second appeal before the Board of Revenue. The Tribunal found that at every step the assessee behaved in a manner calculated to avoid payment of tax. It, therefore, issued notice for enhancement of penalty. The assessee contested the notice. The appeal was dismissed and the penalty was enhanced from Rs. 2,000 to Rs. 9,500. The adverse orders (annexures D/1 and D/2) were passed on June 30, 1984 and October 18, 1984. The assessee then filed the applications praying to the Tribunal to state the case and refer the questions. The Tribunal, on applications, stated the case and referred the questions as noted above. 3. The assessee did not remain present before this Court at the time of hearing. In fact the assessee did not appear even on the previous date, i.e., September 19, 1995. 4. Shri K. K. Gupta, learned Government Advocate for the department, urged that as the assessee at whose instance, the references are made, has chosen to remain absent and has thus not enabled the hearing of these reference, this Court be pleased to refuse to answer the references and also saddle the costs on the assessee. In support of this contention, Shri Gupta has placed reliance on (1993) 38 MPLJ 462 (Jamunadas Khanchand v. Commissioner of Sales Tax). 5. In support of this contention, Shri Gupta has placed reliance on (1993) 38 MPLJ 462 (Jamunadas Khanchand v. Commissioner of Sales Tax). 5. After surveying the case law on the point, this held as under in the aforesaid case of Jamunadas Khanchand (1993) 38 MPLJ 462 : "For the foregoing reasons, we are of the opinion that if the party at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper-books so as to enable hearing of the reference, this Court is not bound to answer the reference. We refuse to answer the reference and also saddle the assessee with the costs of the department quantified at Rs. 150." 6. The old section 66 of the Income-Tax Act, 1922 which was in pari materia with section 44(1) of the Madhya Pradesh General Sales Tax Act, 1958 had come up for consideration of the Division Bench of the Calcutta High Court in M. M. Ispahani Ltd., Calcutta v. Commissioner of Excess Profits Tax, West Bengal [1955] 27 ITR 188. The learned Chief Justice speaking for the Bench held : ".............before the duty contemplated by the section to decide the questions of law referred can arise, a hearing of the case must take place, because the section opens with the words : 'The High Court upon the hearing of any such case', etc. Where the party, who has caused the reference to be made and who is in the position of a plaintiff, fails to appear, no hearing of the case can take place and in my view since the preliminary condition of the sub-section is not satisfied in such a case, the consequent obligation of deciding the questions of law and delivering a judgment does not also arise. It appears to me, therefore, that it is not required of us that we should answer the question referred to us in this reference at all, since the assessees are not appearing before us. We, therefore, decline to answer the question." 7. This Court is, thus, under no obligation to decide the questions of law referred by the Tribunal at the instance of the assessee because the assessee has failed to appear at the hearing and pursue the references. 8. We, therefore, find that the contention raised by Shri Gupta deserves to be permitted to prevail. This Court is, thus, under no obligation to decide the questions of law referred by the Tribunal at the instance of the assessee because the assessee has failed to appear at the hearing and pursue the references. 8. We, therefore, find that the contention raised by Shri Gupta deserves to be permitted to prevail. Accordingly we refuse to answer the references and also saddle the assessee with costs quantified at Rs. 300 (one set) payable to the department. 9. A copy of this order shall be placed in the record of M.C.C. No. 304 of 1986.