(On appeal from the-judgment dated 21-6-1989 of the High Court of Sindh, Karachi, in C.Ps. 2194 and 205 of 1988).

(a) Income Tax Ordinance (XXXI of 1979)---

----Ss. 59(1) & 65--- Constitution of Pakistan (1973), Art. 185(3)---Self Assessment Scheme (1984-85), para. 9---Leave to appeal was granted to examine the contention that High Court had failed to appreciate that the assessment having been made under the Self-Assessment Scheme 1984-85 read with S.59(1) of the Ordinance the rule laid down in Edulji Dinshaw's case 1990 PTD 155 was not attracted.

Edulji Dinshaw's case 1990 PTD 155 ref.

(b) Self-Assessment Scheme---

--- Purpose.

The purpose of self-assessment scheme introduced in the Income Tax Law of Pakistan is to encourage the taxpayers to make contribution towards the State efforts in running the Government and other related State machinery more willingly than it used to be under the normal assessment scheme. One purpose was to save an honest taxpayer from unnecessary suspicion, accusation and torture of being accused and/or found guilty of deceit and falsehood. This being the main purpose, care was taken to safeguard the interest of the State also against deceit and cheating even in the self assessment scheme. For the latter purpose the scheme as well as the provisions in the Income Tax Ordinance provided for a very limited re-opening of the self-assessment.

(c) Income Tax Ordinance (XXXI of 1979)---

----Ss. 65 & 59---Self-Assessment Scheme (1984-85), para. 9---Re-opening of assessment in case of self-assessment on basis of definite information that purchase price declared by the assessee for a plot of land was on the low side-- Duty of department detailed---"Definite information "---Connotation

The assessees were assessed for the assessment year 1984-85, after scrutiny of the account book the relevant information asked for. However, after the expiry of nearly three years the notices were issued for re-opening the assessment on the ground that the purchase price declared by the assessees for a plot of land was on the low side.

The Department's case was that the plot of land was purchased at a much higher price. It had been intentionally priced below the market rate so as to save income-tax. The material relied upon was the prices of certain other plots in the same locality.

It was the duty of the department before re-opening a case of self assessment to be in possession of definite information regarding the department's assertion against the assessee. The expression "definite information" and similar other expressions used in section 65 of Income Tax Ordinance, 1979 and para. 9 of the Self-Assessment Scheme (1984-85) or other related provisions certainly meant much more than mere material so as to cause a reasonable belief or even such evidence, which might lead to a definite belief. Unless there is definite direct information and there is no further need to put the said definite information to trial by putting in further supporting material the process of self-assessment could not be re-opened. In order to establish through "definite information", the department had to rely upon further reasoning in order to clothe their information with credibility what to talk of definiteness, They had to make inquiry in regular trial in which all the persons who purchased the other plots (or majority of those, who sold or purchased the other plots) might have been examined in order to know under what conditions they paid price which were higher than the price mentioned by the assessees in the case. And in any case the seller of the plots in this case had to be examined in order to ascertain whether the price mentioned by the assessee, was not a genuinely paid price. It partakes of some procedural aspects of the disputes in pre-emption and other land cases where the price of land is in dispute. Definite information in the context of the law under discussion could not mean mere difference of opinion or further reasoning or other exercise of logic or even drawing of conclusions.

(d) Income Tax Ordinance (XXXI of 1979)---

----S. 65---Constitution of Pakistan (1973), Art. 199---Re-opening of assessment--- Constitutional jurisdiction of High Court, exercise of ---Assessee approached the High Court in its Constitutional jurisdiction without seeking and exhausting the statutory remedy---Supreme Court disapproved, in such situation, the interference by the High Court in tax matters when the normal course being adopted by all the High Courts in matters other than tax, rule of alternate remedy was being followed.

(e) Constitution of Pakistan (1973)---

---Arts. 199 & 185---Income Tax Ordinance (XXXI of 1979), S.65-- Constitutional jurisdiction of High Court---Tax matter---Where after considerable arguments Supreme Court had already reached the conclusion and had also announced the same and the consequential dismissal of departmental appeal was yet to be announced, the appellant department brought to the notice of the Court that assessee had approached the High Court in its Constitutional jurisdiction without seeking and exhausting the statutory remedy, Supreme Court withdrew the leave grant order and disposed of the appeal accordingly.

Shaik Hyder Advocate Supreme Court and S.M. Abbas, Advocate-on- Record for Appellants.

Rehman Hasan Naqvi, Advocate Supreme Court and M.S. Ghaury, Advocate-on-Record for Respondent.

Date of hearing: 31st January, 1992.

JUDGMENT

MUHAMMAD AFZAL ZULLAH, CJ.---In these appeals through leave of the Court the question noted for examination in the leave grant order is that "the High Court has failed to appreciate that the assessment in the present case having been made under the Self-Assessment Scheme (1984-1985) read with section 59(1) of the Income Tax Ordinance, the rule laid down by this Court in Edulji Dinshaw (1990 PTD 155) was not attracted".

The matter has arisen out of the well-known self-assessment scheme introduced in the Income Tax Law of Pakistan so as to encourage the taxpayers to make contribution towards the State effort in running the Government and the other related State machinery more willingly than it used to be under the normal assessment scheme. One purpose was to save an honest tax-payer from unnecessary suspicion, accusation and torture of being accused and/or found guilty of deceit and falsehood. This being the main purpose, care was taken to safeguard the interest of the State also against deceit and cheating even in the self-assessment scheme. For the latter purpose the scheme as well as the provisions in the Income Tax Ordinance provided for a very limited re-opening of the self-assessment.

These appeals represent both the above-visualized two aspects of the self-assessment scheme. The respective respondents made use of the concession and submitted the returns under the said scheme. The assessment was re-opened as mentioned, in the impugned judgment as follows:--

"Brief facts leading to the filing of the above petitions are that the petitioners were assessed for the assessment year 1984-85 by respondent No.l, after scrutiny of the account books and the relevant information asked for by an order dated 6-4-1985. However, after the expiry of nearly three years the impugned notices dated 8-2-1988 were issued for re-opening the assessment on the ground that the purchase price declared by the petitioners for a plot of land situated in Clifton area was on the low side. The petitioners, therefore, filed C.P.No.D-204/198$ challenging the above impugned notices.

The petitioners were also assessed for the assessment year 1986-87 by an assessment order dated 11-1-1987 after scrutiny of the account books and the other information. However, respondent No.l issued the impugned notices under section 65 of the Ordinance again on the ground that the purchase price of the plot disclosed in the above assessment year was not the correct price and was below the market price. The petitioner, therefore, filed the aforesaid petition i.e. C.P.No.D-205/1988."

The appellants' case was that the plot of land was purchased at a much higher price. It had been intentionally priced below the market rate so as to save income-tax. The material relied upon was the prices of certain other plots in the same locality. The High Court while disposing of the contention on factual controversy involved in the case, held as follows:--

"This D.B. in two identical cases has recently allowed two identical petitions; namely C.P.No.D-1195/1987 by a judgment dated 13-6-1989 and C.P.No.D-111196 /1989 by a judgment dated 18-6-1989. Reliance has been placed in the above two judgments on a number of judgments of the superior Courts of Pakistan including the Hon'ble Supreme Court in Civil Appeal No.K-1 of 1983 (Edulji Dinshaw Ltd. v. Income Tax Officer), decided on 16-5-1988, in which it has been held that once all the facts have been fully disclosed by the assessee and considered by the Income Tax Authorities and the assessments have been consciously completed, the assessment cannot be re-opened in the absence of any definite information merely on the basis of change of opinion."

Learned counsel for the appellants however reiterated the position of the department as noted earlier. After some discussion; as to whether para. 9 of the self-assessment scheme, section 59 and/or section 65 of the Income Tax Ordinance were attracted to the present case, it was agreed that from whatever angle it may be examined it was the duty of the department before re-opening a case of self-assessment to be in possession of definite information regarding the department's assertion against the assessee. The expression "definite Information", and similar other expressions used in the above-noticed provisions or other related provisions certainly meant much more than mere material so as to cause a reasonable belief or even such evidence which might lead to a definite belief. Unless there is definite direct information and there is no further need to put the said definite information to trial by putting in further supporting material the process of self-assessment could not be reopened.

In this case in order to establish through so-called `definite information', the department had to rely upon further reasoning in order to clothe their information with credibility what to talk of definiteness. They had to make inquiry in regular trial in which all the persons who purchased the other plot (or majority of those who soled or purchased the other plots) might have been examined in order to know under what conditions they paid prices which were higher than the price mentioned by the respondent in this case. And in any case the seller of the plots in this case had to be examined in order to ascertain whether the price mentioned by the respondent, was not genuinely paid. It partakes of some procedural aspects of the disputes in pre-emption and other land cases where the price of the land is in dispute. There is plethora of law on this aspect of pricing of land. Keeping all this in view we agree with the learned Judges of the High Court that definite information in the context of the law under discussion could not mean mere difference of opinion or further reasoning or other exercise of logic or even drawing of conclusions. Accordingly, the judgment of the High Court is unassailable in so far as the findings of fact are concerned.

When after considerable arguments we had already reached the above conclusion and had also announced it and the consequential dismissal of the appeals was yet to be announced, the learned counsel for the appellants brought to our notice that the respondent in this case approached the High Court in its writ jurisdiction without seeking and exhausting the statutory remedies. In several of the very recent judgments we have not approved in such situation the interference by the High Court in tax matters, when the normal course being adopted by almost all the High Courts in matters other than tax, rule of alternate remedy is being followed.

In the above extraordinary position when we had made part announcement, there is no alternative left except to withdraw the leave grant order and dispose of the appeal. We order accordingly, with no order as to costs.

M.BA./I-167/SOrder accordingly.