ZIARAT ENTERPRISES VS AHMED STEEL (PVT.) LTD.
1999 P T D 736
[Supreme Court of Pakistan]
Present: Ajmal Mian, C. J., Munawar Ahmed Mirza and Ch. Muhammad Arif, JJ.
ZIARAT ENTERPRISES and another
Versus
AHMED STEEL (PVT.) LTD. and others
Civil Petitions for Leave to Appeal Nos.453 and 976 to 982 of 1998, decided on 09/10/1998.
Balochistan Local Government Ordinance (II of 1980)---
----Ss.70 & 137---Income Tax Ordinance (XXXI of 1979), S.80-C(4)-- Notification No.5-182/81 (PLGB) A.O.-IV, dated 8-4-1982---Ad valorem cost of imported ships for recovery of octroi---Computation---Contractor on basis of Notification No.5-182 of 1981/(PLGB)A.O.-IV, dated 8-4-1982 had contended that ad valorem cost for computing amount of octroi on import of ships etc. would include taxes, duties, freight charges and penalties---Word "taxes" used in said Notification had connoted taxes which were relatable to imported ships etc. and not income-tax which was personal liability of importer---High Court had declared that contractor had no authority to treat advance income-tax to be one of components of value of imported goods in terms of said Notification for collecting octroi---High Court had directed contractor to refund proportionate amount of octroi charged from importers by adding amount of advance income-tax in value of imported ships-- Validity---High Court having rightly come to conclusion that amount of octroi to the extent relatable to income-tax, had been illegally recovered in excess of liability of importer, importer was entitled to a consequential relief of refund of such excess amount recovered from him by octroi contractor.
M. Ashraf Khan Tanoli, Advocate-on-Record for Petitioners (in all Petitions).
Akhtar Ali Mehmood, Advocate Supreme Court for Respondent No. l (in C. Ps. Nos.976 and 978 of 1998).
Malik Sikandar Khan, A.-G., Balochistan and Raja Abdul Ghafoor, Advocate-on-Record for Respondent No.2.
Anwar H. Mir, Advocate-on-Record for Respondent No.3 (in all Petitions).
Tanvir Bashir Ansari, Dy. A.-G. (on Notice).
Date of hearing: 9th October, 1998.
JUDGMENT
AJMAL MIAN, C.J.---By this common judgment we intend to dispose of the above 8 Civil Petitions for Leave to Appeal. CPLA No.453 of 1998 is directed against the judgment of a Division Bench of the High Court of Balochistan, dated 3-3-1998 passed in Constitution Petition No.431 of 1997 filed by respondent No. 1, whereas the remaining above 7 petitions have been filed against a common judgment, dated 18-6-1998 of the same Division Bench of the above High Court passed in Constitution Petitions
Nos. 132 to 135, 147, 149 and 150 of 1998, filed by respondent No. l in the above petitions, allowing the same as under:---
Constitution Petition No.431 of 1997 (which is the subject-matter of CPLA 453 of 1998).
"For the foregoing reasons petition is allowed declaring that respondent No.3 Contractor is not authorised/entitled under the law to add the advance paid income-tax being one of the component to determine ad valorem cost of the goods/ships for the purpose of charging octroi. Thus, the writ is accordingly issued, leaving the parties to bear their costs. "
Constitution Petition No. 132 of 1998 and other 6 connected Constitution Petitions (which are subject-matter of the above CPLA Nos. 976 of 1998 to 982 of 1998).
"Thus, for the foregoing reasons, petitions are allowed, declaring; that respondent No.3, had no lawful authority to treat the Advance Income-tax to be one of the component of the value of imported goods, in terms of Notification, dated 8th April, 1982, issued by the Government of Balochistan for collecting the octroi. As a consequence, directions are issued to Octroi Contractor-respondent No.3, to refund the proportionate amount of octroi charged from petitioners respectively by adding the amount of Advance Income , tax, in the value of imported goods from time to time."
The petitioner in CPLA No.453 of 1998 is a firm, namely, Ziarat Enterprises, whereas the petitioners in the remaining seven petitions is also a firm, namely, Shahbaz Traders. Both claim to be the Octroi Contractors and having been granted right to recover Octroi by the Gaddani Town Committee.
In support of the above petitions Mr. Muhammad Ashraf Khan Tanoli, learned counsel for the petitioners has vehemently contended that the Notification No.5-182 of 1981 (PLGB) AO-IV, dated 8-4-1982 issued by the Governor of Balochistan in exercise of power under subsection (2) of section 137 of the Balochistan Local Government Ordinance, 1980 (11 of 1980) read with section 70 of the said Ordinance is clear that the ad valorem cost for computing the amount of Octroi on the import of ships, boats and floating structure would include taxes, duties, freight charges and penalties, and therefore, the finding of the learned Division Bench of the High Court is contrary to law. To reinforce the above submission, he has further submitted that as per subsection (4) of section 80-C of the Income Tax Ordinance, 1979, (hereinafter referred to as the Ordinance) where the assessee has no income other than the income referred to in subsection (1) in respect of which tax has been deducted or collected, the same shall be deemed to be the final discharge of his tax liability and, therefore, it is not a normal income- tax. M/s. Tanvir Bashir Ansari, Deputy Attorney-General and Malik Sikandar Khan, Advocate-General, Balochistan supported the above submission.
Whereas Mr. Akhtar Ali Mehmood, learned counsel appearing for respondent Nos. l in CPLA 976 and 978 of 1998 has urged that the income tax is the personal liability of the assessee and is not relatable to the liability of the vessel and therefore, the same cannot be added as a part of the value of the vessel for the purpose of computing ad valorem cost for recovery of Octroi.
It may be advantageous to reproduce the above notification, dated 8-4-1982, which reads as follows:
"NOTIFICATION
No.5-102/1981 (PLGB)AO-IV.---In exercise of the powers conferred by subsection (2) of section 137 of the Balochistan Local Government Ordinance, 1980 (11 of 1980) read with section 70 of the said Ordinance, the Government of Balochistan is pleased to direct that the Town Committee, Gaddani shall impose a tax on the import of ships, boats and floating structure, on the basis of ad valorem, at the rate of Rs.1.50 (Rupee one end paisas fifty) per import of Rs.100 value, under the West Pakistan Town Committees Octroi Rules, 1964, with immediate effect.
2. The Government of Balochistan is further pleased to direct that ad valorem cost shall also include taxes, duties, freight charges and penalties."
There is no doubt that in the above-quoted para.2 of the notification it has been provided that ad valorem cost of the ships, boats and floating structure shall also include taxes, duties freight charges and penalties. The view found favour with the High Court seems to be correct. The word "taxes" used in the above-quoted para. connote the taxes which are relatable to the imported ships, boats and floating structures and not income tax which is the personal liability of the importer. It is also true that in subsection (4) of section 80-C of the Ordinance, it has been provided that "where the assessee has no income other than referred to in subsection (1) in respect of which tax has been deducted or collected, the tax deducted or collected under section 50 shall be deemed to be the final discharge of his tax liability under this Ordinance". The above subsection (4) does not, in fact, support the case of the petitioner on the contrary it indicates that where the assessee has other income in addition to the income of which tax has been deducted under section 50, he will have to be assessed. In other words, the deduction made under section 50 read with section 80-C is to be adjusted against his income-tax liability. In this view of the matter, the above petitions have no merit. Then he submitted that the direction given by the High Court in the judgment referred to in Constitution Petitions Nos. 132 to 135, 147, 149 and 150 of 1998 to the effect that the Octroi Contractor/respondent No.3 to refund the proportionate amount of Octroi charged from the respondent respectively, by adding the amount of advance income-tax is not sustainable. According to him, this relief could have been granted by a Civil Court in a suit and not in a Constitution Petition.
It may be observed that once the High Court came to the conclusion that the certain amount of the Octroi has been illegally recovered in excess of the liability of respondent No. l in the above petitions, the latter was entitled to a consequential relief, which could be the direction in question issued by the High Court. However, in order to avoid any dispute between the parties, we may observe that the proportionate amount refundable in each of the above eight cases will be calculated by Registrar of the High Court of Balochistan after notice to the parties.
With the above observation, leave is refused. In case of any dispute the matter will be placed before the Court.
A.A./Z-20/SLeave refused.