(a) Income-tax---

-----Central Board of Revenue---Competence to issue circulars---Judicial or quasi judicial powers of Assessing Officer---Central Board of Revenue had no jurisdiction to issue any circular of the nature which would affect the judicial or quasi judicial exercise of power by Income-tax Authorities.

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

----Ss. 53 [as amended by Finance Act (III of 1998)] & 50---Constitution of Pakistan (1973), Art. 199---Constitutional petition ---Maintainability-- Advance payment of tax---Deduction of tax at source ---Adjustment-- Assessing Officer had not allowed adjustment of tax deducted under S.50 of the Income Tax Ordinance, 1979 during the financial year while computing advance tax payable by the assessee under S.50, Income- Tax Ordinance, 1979---Fate of the case turned upon interpretation of S.53(b) of the Income Tax Ordinance, 1979 and dispute could very well be decided by the High Court in exercise of its Constitutional jurisdiction without insisting that assessee should follow the remedies provided by Income Tax Ordinance,

Collector of Customs, Customs House, Lahore and others v. Messrs

S. M. Ahmad & Company (Pvt.) Ltd., Islamabad 1999 SCMR 138 rel.

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

----Ss. 53 [as amended by Finance Act (III of 1998)] & 50---Constitution of Pakistan (1973), Art. 199---C.B,R. Circular No. 13 of 1997, dated 29-9-1997---Advance payment of tax---Deduction of tax at source during financial year---Adjustment---Assessing Officer had not allowed adjustment of tax deducted under S.50, Income Tax Ordinance, 1979 during the financial year while computing advance tax payable by the assessee under S.53, Income Tax Ordinance, 1979---Assessee contended that before amendment in S.53 by Finance, Act, 1998, law was clear and explicitly provided that while determining advance payment of tax, allowance must be given for the tax already paid under S.50, Income-Tax Ordinance, 1979 in the financial year---Validity---Order of the Assessing Officer was declared to be without lawful authority and of no legal effect by the High Court to the extent same disallowed the assessee to deduct the tax paid under S.50, Income Tax Ordinance, 1979 while computing the payment of advance tax payable under S.53, Income Tax Ordinance, 1979.

K. G. Old, Principal, Christian, Technical Training Centre, Gujranwala v. Presiding Officer, Punjab Labour Court Northern Zone and others PLD 1976 Lah. 1097 rel.

Zahid Hamid for Petitioner.

Muhammad Ilyas Khan for Respondents.

Date of hearing: 9th February, 2000.

JUDGMENT

This petition under Article 199 of the Constitution of Islamic Republic of PL-Stan, 1973 calls in question the order passed by the Deputy Commissioner of Income tax on 25-4-1998, whereby while computing the advance tax payable, the petitioner was not given allowance for the tax already paid under section 50 during the financial year.

2. This dispute had earlier come to this Court in the form of W. P. No.1882 of 1998 in which the petitioner had challenged the circular issued by the Central Board of Revenue whereby it had been directed that no allowance shall be given for the tax already paid under section 50 while computing advance payment of tax under section 53 of the Income Tax Ordinance, 1979. This Court came to the conclusion that the Central Board of Revenue has no jurisdiction to issue any circular of the nature which would affect the judicial or quasi judicial exercise of power by the Income tax Authorities. Accordingly, Circular 13 of 1997 was declared to be without lawful authority and it was directed that the Income Tax Authorities shall decide the matter pending before them irrespective of the circular after applying their mind to the law applicable and the facts of each case. It is a matter of great regret that while passing the impugned order, this aspect of the case has not been adverted to by the Deputy Commissioner of Income Tax who assumed without any discussion that the tax paid under section 50 was not to be excluded while computing advance payment of tax under section 53 of the Income Tax Ordinance.

3. The learned counsel for the petitioner has contended that section 53(b) of the Income Tax Ordinance is clear and explicitly provides that while determining advance payment of tax allowance must be given for the tax already paid under section 50 in a financial year. It is also pointed out by Mr. Zahid Hamid, Advocate that subsequently the legislature itself had amended section 53 of the Income Tax Ordinance, 1979 by Finance Act, 1998, so as to bring about the change in law and achieve the result that the tax already paid under section 50 be not to be deducted. However, this amendment is not retrospective in nature and, therefore, would not cover the case in hand.

4. There is considerable merit in the contention of the learned counsel for the petitioner. Section 53 of the Income Tax Ordinance, 1979, as it stood at the relevant time, reads as under:---

Advance, payment of tax.---(1) Where the total income of any assessee (excluding income is which section 27 (or section 808 or section 80C (or section 80CC)) or (subsections (1) and (2)) of section 50 applies) for the latest assessment year in respect of which the tax payable by him has been determined under sections 59, (59-A, 60) 62, 63, or 65 (is in the case of a company not less than (fifty) thousand rupees and in other cases not less than (one hundred and fifty thousand rupees), he shall pay, by way of advance tax, to the credit of the Federal Government on or before the fifteenth day of September, the fifteenth day of December, the fifteenth day of March and the fifteenth day of June in each financial year an amount equal to one-fourth of the full amount of income tax and super tax) so determined to be payable in respect of that assessment year (without making any adjustment for any tax already paid by way of advance tax or otherwise) as reduced by the tax, if any, already collected or deducted and paid under section 50 in the said financial year.

(IA) ..................................................

(2) ..................................................

(3) ...

Unfortunately, the Deputy Commissioner of Income Tax has failed to give effect to the words "as reduced by the tax already paid under section 50 in the said financial year". As already pointed out, it has been assumed without any discussion by the Deputy Commissioner of Income Tax that while computing the tax deduction mode under section 50(2) are not to be excluded. This approach is fallacious and is contrary to the clear language of section 53(b) of the Ordinance. .

5. It is well-settled that if the amendment is made in law, generally speaking the intention of the legislature is to bring about a change in law. If any authority is needed, reference may be made to K. G. Old, Principal, Christian, Technical Training Center, Gujranwala v. Presiding Officer, Punjab Labour Court Northern Zone and others PLD 1976 Lah. 1097. Therefore, the fact that the law has been amended subsequently clearly supports the contention that the law as it existed at the relevant time provided that while computing advance payment of tax, the deduction made under section 50 of the Income Tax Ordinance has to be excluded.

6. Mr. Muhammad Ilyas Khan, learned counsel for the respondents has contended that this petition is not maintainable as the petitioner had failed to avail of alternative remedies available to it under the Income Tax Ordinance by filing appeal and revision.

7. I am not impressed by this contention of the learned counsel. The fate of this case turns upon the interpretation of section 53(b) of the Income Tax Ordinance, 1979 and the said dispute can very well be decided by this Court in the exercise of its Constitutional jurisdiction without insisting that the petitioner should follow the remedies provided by the Income Tax Ordinance, 1979. Furthermore, it appears that the Deputy Commissioner of Income Tax was influenced by Circular No.13 of 1997 issued by the Central Board of Revenue which had been declared -as without lawful authority by this Court. The cases cited by the learned counsel for the petitioner, namely Collector of Customs, Customs House, Lahore and others v. M/s S. M. Ahmad & Company (Pvt.) Ltd. Islamabad (1999 SCMR 138) supports this proposition.

In view of what has been said above, this petition is allowed, the impugned order of the Deputy Commissioner of Income Tax to the extent it disallowed the petitioner to deduct the tax paid by it under section 50 of the Income Tax Ordinance, 1979 while computing the payment of advance tax payable under section 53, is declared to be without any lawful authority and of no legal effect.

No order as to costs.

C.M.A./M.A.K./B-8/L Petition allowed.