(a) Arbitration Act (X of 1940)---

----Ss. 8 & 20---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Maintainability---Contractual liability---Arbitration clause being present in the agreement, Constitutional petition was not maintainable.

1994 SCMR 1484; 1990 CLC 1639 and Project Director, Balochistan Mineral Irrigation's case 1999 SCMR 121 rel.

(b) Arbitration Act (X of 1940)---

----Ss. 8 & 20---Constitution of Pakistan (1973), Art. 199---Constitutional petition---Maintainability---Contractual liability---Arbitration clause in agreement---Principle of approbate and reprobate---Applicability---Where petitioners voluntarily executed an agreement having an arbitration clause, petitioners were estopped to challenge the same in Constitutional jurisdiction on the principle of approbate and reprobate---Contractual obligations would not be enforced through Constitutional petition---Petitioners having alternate remedies of civil suit Constitutional petition was not maintainable.

Haji Ghulam Rasool's case PLD 1971 SC 376; Shameer's case PLD 1981 SC 604; Pakistan Mineral Development Corporation's case PLD 1986 Quetta 181;PLD 1958 SC 387 and PLD 1962 SC 108 rel.

(c) Constitution of Pakistan (1973)---

----Art. 185 (3)---Grant of leave to appeal by Supreme Court is not a judgment and does not lay down a rule of law to be followed, like a judgment of the Supreme Court deciding finally any matter.

Khair Ullah's case 1997 SCMR 906 fol.

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

----S. 50(7-A)---Constitution of Pakistan (1973), Arts. 199 & 270-A-- Constitutional petition---Advance income-tax, payment of ---Vires of Income Tax Ordinance, 1979, S.50(7-A)---Provision of S.50(7-A), Income Tax Ordinance, 1979 being protected and validated by virtue of Art.270-A of Constitution of Pakistan (1973) was a valid piece of legislation.

Miss Benzair Bhutto's case PLD 1988 SC 416 and Ghulam Mustafa Khar's case PLD 1989 SC 26 fol.

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

----Art. 199---Income Tax Ordinance (XXXI of 1979), S.50(7-A)-- Constitutional petition---Advance income-tax, payment of---Lease agreement for the collection of octroi was made by the petitioner/contractor with the respondent/Committee having arbitration clause in it---Where more than one remedies were available to the petitioner/contractor,. Constitutional petition was not maintainable---High Court had advised the petitioner/contractor to avail the remedy of arbitration or agitate the matter before Appellate forum-- Petition was disposed of accordingly.

PLD 1992 Lah. 68; PLD 1969 Lah. 633; PLD 1987 Lah. 262; PLD 1983 Lah. 47; 1978 SCMR 367; 1982 CLC 1477; Muhammad YounisKhilji's case 1998 'SCMR 1058; Bismillah & Company's case 1997 PTD 74'7; 1998 PTD 2557 Rehman Corporation's case 1985 PTD 787: Trustees of the Port of Karachi's case 1989 PTD 1048; 1995 PTD 493: Muhammad Younis's case PLD 1984 Lah. 345 and 1997 PTD 70 rel.

(f) Judgment---

---- Grant of leave to appeal by Supreme Court is not a judgment, since it does not lay down a law to be framed like a judgment of the Supreme Court deciding finally any matter.

Khair Ullah's case 1997 SCMR 906 fol.

Mian Arshad Latif and Khalid Alvi for Petitioners.

Ch. Sagheer Ahmad, Standing Counsel for Respondents Nos. 3 to 5.

Khadim Nadeem Malik, Addl. A.-G.

Date of hearing: 22nd February, 1999.

JUDGMENT

I intend to decide the Writ Petition No.2789 alongwith the following writ petitions having similar facts and law:--

425 of 1998, 11947 of 1998, 922 of 1998, 14 of 1999, 228 of 1999, 189 of 1998, 388 of 1998, 187 of 1998, 188 of 1998, 1131 of 1998, 900 of 1998, 655 of 1998, 1158 of 1998, 578 of 1998, 2157 of 1998, 2277 of 1998, 237.5 of 1998, 2270 of 1998, 2376 of 1998, 2637 of 1998, 11040 of 1998 10578 of 1998 and 3085 of 1998.

The brief facts out of which the aforesaid writ petitions arise are that the petitioners took part in an open auction held by Administrator concerned Committee for the collection of tax. Petitioners being highest bidders were declared successful and as such they were given lease for the year 1997/98. Petitioners executed agreements with the respondents with certain conditions. Petitioners were asked to deposit an amount equal to 5 % of their aforesaid offers with each instalments as income-tax.

2. Mr. Khalid Alvi, Advocate, learned counsel for the petitioner, contended that the lease money being not income as such 5 % advance tax as envisaged under subsection (7-A) of section 50 of the Income Tax Ordinance, 1979 cannot be claimed from the petitioners. In support of his contention learned counsel has placed reliance upon an interim order passed by the Honourable Supreme Court on 25-6-1997 in similar circumstances in Civil Petitions Nos.641 to 647 of 1997. Learned counsel for the petitioner contended that section 50(7-A) of 1979 was added through an Ordinance on 25-6-1981 when the Article 89 was held in abeyance by virtue of Article 2 of P.C.O. 1981 which was promulgated on 24-3-1981. Therefore, the said section of the Income Tax Ordinance, 1979 is ultra vires of the Constitution. He further urged that explanation of subsection (7-A) of section 50 of the Income Tax Ordinance, -1979 excluded petitioners. He further urged that the collection was being done by .the respondents Local Councils and said collection could be called the income of the respondents and not the petitioners. Resultantly, at the end of the each month, the petitioners were required to make payment of instalment, towards the clearance of the agreed amount. Therefore, the same cannot be. called the income of the petitioners. He further urged that the permanent changes cannot be brought in an enactment through an Ordinance which in its nature is temporary legislative measure He further urged that income-tax can be levied only on the income-tax, without conceding even mere collection of income-tax, duty octroi which is on behalf of the respondents under an implied relationship of agency, can never be given rise to the liability of the petitioners to pay the advance income-tax. The action of the respondents is against the Articles of the Islamic Republic of Pakistan i.e. 4, 18, 24 and 25. The word property is not defined in the aforesaid explanation of sub section (7-A) of section 50 of the Income Tax Ordinance. Therefore, meaning assigned to the property in the aforesaid impugned explanation is not justified in the eyes -of law. He further urged that word "any person" mentioned in the aforesaid section does not cover contractors. The action of the respondents is against the provisions of sections 15, 22, 23, 30 and 31 of the Income Tax Ordinance.

3. Learned Standing Counsel appeared on behalf of the respondents raised preliminary objections. He contended that petitioners executed contracts/agreements with the respondents of their own free will and this Court has no jurisdiction to enforce the contracts while exercising power under Article 199 of the Constitution. He relied upon the following judgments:

(i) PLD 1992 Lah. 68 (ii) PLD 1969 Lah. 633 (iii) PLD 1987 Lah. 262.

He further states that petitioners took part in the auction proceedings and thereafter executed the agreements with certain conditions with the respondents. Therefore, the petitioners at this belated stage cannot resile from the agreements executed by the petitioners with the respondents on the well known principle of estoppel. He relied upon the following judgment.

(i) PLD 1983 Lah. 47 (ii) 1978 SCMR 367 (iii) 1982 CLC 1477.

He further urged that due to conduct of the petitioners they are stopped to file the writ petitions. He relied upon Muhammad Younis Khilji's case 1998 SCMR 1058. He finally summed up his arguments that similar controversy has been finally decided by this Court in the following judgments:--

(i) Bismillah & Company's case 1997 PTD 747 and

(ii) 1998 PTD 2557.

He further stated that leave granting order is not judgment as the controversy between the parties has not been finally decided by the Honourable Supreme Court. He relied upon PLJ 1975 SC 21. He further distinguished the cases in which the Honourable Supreme Court has granted leave. In the schedule 3 % tax was imposed but, subsequently, through the amendment it was increased from 3 % to 5 % in those cases the principle of retrospective is involved. Therefore, the leave granting order of the Honourable Supreme Court is distinguished on facts.

4. Learned Additional Advocate-General contended that the contention of the learned counsel for the petitioners are not sustainable in the eyes of law as the petitioners have alternative remedies to agitate the arbitration clause of the aforesaid agreements.

5. Learned Legal Advisor of the concerned Administrator Committees and learned A.A.-G. adopted the arguments of the learned Standing Counsel.

6. Learned counsel for the petitioner in rebuttal contended that contracts were executed by the petitioners with the respondents under undue influence. Therefore, the same is hit by section 16 of the Contract Act. He further stated that contracts executed between the parties is also hit by section 23 of the Contract Act. There is no estoppel against law. Petitioners have no alternative remedies against the income tax deduction. He summed up his arguments that the action of the respondents is not in accordance with the provisions of the Income Tax Ordinance, 1979.

7. I have given my anxious consideration to the contentions of the learned counsel for the parties. It is admitted fact that agreements were executed between the parties on different dates having similar clause which expressly discloses that in case of any dispute between the parties, the Commissioner/ Deputy Commissioner shall be sole Arbitrator. It is better and appropriate to reproduce the relevant clauses of the aforesaid agreement to resolve the controversy arising in the present writ petition:---

In view of the above said arbitration clauses of the agreement, the writ petition is not maintainable as the principle laid down by the Honourable Supreme Court in following judgments:

(ii) 1990 CLC 1639

(iii) Project Director, Balochistan Mineral Irrigation's case 1999 SCMR 121

It is settled proposition of law that specific arbitration clause has been provided in the agreement as mentioned above and if the petitioners have got any grievance against the contents of the said agreements they can avail their remedies before the appropriate forum as it needs a detail inquiry. Since the petitioners have voluntarily executed an agreement with arbitration clause with the respondents then the petitioners are stopped to challenge the same in writ jurisdiction on well known principle of approbate and reprobate as the principle laid down by the Honourble Supreme Court in Haji Ghulam Rasool's case PLD 1971 SC 376. It is settled principle of law that contractual obligations cannot be enforced through a writ petition as the petitioners have alternative remedies to invoke the jurisdiction of Civil Court by means of regular suit. I am fortified by the following judgments of Honourable Supreme Court of Pakistan:--

(i) Shameer's case PLD 1981 SC 604;

(ii) Pakistan Mineral Development Corporation's case PLD 1986 Quetta 181.

(iii) PLD 1958 SC 387 and PLD 1962 SC 108.

In the presence of the arbitration clause coupled with the fact that through this writ petition, the petitioners wants enforcement of the agreement executed between the petitioners and the respondents. Therefore, the writ petition is not maintainable. It is pertinent to mention here that the similar controversy has already been decided by this Court in Writ Petition No.9383 of 1997 `which was decided by my learned brother Ghulam Mehmood Quraishi, J. The aggrieved party i.e. Contractors filed I.C.A. No.36 of 1998 which was decided by the D.B. consisting of my learned brothers Tanvir Ahmad Khan, J. and Muhammad Nawaz Abbasi, J. and approved the above judgment. The Contractors filed petition before the Honourable Supreme Court which was also dismissed, as stated by the learned legal advisor of Khanewal Municipal Committee.

The present controversy has also been finally decided after examining all the relevant provisions of Income Tax Ordinance, 1979 and dismissed the writ petitions in the following judgments:--

"(i) 1997 PTD 747 and (ii) 1998 PTD 2557

It is pertinent to mention here that Bismillah and Company's case 1997 PTD 747 was considered and approved by the Division Bench of this Court consisting of my learned brother Ihsan-ul-Haq Chaudhry, J. and Najam-ul-Hassan Kazmi, J. in Writ Petition No. 16358 of 1997. My learned brother Malik Muhammad Qayyum, J. in Bismillah and Companies case 1997 PTD 747 at 749 considered the contention of the petitioners and observed as follows:-)-

"Explanation being clear and explicit does not leave any room for doubt that so far as section 50(7-A) is concerned, the sale of property would include lease for collection of octroi duties, tolls, fees and other levies."

I am also fortified by the following judgments:--

(i) Rehman Corporations' case 1985 PTD 787,

(ii) Trustees of the Port of Karachi's case 1989 PTD 1048,

(iii) 1995 PTD 493,

(iv) Muhammad Younis's case PLD 1984 Lah. 345,

(v) 1997 PTD 70.

It is settled proposition of law that leave granting order by the' Honourable Supreme Court is not judgment. I am fortified by the judgment of the Honourable Supreme Court in Khairullah's case 1997 SCMR 906 and the relevant observation is as follows:--

"Order simply granting leave to appeal, does not lay down a rule of law to be followed, like a judgment of this Court deciding finally any matter. "

The contention of learned counsel for the petitioner that section 50 (section 7-A) is ultra vires of the Constitution has no force. The law framed in question was protected and validated by virtue of Article 270-A of the Constitution. I am fortified by the judgment of Honourable Supreme Court in Mrs. Benazir Bhutto's case PLD 1988 SC 416 and Ghulam Mustafa Khar's case PLD 1989 SC 26.

In view of what has been discussed above, the petitioners have alternative remedies more than one. Therefore, these writ petitions are not maintainable. The petitioners if so advised shall agitate the matter before the appellate forum or avail the arbitration clause. These writ petitions are not maintainable and the same are disposed of in the aforesaid terms.

Q.M.H./M.A.K./M-1069/LPetitions disposed of.