CHAIRMAN, CENTRAL BOARD OF REVENUE, ISLAMABAD VS MESSRS PAK?SAUDI FERTILIZER LTD., 2000 PTD-SUPREME-COURT 3748 (2000)

(On appeal from the order, dated 5-7-1979 of High Court of Sindh in Petition No.283 of 1999).

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

----Ss.53.& 87---Constitution of Pakistan (1973), Art. 185(3)---Advance payment of income-tax---Failure to pay---Issuance of demand notice under S.87, Income Tax Ordinance, 1979 for recovery of advance income-tax-- Validity---Assessing Officer not being authorised by law; could not effect recovery of advance income-tax in case of failure to pay the same on time under S.53 of -Income Tax Ordinance, 1979---High Court had rightly declared the demand notice to be without jurisdiction and unlawful---Leave to appeal was refused by Supreme Court.

(b) Constitution of Pakistan (1973)---

---Art.199---Constitutional petition---Maintainability---Alternate adequate remedy, non-availing of---Orders passed without jurisdiction---Where order passed by the Authority was without jurisdiction and unlawful there would be no bar to the filing of Constitutional petition under Art.199 of the Constitution.

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

---Ss.53 & 129---Failure to pay advance income-tax---Appeal-- Maintainability---Assessee instead of filing appeal under S.129 of Income Tax Ordinance, 1979 filed Constitutional petition against the demand notice for the recovery of tax---Validity---Appeal would lie only against the order passed under the provision of law mentioned in S.129 of Income Tax Ordinance, 1979---Section 53 of Income Tax Ordinance, 1979, . having not been mentioned in S.129 of the Ordinance, appeal was not competent.

(d) Appeal-

---- Right of appeal is a creature of statute and there can be no right of appeal unless the statute conferred the same.

M. Farid, Advocate and S. M. Abbas, Advocate-on-Record for Petitioners.

Athar Saeed, Advocate Supreme Court alongwith A.S.K. Ghori, Advocate-on-Record for Respondents.

Date of hearing: 24th August, 2000.

ORDER

HAMID ALI MIRZA, J.---This civil petition for leave to appeal is directed against the order, dated 5-7-1999 passed by a learned Division Bench of High Court of Sindh, whereby Petition No.282 of 1999 (Pak-Saudi Fertilizers Ltd. v. Federation of Pakistan and 4 others) was allowed, thereby the impugned order passed under section 53(1) of the Income Tax Ordinance, 1979 (hereinafter called the Ordinance, 1979) by petitioner No.4 was set aside.

2. The brief facts of the case, as stated, are that respondent No. 1 was liable to pay advance income-tax under section 53 of the Ordinance in four instalments viz. (i) on 7th October, 1998, (ii) 7th January, 1999, (iii) on 7th April, 1999 and (iv) on 21st June, 1999 of the financial year ending 30th June, 1999, which the respondent is alleged to have failed to - pay, consequently impugned order under section 53(1) of the Ordinance, 1979 was passed by petitioner No.4 that first and second instalments be paid by respondent who challenged the said order through a Constitutional Petition No.282 of 1999 before Sindh High Court, which petition was allowed and the impugned order was- decide to be without jurisdiction and unlawful, therefore, this petition for leave to appeal.

3. We have heard the learned counsel for the parties and perused the record.

4. The learned counsel for the petitioners has submitted that the learned Division Bench of the High Court has erred in holding (i) that the order passed under section 53 of the Ordinance, 1979 by petitioner No.4 was unlawful and without jurisdiction and (ii) that the Constitutional petition under Article 199 of the Constitution, in the circumstances, was maintainable in law.

5. Section 53(1) of Income Tax Ordinance, 1979 (hereinafter referred to as Ordinance, 1979) reads as follows:---

"53. Advance payment of tax.---(1) An Assessee---

(a) other than a company or a registered firm, whose total income

(excluding income to which section 27, section 80-B, section 80-C, section 80-CC 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 not less than one hundred and fifty thousand rupees shall be liable to pay by way of advance tax to the credit of the Federal Government, on or before the seventh day. of October, the seventh day of January, the seventh day of April and twenty-first 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; and

(b) being a company or a registered firm shall, in respect of its income (excluding income to which section 27, section 80C, or section 80CC applies) be liable to pay by way of advance tax an amount which bears the same proportion to the company's or a registered firm's turnover for that year as the tax assessed, bears to the turnover assessed, for the latest assessment year in respect of which the tax payable by the company or registered firm has been determined under section 59, 59A, 60, 62, 63 or 65. as reduced by the tax already paid under section 50 other than the tax attributable to income covered by sections 80C and 80CC in the said financial year. "

6. Section 53 of the Ordinance, 1979 lays down that advance income- tax is to be paid by the assessee and the amount so collected is to be adjusted against the final demand when regular assessment is made. There is nothing in section 53 'of the Ordinance, 1979 where under the Assessing Officer/Deputy Commissioner of Income-tax has any authority to frame assessment under section 53 of the said Ordinance and to insist upon demand of advance income-tax in case advance income-tax is not paid by assessee on time, hence non-payment of it has been made liable to the imposition of additional tax under section 87 of the Ordinance, 1979 therefore non compliance of impugned order of demand of advance income-tax cannot be recovered under sections 92 and 93 of the Ordinance, 1979. No provision of law has been pointed out by the learned counsel for the petitioners that before the time of regular assessment, the Assessing Officer/ Deputy Commissioner of Income-tax has any authority under section 53 of the Ordinance, 1979 to insist upon the demand of advance income-tax in case the same is not paid on time. Section 87, of Ordinance, 1979 reads as follows:---

"87. Charge of additional tax for failure to pay advance tax.---

(1) Where an assessee who was required to pay tax, under sub section (1) of section 53---

(a) fails to pay any instalment; or

(b) fails to pay any instalment on or

(c) fails to pay the full amount payable by him,

he shall, without prejudice to any other liability which he may incur under this Ordinance, be liable to pay additional tax at the rate of twenty-four percent. per annum on the amount not paid, and such additional tax shall be calculated from the date on which -such amount was payable to the date on which it paid or the thirtieth day of September of the financial year next following, whichever is the earlier

(2) Where to respect of any year, any assessee fails to pay tax under subsection (4) of section 53 or the tax so paid is less than eighty percent of the tax chargeable for the relevant assessment year, he shall be liable to pay additional tax at the rate of twenty-four percent. Per annum on the amount of tax so chargeable or the amount by which the tax paid by him falls short of the said eighty per cent as the case may be and such additional tax shall be calculated from the first day of April in that year. to the date on which assessment is made or the thirtieth day of June of the financial year next following . whichever is the earlier."

In view of the aforesaid reasoning and the provisions of law, the Assessing Officer/Deputy Commissioner Income-tax not being authorized by law cannot effect recovery of advance tax in case of failure to pay the same on time under section 53, consequently the impugned demand notice was rightly declared by the learned Division Bench of the High Court to be without jurisdiction and unlawful. In the circumstances, we find no substance in the contention of the learned counsel for the petitioners.

7. The next contention of the learned counsel for the petitioner is that petition under Article 199 of the Constitution was trot maintainable as alternate adequate remedy of filing an appeal under section 129 of the Ordinance, 1979 against the impugned order was available to the respondent. Admittedly, the impugned order of demand was without jurisdiction and unlawful, consequently there would be no bar to the filing of Constitutional petition under Article 199 of the Constitution of Islamic Republic of Pakistan considering also that section 53 of said Ordinance is not mentioned in section 129 of the said Ordinance as appeal would lie only against the order passed under the provision of law mentioned in section 129 of Ordinance, of 1979. Section 129 of the said Ordinance reads as follows:---

"129. Appeal to the Appellate Additional Commissioner. ---(I) Any assessee objecting to an order made by Deputy Commissioner under section 59 or 59-A (where any adjustment has been made under subsection (3) or subsection (2) respectively of those sections), 62, 63, 65, 68, 75, 80, 80A, 91, 98, 99, 105 to 112 (inclusive), 114 or subsection (2) of section 148 or an order under section 52 treating the assessee as an agent of a non-resident, or an order under section 156 refusing to rectify the mistake, either in full or in part, as claimed by the assessee or having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee may appeal to the Appellate Additional Commissioner against such order.

(2) No appeal under subsection (1) shall lie against any order of assessment unless the tax payable under section 54 has been paid."

The right of appeal is a creature of statute and there can be no right of appeal unless the statute confers it. Perusal of section 129 of Ordinance, 1979 would show that the Legislature has purposely not mentioned section 53 of the Ordinance, 1979 in respect of payment of advance income tax so as not to make it appeal able, considering that non-payment of the advance income-tax was to be subsequently dealt-with under section 87 of the Ordinance, 1979, which order if passed would have the effect of enhancement or increase of liability of the assessee/the respondent. The instant case is not even of the charge of additional tax for failure to pay advance income-tax under section 87 of the Ordinance so as to treat the impugned order to be one of increase or enhancement of the liability of the assessee or part of process of assessment. In the circumstances, we are of the view that the petition under Article 199 of the Constitution was maintainable and the learned members of Division Bench of Sindh High Court rightly held so.

8. In view of the facts, circumstances and reasoning stated above, we find no merit in the contentions of the learned counsel for the petitioner, consequently leave to appeal is refused and the petition is dismissed.

Q.M.A./M.A.K./C-21/S, - Petition dismissed.