R. A. NO.2(IB) OF 2000-2001 VS R. A. NO.2(IB) OF 2000-2001
2001 P T D (Trib) 1848
[Income-tax Appellate Tribunal Pakistan]
Before Karamat Hussain Niazi, Judicial Member and
Mahmood Ahmed Malik, Accountant Member
R. A. No.2(IB) of 2000-2001, decided on 28/11/2000.
(a) Appeal-----
----Right of appeal---Right of appeal which was available at the time of commencement of a "lis" could not be taken away except by express language.
(b) Appeal---
---- Right of appeal---Not an inherent right---Right of appeal is not an inherent right but it must be expressly conferred by a statute or rules having force of law and has to be determined with reference to law prevailing at the time when cause was instituted in the original Court.
(c) Income Tax Ordinance (XXXI of 19779)---
----S.136---Reference---Appeal---Distinction---Reference application could not be pressed on the analogy of right of appeal---Reference could not be equated with right of appeal which was a substantive right.
(d) Income Tax Ordinance (XXXI of 1979)---
----S.136---Reference---Meaning---Reference means referring a matter for seeking advice or decision by a subordinate Court to the superior Court by invoking the advisory jurisdiction of that superior Court.
(e) Income Tax Ordinance (XXXI of 1979)---
----S.136---Reference---Appeal---Distinction---Reference application could be rejected by the Appellate Tribunal, if it was found that no question of law arose from its order---Appeal was a right of entering a superior Court and invoking its aid and interposition to redress the error of the Court below.
(f) Income Tax Ordinance (XXXI of 1979)-----
----S.136---Reference to High Court---- Reference application was filed in the Appellate Tribunal and order was passed on 8-4-2000 on the ground that when the assessment proceedings were initiated in 1987, the assessee had the right to file "Reference to High Court" and that right would remain intact notwithstanding the substitution of the provision into "Appeal to High Court" by Finance Act, 1997---Validity---Substituted provision expressly provided that the same applied to the orders of the Appellate Tribunal passed on or after the 1st July, 2000; before that repealed provision which provided reference to the High Court, from the order of Appellate Tribunal, would be applicable---Assessee could prefer appeal instead of reference application, the order having been passed before the date when the provision of appeal to High Court was in force---Reference application being not maintainable, was rejected by the Tribunal.
Sh. Muhammad Sadiq v. I.A. Khan 1991 MLD 1205; Pakistan International Airlines Corporation v. Pak Saaf Dry Cleaners PLD 1981 SC 553; Idrees Ahmed and others v. Hafiz Fida Ahmed Khan PLD 1985 SC 376 and Hassan and others v. Fancy Foundation PLD 1975 SC
Sikandar Hayat Khan for Applicant.
Muhammad Tahir Khan, D.R. for Respondent.
Date of hearing: 21st November, 2000.
ORDER
KARAMAT HUSSAIN NIAZI (JUDICIAL MEMBER).---Through this application, the applicant assessee requests for the drawing of the statement of the case and to refer the questions of law as framed in para. 4 of the application which arise out of the order of this Tribunal, dated 8-4-2000 made in I.T.As. Nos.296-A(IB) of 1997-98 and 536(IB) of 1997-98 assessment year 1997-98, to the Honourable High Court.
2. Both the learned representatives of the parties have been-heard and the relevant orders perused.
3. The relevant facts leading to this application are that against the order, dated 29-11-1997 passed by the learned CIT(A), both the applicant and the Department filed appeals before this Tribunal. The Tribunal heard the parties and decided the appeals vide its consolidated order dated 8-4-2000. The order of this Tribunal was served upon the applicant on 26-6-2000 as required by subsection (4) of section 135 of the Income Tax Ordinance, 1979 (hereinafter called the Ordinance). In the meanwhile, the provision of section 136 of the Ordinance was substituted by the Finance Ordinance, 2000 which became effective from .1-7-2000. The substituted provisions read as under:--
"136. Reference to High Court.---(1) Within ninety days of the date upon which he is served with notice of an order under section 135, the assessee or the Commissioner may, by application in such form and accompanied by such documents as may be prescribed, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall, within ninety days of the receipt of such application, draw up a statement of the case and refer it to the High Court.
Expl.---For the removal of doubts it is hereby declared that a reference application under this section may be made in respect of a question of lava arising out of an order of the Appellate Tribunal made on or after the first day of July, 2000.
(2) Are not relevant.
(3) Are not relevant.
(4) Are not relevant.
As mentioned hereinabove, the order of this Tribunal was made on 8-4-2000 when the provision of appeal to the High Court existed in the original section 136 of the Ordinance. Therefore, an objection was raised regarding the maintainability of this reference application. On this issue both' the learned representatives of the parties have been heard at length.
4. The learned A.R. has contended that right of appeal is a substantive right which accrues to a person as soon as the litigation begins and such a right is not affected by any change in law unless the amending law gives an indication to that effect either by making an express provision or by necessary intendment. In support of this contention, the learned A.R. has relied upon the cases titled Sh. Muhammad Sadiq v. Mr. I.A. Khan (1991 MLD 1205), Pakistan International Airlines Corporation v. Pak Saaf Dry Cleaners (PLD 1981 SC 553) and Idrees Ahmed and others v. Hafiz Fida Ahmed Khan (PLD 1985 SC 376).
5. It is stated that when the assessment proceedings started in this case somewhere in the year 1987, the provision of section 136 of the Ordinance provided a "Reference to High Court". During the pendency of the proceedings, a substantive change was brought in the above provision which was substituted by the Finance Act, 1997 and the "Appeal to the High Court" was provided. Again by the Finance Ordinance, 2000, the original provision of "Reference to the High Court" was incorporated. It is argued that when the assessment proceedings were initiated in this case, the assessee had the right to file "Reference to the High Court". There ore, it would remain intact, notwithstanding the substitution of this provision by the Finance Act, 1997. It is thus, asserted that the assessee has the right to file reference application notwithstanding the change in the provision of the Ordinance in view of the pronouncements of the superior Courts referred to hereinabove.
6. The first case referred by the learned A.R. titled Sh. M. Sadiq v. I.A. Khan 1991 MLD 1205. The facts of the above case were that second appeal was filed to the High Court under section 15(6) of the Punjab Urban Rent Restriction Ordinance, 1959 against the order, dated 19-6-1990 passed by the Addition District Judge, at Lahore. The respondent objected to the maintainability of appeal on the ground that at the time when the ejectment petition was instituted or the first appeal was filed, there was no provision for filing a second appeal before this Court and as the right was conferred only on 6th of June, 1990 through Punjab Urban Rent Restriction (Amendment) Ordinance (XIII of 1990), therefore, no second appeal could be filed in the present case. All the cases referred hereinabove by the learned A.R. were also considered by the learned Judge of the High Court. In Pakistan International Airlines Corporation v. Pak Saaf Dry Cleaners (PLD 1981 SC 553), it was observed that "all rights of appeal then in force on the commencement of the suit are preserved to the parties concerned till the rest of the career of the suit, and that these rights can be taken away only by a subsequent enactment provided it so provides expressly or by necessary intendment and not otherwise. In Idrees Ahmed and others v. Hafiz Fida Ahmed Khan (PLD 1985 SC 376), the question which came up before the Honourable Supreme Court of Pakistan was as to whether the right of second appeal vesting in the parties under the West Pakistan Urban Rent Restriction Ordinance, 1959 stood destroyed by the repeal of that Ordinance in its application to the Province of Sindh by the promulgation of the Sindh Rented Premises Ordinance, 1979. It was held that:---
"The proposition that all the rights to remedy by way of appeals or otherwise under an enactment stand vested and accrued in the litigating parties on the date of the commencement of the lis, and is, therefore, not open to challenge, unless of course the repealing enactment, either expressly or by necessary implication, curtails such rights in any manner."
In Hassan and others v. Fancy Foundation (PLD 1975 SC 1), the Honourable Supreme Court held:--
"It is well-established principle, that in general, when substantive law is altered during the pendency of an action, the rights of the parties are decided according to the law as it existed when the action was begun, unless the new statute shows a clear intention to vary such rights."
The Honourable Judge considered all the above cases while deciding the case of Sh. Muhammad Sadiq v. Mr. I.A. Khan (1991 MLD 1205), and came to the conclusion that Punjab Urban Rent Restriction (Amendment) Ordinance (XIII of 1990) had no application to those cases where ejectment petition had been instituted before this amending Ordinance was promulgated. Accordingly it was held that appeal was not maintainable.
7. All the cases relied upon by the learned A.R. are not relevant as these relate to "Right of Appeal" which was either provided by the Statute when the "lis" commenced but taken away by subsequent amendment or not provided at all at that time, but through change of law during the pendency of action right of appeal was provided.
8. It is now well-settled principle of law that right of appeal which is available at the time of commencement of a "lis" cannot be taken away except by express language. Right of appeal would survive repeal of law which provided for right of appeal. Right of appeal is not an inherent right but it must be expressly conferred by a statute or rules having force of law and has to be determined with reference to law as prevailing at the time when cause was instituted in original Court. Applying the above principle, we find that when the assessment proceedings were initiated in the present case, there was no right of appeal provided to the assessee under the Ordinance. At that time the Ordinance provided a reference to the High Court against the decision of the ITAT. The amendment was made through Finance Act, 1997 which remained in force till 30th June, 2000. In these circumstances, the applicant could not press for the filing of the reference application on the analogy of right of appeal. A reference cannot be equated with right of appeal which is a substantive right as in legal parlance. "Reference" means referring a matter for seeking advice or decision by a subordinate Court to the superior Court by invoking the advisory jurisdiction of that superior Court. The Ordinance provides a I~ reference to the High Court on a question of law, for invoking its advisory jurisdiction. If the Tribunal finds that no question of law arises from its order, it can reject the reference application under section 136 of the Ordinance. An "Appeal" is a right of entering a superior Court and invoking its aid and interposition to redress the error of the Court below. The Ordinance before its amendment by Finance Ordinance, 2000; provides direct appeal against the order of ITAT, on a question of law to the High Court by invoking the Appellate Jurisdiction of the High Court. Thus, the procedure to pursue the remedy by any of "Appeal and Reference" is altogether different.
10. At the cost of repetition, we may like to trace the history of amendments brought in the provisions of section 136 at different times. When the Ordinance was promulgated in 1979, section 136 provided "Reference to High Court". This section was substituted in 1997 by the, Finance Act, 1997 and "Reference to High Court" was converted into the "Appeal to High Court". By the Finance Ordinance, 2000 this section was substituted and "Appeal to High Court" was again converted into "Reference to High Court". The Explanation has also been added to section 136 (reproduced hereinabove), wherein it is clarified for the removal of doubts that a reference application under this section may -be made in respect of a question of law arising out of an order of the Appellate Tribunal made on or after first day of July, 2000. We may like to mention here that the right to agitate the matter before the Honourable High Court on a question of law which arises from the order of the ITAT has not been taken away or extinguished but only the procedure has been changed in respect of pursuing the remedy. In the present case, to take up the issue on a question of law before the Honourable High Court by way of reference is originally provided. However, by amendment the remedy was converted into "Appeal to High Court" on a question of law rising from the order of ITAT. Thus, the right to agitate a question of law before the High Court was not taken away father a simple and non-complicated procedure by way of direct "Appeal" was provided through amendment by Finance Act, 1997. The substituted provision of the Finance Ordinance, 2000, expressly provides that this provision applies to the orders of the Appellate Tribunal passed on or after the 1st July, 2000. Before that the repealed provision which provided Appeal to High Court, from the order of ITAT, would be applicable. As the order of the Tribunal was passed before that date when the provision of appeal to the High Court was in force. Hence, the assessee should have preferred appeal instead of this reference application.
11. As a result of what has been discussed above, the reference application is not maintainable and the same is rejected.
C.M.A./M.A.K./69/Tax(Trib.) ??????????????????????????????????????????????????????????? Reference rejected.