(a) Sales Tax Act (III of 1951)‑‑‑

‑‑‑‑S.5(2)‑‑‑Issuance of notice of recovery of sales tax‑‑‑Authority competent to issue the notice‑‑‑Service structure in the Customs hierarchy after the year 1996, has been changed and Deputy Collector (B‑18) is the competent officer to issue the notice.

(b) Sales Tax Act (III of 1951)‑‑‑

‑‑‑‑S. 28‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Alternate remedy‑‑‑Non‑availing of‑‑‑Recovery notice was issued to the petitioner who assailed the same before High Court in Constitutional jurisdiction‑‑‑Petitioner instead of approaching High Court should have approached the Customs hierarchy and should have challenged jurisdiction of the authority but instead of doing so, the petitioner had directly approached High Court‑‑‑Validity‑‑‑Petitioner having efficacious and alternate remedy available to him under the Customs Act before the Deputy Collector of Sales Tax should have first exhausted the same‑‑‑Constitutional petition was not maintainable in circumstances.

(c) Constitution of Pakistan (1973)‑‑‑

‑‑‑‑Art.199‑‑‑Constitutional petition‑‑‑Interlocutory order‑‑‑Where the case was at interlocutory stage, the same should not be brought to High Court as the same curtailed the remedies available under the law.

Mohtarma Benazir Bhutto v. The State 1999 SCMR 1447 rel.

(d) Sales Tax Act (III of 1951)‑‑‑

‑‑‑‑S. 28‑‑‑Constitution of Pakistan (1973), Art. 199‑‑‑Constitutional petition‑‑‑Recovery of sales tax‑‑‑Issuance of notice by Authorities‑‑‑Effect‑‑ Neither any injustice was caused to the petitioner nor any prejudice was caused from the notice; rather on the contrary, the Authorities were put to inconvenience as tax liable to be recovered from the petitioner had not, been settled as yet‑‑‑Notice issued by the Authorities was not without authority‑‑‑Constitutional petition was dismissed in circumstances.

Ittehad Chemicals v. Islamic Republic of Pakistan PLD 1993 SC 136; Electric Lamp Manufacturers of Pakistan v. Assistant Collector of Central Excise and Land Customs and others 1986 SCMR 604 and Muhammad Baran and others v. Member (Settlement and Rehabilitation), Board of Revenue, Punjab and 2 others PLD 1991 SC 691 ref.

Muhammad Ali Saeed for Petitioner.

K. N. Kohli, Dy. A.‑G. for Respondent.

Date of hearing: 21st May, 2001.

JUDGMENT

AMANULLAH KHAN YASINZAI, J.‑‑‑In this petition the petitioner has assailed the show‑cause notice, dated 6‑1‑2001 issued by the respondent, Deputy Collector Sales Tax, Hub calling upon the petitioner as to why an amount of Rs.1,14,07,941 (Rupees one crore, fourteen Lacs, seven thousand, nine hundred and forty‑one only) may not be recovered from the petitioner being sales tax pertaining to the period from 1‑8‑1987 to 31‑10‑1990.

2. Briefly stated the facts of the case are that petitioners being a Private Public Limited Company having a factory at Hub and is engaged in manufacturing of Liquid Glucose in the name and style of Habib Arcady Ltd. and produce of the petitioner is liable to sales tax. Petitioner received a show‑cause notice on 31‑3‑1991 from the Collector of Customs whereby the petitioner was called upon that they had evaded tax from 1‑8‑1987 to 31‑10‑1990 amounting to Rs.1,14,07,941 and were called upon as to why the said amount alongwith penalty be not recovered from them. Being aggrieved from the said action of the Collector Central Excise, a petition was filed before this Court being C.P. No.434 of 1993 which was dismissed vide judgment, dated 15‑12‑1993. Petitioner still being dissatisfied with the said order tiled a civil petition for leave to appeal before the Hon'ble Supreme Court which was ultimately accepted arid petition was disposed of vide judgment, dated 6‑11‑2000 whereby the impugned notice, dated 31‑3‑1993 was set aside and the Competent Authority was directed to issue result show -cause notice to the petitioner within fifteen days from receipt of the judgment. Thus, after passing of the judgment by the Hon'ble Supreme Court of Pakistan, a fresh show‑cause notice, dated 6‑1‑2001 was issued by the respondent calling upon the petitioner as to why sales tax mentioned in the notice may not be recovered from him alongwith penalty for the period mentioned above. The petitioner being aggrieved from the said notice issued by the respondent has filed the instant petition.

3. Mr. Muhammad Ali Saeed, Advocate of the petitioner contended that the show‑cause notice, dated 6‑1‑2001 was hopelessly barred by time on two‑foldgrounds:‑‑‑

(i). That the Hon'ble Supreme Court vide judgment, dated 6‑11‑2000 gave directions that notice be issued within fifteen days from receipt of the judgment. Under section 28 of the Sales Tax Act, 1951, the notice has been issued beyond the prescribed period; thus, the respondent had no lawful authority to claim the said amount towards sales tax.

(ii) That the matter was pending before the Hon'ble Supreme Court and there was no embargo on the respondent to have initiated the proceeding in the intervening period i.e. from the day when leave to appeal was sought till final decision of the case as observed above.

(2) That the notice was not issued by the competent Authority; only Sales Tax Officer was competent to issue the same.

4. Mr. K.N, Kohli, learned Deputy Attorney‑General opposing the petition contended that notice has been issued within time as directed by the Hon'ble Supreme Court of Pakistan and as far as limitation is concerned, initially the notice was issued by the respondent way back on 31‑3‑1991 and the said matter was stayed by the Hon'ble Supreme Court of Pakistan on 9‑1‑1994 and was pending till final decision i.e. 6‑11‑2000. Thus, the notice is within time. The learned counsel further contended that the impugned notice, dated 6‑1‑2001 was issued by the competent Officer as the same has also been clarified in the notice due to change in the service structure in the Customs Hierarchy. The learned counsel opposed the petition on the ground that efficacious and alternative remedy was available to the petitioner by way of approaching the Customs Authorities and without exhausting the remedy available to the petitioner, they have come to this Court and the High Court has always refused to issue writ in cases where the petitioner has not exhausted the remedy available to him under Customs Laws, which is equally efficacious.

5. Adverting to the arguments of Mr. Muhammad Ali Saeed, the learned counsel argued that the Hon'ble Supreme Court while disposing of the case vide judgment, dated 6‑11‑2000 held in the concluding para. that the competent Authority may issue a fresh notice to the petitioner within fifteen days from receipt of the judgment and shall decide the matter on merits within three months. The learned counsel pointed out that the judgment was passed on 6‑11‑2000 but the impugned notice was issued much after the judgment of the Hon'ble Supreme Court i.e. on 6‑1‑2001; therefore, the impugned notice has been passed in violation of the judgment of the Hon'ble Supreme Court, therefore, the same being barred by time is liable to be set aside. Mr. K.N. Kohli, learned Deputy Attorney‑General opposing the arguments of the learned counsel for the petitioner contended that in para. C" of the ground the reasons for not sending the notice within fifteen days have been explained wherein it is mentioned that Collectorate of Customs, Quetta received copy of the judgment on 30‑11‑2000 and thereafter the judgment was sent to Collectorate at flub from Quetta Office and Balochistan being a remote area due to some administrative difficulties, the office at Hub received copy of the judgment late and as soon as copy of the judgment was received, notice was issued.

6. After hearing the parties, we are not ‑inclined to agree with Mr. Muhammad Ali Saeed. Advocate for the petitioner that notice has been issued in violation of the judgment passed by the Hon'ble Supreme Court of Pakistan. It may be observed that the directions issued by the Hon'ble Supreme Court of Pakistan are directory in nature and not mandatory. Besides, the period of limitation has to be computed as envisaged under section 28 of the Sales Tax Act, 1951. Moreover, the explanation advanced in ground "C" of the parawise comments semis to be plausible. Thus, the arguments of Mr. Muhammad Ali Saeed, Advocate have no substance and the plea regarding limitation is repelled.

Coming to the next contention of Mr. Muhammad Ali Saeed, Advocate that notice‑bas been sent beyond the period of limitation, therefore, claim of the sales tax by the Customs Authority is not maintainable as being barred by time. The learned counsel contended that under section 28, sub -clause (b) of the Sales Tax Act, 1951 notice should have been sent within three years from the end of the year in which assessment was made but the same has been sent after the prescribed period, therefore, the same is hopelessly barred by time; thus, the respondent cannot legally claim the same. The learned counsel further argued that in the impugned show‑cause notice, the petitioner has been asked to deposit sales tax from 1‑8‑1987 up to 30‑10‑1990. Thus, notice for the said year has been sent on 6‑1‑2001, therefore, claim so made is hopelessly barred by time. The learned counsel further argued that since the matter was pending before the Hon'ble Supreme Court but no stay order was granted nor any embargo or restraint was placed on the respondent to take action, therefore, the same being hopelessly barred by time, the impugned notice is liable to be set aside. Mr. K.N. Kohli, learned Deputy Attorney‑General vehemently argued that the proceedings before the Hon'ble Supreme Court were stayed while at the time of admission of the petition on 9‑1‑1994, it was held that the proceedings before the respondent are stayed till decision of the instant petition. It is appropriate to reproduce the order of the Hon'ble Supreme Court wherein the proceedings before the respondent were stayed:‑‑‑

"Mr. Muhammad Ali Syed alongwith Mr. Ejaz Ahmed Khan, ` A.O.R. present.

Heard Proceedings before the respondent are stayed till the decision of the instant C. P. 11 of 1994, dated 9‑1‑1994. However, the C. P. may be fixed at an early date."

Perusal of the above order reveals that stay was granted to the petitioner till disposal of the main petition therefore, in view of order, dated 9‑1‑1994 no proceedings were initiated by the Customs Department; in case any other notice had been issued, that would have amounted to contempt of Court. There is no ambiguity in the order, dated 9‑1‑1994, that proceedings before the respondent were ordered to be stayed. We are not persuaded to agree with the argument of the learned counsel for the petitioner that there was no embargo on the respondent to have issued the show‑cause notice within the intervening period. The order is very much clear and proceedings were stayed by the Hon'ble Supreme Court on the petition of the petitioner, thus, petitioner cannot take the ground that the show‑cause notice is barred by time, rather the same has been issued within time after passing of the order of the Hon'ble Supreme Court. Thus, the objection that the show‑cause notice is barred by limitation is not tenable.

8. Adverting to the next contention that the show‑cause notice has not been issued by the competent authority, Mr. Muhammad Ali Saeed learned counsel for the petitioner contended that in view of Sales Tax Circular No.7 o1981 the competent Authority for issuing the notice was Sales Tax Officer i.e. Assistant Collector of Central Excise and Customs and the Deputy Collector Sales Tax was not competent to issue notice. In support of this argument, the learned counsel relied upon Ittehad Chemicals v. Islamic Republic of Pakistan PLD 1993 SC 136. The learned counsel contended that the provisions as laid down in Circular No.7‑ of 1981 are exclusive. The competent authority i.e. Assistant Collector of Customs could issue the notice and no other authority, therefore, the learned Deputy Collector had no jurisdiction to have issued the notice, thus, the impugned notice has been issued‑without jurisdiction and is null and void and bearing no legal effect. Mr. K.N. Kohli, learned Deputy Attorney‑General argued that the said position has been clarified in the impugned notice itself that due to the change in the service structure of the Customs, the Deputy Collector was the competent Authority to issue the said notice. The learned counsel further pointed out that instead of. approaching the Customs Authorities and clarifying the same as mentioned in the first para. of the impugned notice, the petitioner has approached this Court, therefore, the petition is not maintainable as the petitioner had efficacious and alternative remedy available to him.

9. Mr. Muhammad Ali Saeed, learned counsel laid much stress on the Sales Tax Circular No.7 of 1981 wherein under the said notification power was vested with the Assistant Collector of Customs and Central Excise in the capacity of Sales Tax Officer to have issued the said notice. It would be appropriate to reproduce the Sales Tax Circular No. 7 of 1981 which reads as under:‑‑‑

"SALES TAX CIRCULAR No.7 of 1981

SUBJECT: APPOINTMENT OF OFFICERS UNDER SUBSECTION (2) OF SECTION 5 OF THE SALES TAX ACT, 1951.

In exercise of the powers conferred by subsection (2) of section 5 of the Sales Tax Act, 1951 (III of 1951) and in supersession of Sales Tax Circular No.6 of 1981, dated the 17th May, 1981, the Central Board of Revenue is pleased to appoint the officer specified in column (2) of the table below to exercise the powers of the officers specified in column (3) of that table within their respective area of jurisdiction. "

The contention of Mr. Muhammad Ali Saeed, Advocate has substance that the Assistant Collector of Customs and Central Excise in the capacity of Sales‑Tax Officer was competent to issue the notice but it may be pertinent to mention here that the matter was remanded by the Hon'ble Supreme Court of Pakistan vide judgment, dated 6‑11‑2000 on the ground that previous notice dated 31‑3‑1991 was issued by the Collector Customs who was not competent to do so, thus, in the said judgment the Hon'ble Supreme Court held that the competent Authority is to issue the fresh show‑cause notice. While issuing the impugned notice it has been clarified in para. No.1 as to who is the competent Authority. For convenience sake relevant portion of the same is reproduced hereinbelow:‑‑

"This show‑cause notice is being issued in the light of judgment passed by the Hon'ble Supreme Court of Pakistan in Civil Appeal No. 100 of 1994 filed by. Messrs Habib Arkady Ltd., Hub against judgment, dated 15‑12‑993 passed by learned Division Bench, High Court of Balochistan. The Hon'ble Supreme Court of Pakistan has ordered vide above judgment that competent Authority may issue a fresh show‑cause notice. The competent Authority in this case in terms of Sales Tax Circular 7 of 1981 is Assistant Collector. It is pertinent to mention here that an Assistant Collector, during the period of circular represented Grades‑17 and 18: However, the designations of the officers were changed in 1996 viz. Assistant Collector for Grade‑17 and Deputy Collector for Grade‑18. Hence a Deputy Collector today represents an Assistant Collector of Sales Tax Circular 7 of 1981. "

A bare perusal of the said portion of the impugned notice shows that after 1996, service structure in the Customs hierarchy has been changed and Deputy Collector (B‑18) is the competent Officer to issue the notice. Thus, in view of change, the contention of Mr. Muhammad Ali Saeed, Advocate is devoid of force. Besides, Mr. K.N. Kohli, Advocate argued that since the petitioner received the notice he filed the instant petition instead of approaching the Customs Authorities to clarify the abovesaid position.

10. Mr. Muhammad Ali Saeed, Advocate argued that the said position of law has been settled way back in 1986 in the case Electric Lamp Manufacturers of Pakistan v. Assistant Collector of Central Excise and Land Customs and others 1986 SCMR 604 and the said view was reaffirmed in the case of Ittehad Chemicals (supra). It may be pointed out that in the case of Ittehad Chemicals, petitioners exhausted their remedy first before the Customs Authorities and then after exhausting all the remedies under the Customs Laws, thereafter the matter was agitated before the High Court and the Hon'ble Supreme Court of Pakistan. In the case in hand, soon after receiving the impugned notice, the petitioner has filed the instant petition assailing the impugned notice on the sole ground that the same was issued without any lawful authority. As mentioned hereinabove, in para. No. l of the notice, position regarding change in the service structure was explained that the Deputy Collector is competent to issue the said notice. The contention of Mr. K.N. Kohli, learned Deputy Attorney‑General has force. The petitioner instead of approaching this Court should have approached the Customs hierarchy and should have challenged jurisdiction of the respondent but instead of doing so, the petitioner has directly approached this Court. Thus, we are in agreement with the learned Deputy Attorney‑General that the petitioner had efficacious and alternative remedy and petitioner should have exhausted the said remedy available to him under the Customs Act before the Deputy Collector of Sales Tax. Mr. Muhammad Ali Saeed, learned counsel attempted to argue that even the previous show‑cause notice, dated 31‑3‑1991 issued by the Collector of Customs which was challenged directly before this Court and before the Hon'ble Supreme Court and the same was set aside vide judgment, dated 6‑11‑2000 on the ground that it was without jurisdiction and of no legal effect. We are not inclined to accept the said, argument; in the impugned notice, clarification has been made in the opening para. as pointed out hereinabove and without clarifying the same before the concerned authority, the petitioner has approached this Court, thus, the arguments of Mr. K.N. Kohli, learned Deputy Attorney‑General have substance that the impugned notice is distinguishable from the previous one as clarification has been made. As far as the case of Ittehad Chemicals is concerned, the same is distinguishable and does not apply to the facts of the case in hand. Even in the said case, Ittehad Chemicals after receiving the show‑cause notice approached the Customs Authorities and challenged the jurisdiction of the same and after exhausting all the available remedies, thereafter the High Court was approached but in the case in hand, despite clarification made by the Customs Authorities, the petitioner has approached this Court, thus, the case‑law relied upon is inept and not applicable to the instant case. From the attitude of the petitioner by not approaching the competent Authority and agitating the matter before this Court on mere technicalities, it can be inferred that the petitioner is trying to evade tax in the garb of technicalities. The contention of Mr. K.N. Kohli, learned Deputy Attorney‑General has weight that since the case is at interlocutory stage, therefore, the same should not be brought to the High Court as it curtails the remedies available under the law. In this regard reliance is placed on the case Mohtarma Benazir Bhutto w. The State 1999 SCMR 1447 wherein Hon'ble Mr. Justice Irshad Hasan Khan, Judge as he then was, made the following observations:‑‑‑----

"It is well‑settled that orders at interlocutory stages should not be brought to the higher Courts to obtain fragmentary decision, as it tends to harm the advancement of fair play and justice, curtailing remedies available under the law, even reducing the right of appeal. Refer the case of Mushtaq Hussain Bokhari v. The State 1991 SCMR 2136.

Muhammad ' Afzal Zullah, the then Hon'ble Chief Justice, at page 168 of the report observed as follows:‑‑‑

'It is a wrong or at least misstatement in our state of law, practice, procedures and proceedings in the Courts of law, that wrong orders should be corrected at the time they are passed because it would take less time for the case to conclude. This might have been true half a century to quarter century ago. Thereafter, the challenge to the interlocutory orders has brought about a deluge in the administration of criminal justice. Cases started piling up with the result that the concept of speedy justice came to a grinding halt and powers that may be, started thinking of curtailing remedies even reducing the right of appeals: Cases like the present one do justify such an angry reaction but with a little change of practice in the technical field (for example amendment vis‑a‑vis, the subject in section 197, Cr.P.C.) it is hoped there would be no need to curtail the remedies, as that too in the stage where we are passing, might be counter‑productive'. "

11. It may be pointed out that Mr. Muhammad Ali Saeed, Advocate for the petitioner failed to point out as to what injustice has been caused to the petitioner inasmuch as the learned counsel failed to show as to what prejudice has been caused from the impugned notice, rather on the contrary, the respondent has been put to inconvenience as tax liable to be recovered from the petitioner has not been settled as yet. In this regard reference may be made to Muhammad. Baran and others v. Member (Settlement and Rehabilitation), Board of Revenue, Punjab and 2 others PLD 1991 SC 691 wherein Hon'ble, Mr. Justice Muhammad Afzal Zullah, Chief Justice (as he then was), made the following observations:‑‑‑

"Therefore, before a person can be permitted to invoke this discretionary power of a Court, it must be shown that the order sought to be set aside had occasioned some injustice to the parties. If it does not work any injustice to any party, rather it causes a manifest illegality, then the extraordinary jurisdiction ought not to be allowed to be invoked."

Thus, the argument of Mr. Muhammad Ali Saeed, Advocate that the notice issued by the respondent is without authority is repelled.

12. Consequently as a result of the above discussion, the petition being devoid of merits is dismissed with no order as to costs.

Q.M.H./M.A.K./80/Q Petition dismissed.