MUHAMMAD NASEEM KHAN C/O AIR TRAVEL CONCEPT (P) LTD., LAHORE VS FEDERATION OF PAKISTAN, 2002 PTD-LAHORE-HIGH-COURT-LAHORE 2830 (2002)

Wealth Tax Act (XV of 1963)---

----Ss. 3, 35 & Second Sched., Cl. (7)---Constitution of Pakistan (1973), Art. 199---Constitutiolial petition---Wealth tax, imposition of ---Assets created by foreign remittances---Claim of exemption---Rectification of mistake ---Scope---Assessee was granted exemption for year 1991-92, but not for wears 1992-96, though such exemption was available to him up to year 1995-96---Rectification of such error sought by assessee was reused on the ground that the matter was to be considered by appellate forum and was beyond the purview of S. 35 of the Wealth Tax Act, 1963---Validity---Such remittances were exempt from wealth tax not only in the year-they were received, but also in the following five years---No reason had been stated for disallowing claimed exemption for subsequent, years---Impugned order was suffering from error apparent on the face of record---High Court accepted Constitutional petition and set aside impugned order, resultantly application for rectification would be deemed to be pending before the Authority to be decided in accordance with law.

Malik Tabasam Maqsood Khan for Petitioner.

Nemo for Respondents.

Date of hearing: 22nd May, 2002.

JUDGMENT

The petitioner, a wealth tax assessee, declared some assets created from the foreign remittances brought into Pakistan during the assessment year 1990-91. According to writ petition the exemption on the said assets was to continue for five years. The assessee also filed his return for the later assessment years up to 1995-96. The assessments were finalized by the respondent No.2 who allowed exemption on the assessment for the year 1991-92, but did not do so regarding the said later years. This was done vide orders dated 13-2-1996 (Annexure C). The petitioner sought rectification in terms of section 35 of the Wealth Tax Act, 1963. Vide letter dated 30-5-2000 the respondent No.2 refused to rectify the error by observing that the matter is to be considered by the appellate forum and is beyond the purview of section 35 of the said Act.

2. Learned counsel for the petitioner contends with reference to clause (7) of Second Schedule to the said Act, of 1963 that the said remittances are exempt from the tax in the year they are brought or received and following five years and the legal proposition being absolutely clear, the respondent No.2 has acted without lawful authority in refusing the exercise his jurisdiction in correcting the matters. No one has turned up for the respondents although they are being represented by Mr. Muhammad Ilyas Khan, Advocate who sought adjournment on the last date of hearing, they are accordingly proceeded ex parte.

3. I have gone through the file of the writ petition with the assistance of learned counsel. I find that the claim of the exemption pertains to an immovable property bearing No.33 Paradise House, Super Town, Lahore. The value of the suit property was declared at Rs. 7,72,250 and this entire amount was stated to be foreign remittances. The evidence produced in support of the said claim was considered and believed. The respondent No.2 accordingly granted, exemption. However, this exemption was granted only for the year 1991-92 but not fur the years 1992-93 to 1994-96. No reason has been stated for disallowing the exemption for the assessment years 1992-93 and 1993-94. However, while making the assessment for the years 1994-95 and 1995-96 it has been stated that the exemption claimed is valid up to 30-6-1991. Now as per para. 7 of Second Schedule to the Wealth Tax Act, 1963 such remittances are exempt from wealth tax not only in the year they are received but also in the following five years. To my mind, the impugned order of the respondent No.2 prima facie, suffer from an error that is apparent on the face of record. However, the tenor of reply dated 30-5-2000 (Annexure E) shows that respondent No.2 has not even considered the said objection in the light of the said provisions of law. Perhaps this has happened because the respondent No.2 has proceeded to dispose of the said application without hearing petitioner. For all that has been discussed this writ petition is allowed, the impugned order of respondent No.2 dated 30-5-2000 inasmuch as he has refused to consider the said application and proceed in accordance with section 35 of Wealth Tax Act, 1963 is declared to be without lawful authority and is set aside. The result would be that the application of rectification shall be deemed to be pending before respondent No.2 who shall hear the petitioner and decide the same in accordance with law. No orders to costs. Copy of this judgment be sent to respondents Nos.2 and 3.

S.A.K./M-1361/LOrder accordingly.