2004 P T D 1

[Lahore High Court]

Before Nasim Sikandar, J

Messrs SAHIB TEXTILES (PVT.) LTD. through Managing Director, Faisalabad

Versus

FEDERATION OF PAKISTAN through Secretary Finance, Secretariat, Islamabad and 4 others

Writ Petitions Nos. 9979, 4699, 6478, 3896, 6471, 929,- 2358, 4029, 4054, 4055, 4056, 4057, 4143, 4144, 4319, 4320, 4358, 4407, 4470, 4481, 4545, 4546, 4551, 4582, 4583, 8662, 4584, 4648, 4639, 4651, 4653, 4654, 4682, 4683, 4688, 4691, 4700, 4721, 4786, 4861, 4862, 4874, 4877, 4875, 4876, 4954, 5033, 5317, 5318, 5320, 5368, 5376, 5397, 5396, 5461, 5968, 5971, 5973, 5974, 5975, 5976, 5977, 5978, 5717, 5880, 6074, 6223, 6228, 6230, 6342, 6343, 6344, 6345, 6477, 6490, 6521, 6797, 7293, 7235, 7228, 7022, 6843, 7764, 7238, 3779, 9016, 6370, 7026, 7886, 6971, 6641, 6523, 4476, 6827, 6883, 6786, 6808 and 10328 of 2003, decided on 24/09/2003.

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

----S. 59---Self-Assessment Scheme---Development of the scheme-- History and background---Unchanging desire of Revenue to have absolute jurisdiction to pick up any assessee out of the scheme for total audit---Method suggested for saving Revenue from such endless exercises and assessees from unjust harassment.

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

----Ss. 7, 8 & 59---Fixation of a cut off date for doing a job and then its extension within domain of Board of Revenue being a pure policy matter---Fixation of such date has nothing to do with assessee, who has already filed return---Extension in cut off date would not give birth to any corresponding liability or responsibility on the part of taxpayer-- Principles.

Central Board of Revenue has authority to issue direction to subordinate authorities fixing a date for doing a job and then extending the same. Not only in matters of such scheme, the Board is otherwise competent to make orders 'under sections 7 and 8 of Income Tax Ordinance, 1979 for the purposes mentioned in those provisions.

The fixation of a cut off, date for doing a particular job and then its extension is a pure policy matter falling within the domain of the officers in the official hierarchy. The fixation of such date has nothing to do with the assesses, who had already filed their returns. If the Central Board of Revenue fixed a certain period for a certain officer or a region to recover the outstanding revenue and that dead line is not met by the concerned officer or the region it would not mean that the amounts, which could not be recovered during that period, had become non-recoverable or time-barred allowing the assessee taxpayers a right to refuse to pay the-same.

The extension in cut off date does not give birth to any corresponding liability or responsibility on the part of taxpayers.

When both original cut off date and its extension are made by Central Board of Revenue, then there would be no question of violation of the direction of the Board by a subordinate Revenue Authority.

Such extension is nothing more than a direction by superior autho rity to complete a job already assigned to a lower authority.

(c) Vested right----

---- Vested right would not create on the basis of direction made by higher Revenue Authority to lower Revenue Authority touching a pure administrative act.

(d) Administration of justice---

---- Accrual of a right immediately creates a corresponding liability.

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

----Ss. 59, 7 & 8---Self-Assessment Scheme---Extension in cut off date for selection of cases for total audit---Object and effect---Such -extension would not destroy the scheme---Purpose of such extension is to allow more time to taxpayers to place their view point before Revenue Authorities against selection of their cases out of scheme---Such extension cannot be termed "mala fide" for mere reason that possibly that some more returns can be taken out of the scheme in the meanwhile existed---Such extension can be described mala fide only, if fixation of such date is itself mala fide.

Abdul Rauf and others v. Abdul Hamid Khan and others PLD 1965 SC 671 fol.

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

----S. 59---Self-Assessment Scheme----Fixation of cut off date for selection of cases for total audit and then its extension---Effect---Such fixation would not confer any vested right on the assessee---Question of taking away of such right by another executive action, thus, would not arise at all---Retrospective effect of such extension can be challenged only, if original cut off date has resulted in creating or vesting of any right in assessee---Extension of date either made before or after cut off date would not give rise to any right.

Bannu Sugar Mills (Pvt.) Ltd. v. Inspector, Customs and Central Excise 1990 CLC 569; Messrs Flying Board and Paper Products v. Central Board of Revenue, Government of Pakistan, Islamabad and 3 others PLD 1996 Lah. 718 and Al-Sumrez v. Federation 1986 SCMR 1917 ref.

(g) Vested right---

----Connotion---Vested right is a right, which is complete and nothing remains to be done to fix such right.

Messrs Mardan Industries Ltd. v. Government of Pakistan and another PLD 1965 Pesh. 47 ref.

2000 NLR 302 fol.

(h) Income Tax Self-Assessment Scheme----

---- Fixation of cut off date by higher Revenue Authority to a lower in hierarchy and its extension---Effect---Such act is mere administrative communication between the two---Fixation and extension of such date is an administrative act---Legal, status is different of both notifications granting exemption and a letter by superior Authority to its subordinate directing him to dispose of certain matter within specified time---Letter containing a direction by one officer to his subordinate to complete an assignment within a certain period of time does not vest any right in a private citizen or in taxpayer.

Ellahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582 = 1997 PTD 1555 ref.

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

----Ss. 59 & 62---Self-Assessment Scheme---Direction by C.B.R to RCIT giving a time limit to select cases for total audit---Validity---Such direction was not "performance of a legal duty" qua assessee, the denial or absence whereof could amount to accrual of legal right.

Fazal Din v. Lahore Improvement Trust, Lahore and another PLD 1969 SC 223 rel.

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

----Ss.59, 7 & 8---General Clauses Act (X of 1897), S.23 --- Self Assessment Scheme---Issuance of policy guidelines by Central Board of Revenue to Regional Commissioners of Income-tax---Non-publication of such guidelines in the official Gazette---Effect---Such guidelines were basically a communication between the Board and its subordinate Authority conveying administrative decision---Such guidelines would neither result in investing any right in any individual nor take away a vested right of an individual---Question of publication thereof, thus, would not arise at all.

Mian Kamal Anwar, Sargodha Road, Faisalabad v. Income Tax Appellate Tribunal, Lahore and others 2002 PTD 1895 and Muhammad Suleman v. Abdul Ghani PLD 1978 SC 190 ref.

(k) General Clauses Act (X of 1897)-----

----S. 23---Publication in official Gazette---Effect---Such publication is legally presumed to be an information to all and, sundry---Absence of such publication cannot be pleaded in the same way as ignorance of law.

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

----S. 59---Self-Assessment Scheme---Guidelines/circular specifying categories of assessees liable to be selected for total audit---Holding back such guidelines till filing of returns---Validity---Such holding back was unethical and unjustified as State does not cheat citizens---Such withholding would amount to keep most important aspect of scheme in dark and would be an attempt to trap unwary assessee---Issuance of such guidelines/circular would nullify part of such scheme---Identification of any such category must be in accordance with scheme either by declaring therein or at least before last date for submission of returns---Criteria for selection of cases for total audit, after filing of returns, would indicate complete lack of confidence in assessee---Such withholding might not be mala fide---Where all requirements of scheme were answered, then Assessing Officer was obliged to frame assessments in accordance with returns in view of the words "shall assess" as used in S. 59(1) of Income Tax Ordinance, 1979---Selection of cases for process under normal law on the basis of guidelines issued after filing of returns could not be approved on any legal, moral or ethical basis.

Dr. M.D. Youchi, Mayo Hospital, Lahore v. Assistant Commissioner of Income-tax, Circle 20, Companies Zone-I, Lahore and others Writ Petition No. 2331 of 2001 fol.

Cannon Products Ltd. v. IT Officer, Companies Circle, Karachi 1985 PTD 549; Muhammad Asghar and others v. Income Tax Officer and others 1986 PTD 357 and. Ikhlaq Cloth House, Faisalabad v. ALIT, Faisalabad 2001 PTD 3121 ref.

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

----S. 59---Self-Assessment Scheme---Change in or extension of scheme after its announcement and filing of returns--Scope and validity-- Availing of scheme is optional for assessee, but such fact, would not justify issuance of parameters of denial of scheme to assessee individually or collectively after filing of returns---After filing of returns and taking final and decisive step by assessee in response to scheme notified for, the year, no change or extension detrimental to assessee can be made therein.

(n) Income-tax-----

----Declared income---Proof---Privilege or right of Revenue to require a taxpayer to support his declared version cannot be questioned.

Mian Ashiq Hussain, Siraj-ud-Din Khalid, .Naeem Shah, Rana Muhammad Afzal, Shahbaz Butt, M. Iqbal Hashmi and Shafqat Mehmood Chohan for Petitioners.

Muhammad Ilyas Khan, Shahid Jamil and Mian Yousaf Umar for Respondents.

Date of hearing: 5th August, 2003.

JUDGMENT

The Self-Assessment Scheme (for short SAS) found its way in the statute as section 59 of the late Income Tax Ordinance, 1979. Earlier rule 46 was added to Income Tax Rules, 1962 on 25th August, 1964 which allowed the Income-tax Officer a discretion to complete assessments under section 23(1) of the Income-tax Act, 1922 in respect of certain categories of assesses, mostly salaried, on the basis of declared income. Section 59(1) of the late Income Tax Ordinance; 1979, at the time of its enforcement on 1-7-1979 provided;

"(i)Where the return of total income for any income year has been furnished by an assessee, the Income Tax Officer may, by an order in writing made before an assessment is made under sections 62, 63 or 65 as the case may be, determine the total income of the assessee and the tax payable by him on the basis of such return."

2. Section 59(1) was amended in the very next year viz. 1980 providing for the first time a Scheme of Self-assessment to be made by the Central Board of Revenue for that year. However, even before that p amendment, the salient features of a Self-Assessment Scheme were published as part of budget document for the year, 1979-80. Thereafter Circular No.3 of August, 13, 1979 was issued to give effect and to elaborate the scheme.

3. After identifying the kinds of assessees to be covered by the schemes para. 6 of the Circular stated that the Board shall select a number of cases or classes of cases for detailed scrutiny for which announcement was to be made within 15 days of the due date of filing of returns. These cases were to be kept out of the purview of SAS to be decided after thorough scrutiny of accounts. A number of circulars fol lowed to explain parameters, mode and modalities of proposed scrutiny.

4. In the year, 1980-81 similar provisions were made to enable the Central Board of Revenue to select classes of cases or classes of income to be set apart for detailed scrutiny where ever deemed fit. In the year, 1981-82, the cases of certain professions car-dealers, recruiting agents etc. were directed to be set apart for detailed scrutiny. In the year, 1982-83 besides provisions for setting apart, para. 9 was added to the scheme to cover concealment cases. It provided "Notwithstanding anything contained in the preceding paragraph, the cases where positive evidence of concealment exists or comes into possession of the department during the pendency of the assessment, such cases shall fall outside the purview of Self Assessment Scheme as well as from immunity from scrutiny, irrespective of the quantum of income declared or certificate furnished by the Chartered Accountant".

5. In the years, 1983-84 again the Central Board of Revenue arrogated to, itself the selection of cases for detailed scrutiny "under a policy to be announced after the receipt of returns". Subsequently through Circular No. 14 dated of November 24, 1983 certain categories of the business and profession, Flour Mills, beverage manufactures, commercial importers etc. were selected for that purpose. However, still the Central Board of Revenue further reserved its right to select other cases as well. In the year, 1984-85 Regional Commissioners of Income tax were involved for selection of "individual cases under a policy to be announced after receipt of returns.". Finally the procedure given in 1983-84 scheme was adopted picking up certain kinds of business or professions for detailed scrutiny but still reserving the privilege of Central Board of Revenue to select other cases. In the scheme for the year 1985-86 for the first time the computers were involved for selection to "be made on the basis of random sample through the computer.". The selection of classes of cases or classes of persons was to have the approval of Finance Minister and the selection among each such classes for detailed scrutiny was to be "on the basis of random sample through computer." In the year, 1986-87 an immunity from detailed scrutiny was provided for the assessees declaring 20% more income than in the previous year. In the year, 1987-88 for the first time the selection of number of cases for scrutiny was to be a percentage "on the basis of random sample through the computer." The Central Board of Revenue did not reserve any right nor a mode for itself or its officer to make selection for audit. In the years, 1988-89 and 1989-90 the scheme with similar features and characteristics was named as "simplified procedure for assessment". Section 59-B was added to the late Ordinance through Finance Act, 1988 to give a legal cover to the new scheme which was however, meant for small earning groups only. The assessment on the basis of return filed was to be final "unless the Income Tax Department receives or discovers documentary evidence of concealment.". Otherwise the acknowledgement of submission of return was deemed to be an order of assessment. No express provision for selection of cases for audit was given. That scheme was abandoned in the year 1990. In the year, 1990-91 Self-Assessment Scheme was again introduced. In the re-named scheme five per cent of the returns filed under the scheme were to be selected through computer and unspecified number "with the approval of Regional Commissioner of Income Tax where gross understatement of income is suspected on the basis of definite information based upon material evidence". In the year, 1990-91 besides SAS a scheme of fixed tax was also sought to be introduced. That scheme does not appear to have received approval either from the assessees or the Revenue.

6. The procedure and percentage of cases to be selected for total audit remained the same in the subsequent assessment years up to 1994-95 as it was for the year, 1990-91. In the years, 1995-96 the, scheme was renamed as Broad Based Self-Assessment Scheme (BBSAS) which did not provide for selection of cases for total audit. However, para. 8 of the scheme notified on 11^th July, 1995 contemplated acceptance of all returns with an over rider that a return could be subjected to concealment proceedings under section 65 of the late Income Tax Ordinance 1979 where there was definite information of concealment of income or furnishing of inaccurate particulars. In other words a return filed amounted to a completed assessment and was to be reopened on the same basis and in the same manner as a regular assessment could be reopened under section 65 of the late Ordinance.

7. In the year, 1997-98 though the scheme retained its name yet it underwent some changes qua selection of cases out of the scheme. Unlike the earlier year, in para. 5 of the scheme it was stated that "a certain percentage of returns may be audited from amongst the returns filed by new tax payers under the scheme." Earlier in para. 4 it was explained that all returns meetings the requirements of scheme shall be accepted and no question shall be asked from the assessees. In the following two years viz. 1997-98 and 1998-99 the scheme was renamed as simplified Self-Assessment Scheme. In the first year viz., 1997-98 only 5% of returns were to be selected "for special audit through computer ballot". Also the scheme, for the first time provided for entrustment of selected cases to Chartered and Cost and Management. Accountants for audit and the assessments to be made by Special Officers appointed in that behalf. Earlier section 4--A (private Income-tax Authorities) was added in the late Income Tax Ordinance, 1996. It was completely substituted by section 4-A (appointment of Chartered Accountants) in the year, 1998.

8. In the second year viz. 1998-99 the percentage of cases to be selected through computer ballot was increased to 10% of the returns filed. A provision was also made to outsource the selected cases for audit purposes under section 4 or 4-A of the late Ordinance. In addition, the Central Board of Revenue retained its jurisdiction to "specify classes/ categories of case for special audit through separate circular.' In the year, 1999-2000 the scheme had yet another name. This time it was notified as "Universal Self-Assessment Scheme" (USAS) through Circular No. 18 of 1999. After a declaration in para. 2(b) that all returns of income for the year, 1999-2000 shall be entitled to benefit of Self Assessment Schemes except for certain specified taxpayers. (Banking Companies and Modarabas) para. 11 of the scheme held out an assurance that there will be no arbitrarily selection of cases for audit or scrutiny but cases of concealment/ evasion of income will be brought to the notice of Regional Commissioners of Income Tax who may only "after counseling with the taxpayers take necessary decision for proceedings under normal law." In the next three years i.e. 2000-2001, 2001-2002 and 2002-2003 the scheme re found its name as Self-Assessment Scheme. Para. 6 of the scheme lit the year 2000-2001 provided for selection of 10% cases through random ballot and "cases selected by CITs with the approval of RCITs concerned". In the latest two years viz. 2001-2002 and 2002-2003 para. 9 of the scheme for selection of cases for audit remained exactly the same. Since that para. in the year 2002-2003 is in issue in these Constitutional petitions, it is reproduced for facility of reference:

Selection of cases for Audit

(a)From amongst the returns filed under the Scheme (excluding salary and only property income twenty percent (20%) returns may be selected for total audit the following manner:--

(i) through computer ballot which may be random or parametric, as deemed fit by C.B.R.

(ii) By Regional Commissioners of income Tax on , the recommendations of Commissioners concerned, in the light of guidelines issued by the Central Board of Revenue in this behalf.

(b)(Not relevant).

9. Before proceeding further, it is necessary that other aspects of the scheme in question are detailed to know precisely the grievance of the petitioners. The Self-Assessment Scheme for the year 2002-2003 was announced on 15-6-2002 through Circular No.7 of 2002. Last date for filing of returns for non-company cases was fixed as 30-9-2002 (subsequently extended to 15-10-2002) and for company cases at 31-12-2002. After expiry of date fixed for filing of non-company cases the Central Board of Revenue on 17-12-2002 issued a "policy guidelines" letter to all the Regional Commissioners of Income-tax. Para. 2 of the letter reads as under:--

"In order to fulfil the above obligation of the Scheme regarding issuance of the guidelines, it has been decided that the RCITs shall select only those revenue political cases, where there is an evidence, information or reason to believe that the true particulars of income have been suppressed. Such selection may be based upon factor including an evident decline in income and disparity in expenses on utilities vis-a-vis income declared. Besides, cases of taxpayers acquiring new assets or. incurring a liability of Rs.50,000 or more through a non-institutional loan, as declared in their wealth statements or where department is otherwise in the knowledge of some investments made by them, also need to be considered for selection, if it is felt that sources of such acquisition/investment require detailed examination. In order to identify such cases the tax profiles of survey and Registration may also be consulted."

10. In the last para. of the above letter the Board desired that process of selection of cases must be finalized by 10-1-2003. However, that date was subsequently extended by the Board up to 31-3-2003 for company cases through a letter issued on 15-3-2003. An other letter was issued by the Board on 22-3-2003 to extend the date for selection of non company cases till 31-3-2002. Earlier on 31-1-2003 through a letter the Regional Commissioners were informed that due to filing of a small number of returns by the companies, the holding of ballot to select 20% cases out of that category was not logical and therefore, they were directed to select up to 20% returns for audit at their own level in the light of para. 9(2)(ii) of the Scheme and the guidelines of Central Board of Revenue, dated 17-12-2002.

11. Now comes the bitter part of it. The petitioners are individuals, firms and in some cases companies limited by shares. All of them filed returns under Self-Assessment Scheme for the year 2002-2003. Their cases were selected for total audit by the concerned RCITs. Some of the cases were selected after the cut of date of 10-1-2003 given by the Central Board of Revenue in the said letter, dated 17-12-2002. The selection of cases was admittedly made keeping in view the guidelines given by the Central Board of Revenue in its letter, dated 17-12-2002. It is the case of the petitioners that selection of their cases based upon the said guidelines before or after the cut of date given in that letter is against para. 9(a)(ii) of the Scheme. The reasons advanced at the bar follow as under:--

(a)The Circular No.7 of 2002 circulating the scheme does not envisage issuance of fresh guidelines for selection of cases out of the scheme. The word "issued" as used in para. 9(a)(ii) contemplates the guidelines either having already been issued or being issued simultaneously with the scheme.

(b)After issuing of a scheme the Board becomes functus officio to exercise the same power as vested in it under section 59(1) of the late Ordinance; the power to be exercised under section 59(1-A) again remains restricted to the scheme issued under section 59(1).

(c)The power of the Board to make a scheme being a delegated power cannot be exercised twice.

(d)Where all requirements of a scheme are answered the Assessing Officer is obliged to frame assessments in accordance with the return in view of the words "shall assess" used in section 59(1) of the late. Ordinance.

(e)The scheme once issued though can be explained or even softened but it cannot be changed to the detriment of the assesses to enlarge the scope for selection of cases out of the scheme. The guidelines issued by the Board on 17-12-2002 are in the form of afresh scheme on the subject of selection of cases out of the scheme and therefore, are illegal on the face of it; that the aforesaid guidelines are not in accordance with the scheme particularly para. 9 thereof. Factually these guidelines have taken away the benefit of S.A.S. by extending unnecessarily the scope of the scheme.

(f)As a ground reality, the selection of a case by RCIT will make it impossible for an assessee to convince the Assessing Officer of his point of view that there had not been any understatement. Also such selection will nullify the revisional powers of the RCITs conferred upon him under section 138 of the late Ordinance.

(g)The impugned guidelines have destroyed the real sense and purpose of the Self-Assessment Scheme as all returns are gone through and ignorable mistakes like leaving a column blank or settled issue as that of GP rate in a particular trade have been made ground for plucking the returns out of scheme.

(h)The issuance of letters extending the dates of finalization of selection of cases was also illegal as after expiry of the cut of date given in the letter, dated 17-12-2002 the assesses acquired a vested right to get their returns finalized under the scheme. The extension is also stated to be bad for the reason that it was made after expiry of the original target date.

(i)The letters extending dates for selection of cases were otherwise relevant only to the cases already picked up before 10-1-2003 and therefore, in the guise of these letters no fresh cases could be picked up for selection out of scheme.

(j)Under section 20 of the General Classes Act a scheme once issued cannot be amended and therefore, the guidelines are ultra vires of the powers of the Board.

(k)The modification of scheme by letter, dated 31-1-2003 asking the RCIT to select company cases at their own level instead of holding of ballot as stated in para. 9 of the scheme is totally illegal.

(l)The guidelines in order to have force of law were required to be published in the official Gazette. That having not been done, these are not binding. These guidelines, otherwise having been issued six months after the scheme and more than two months after the filing of returns in non-company cases, could not be treated a part of the scheme nor an instruction or order issued thereunder.

(m)Once an assessee has shown increased income to qualify for the scheme the Board has no moral authority to hook him through back door methods employed in the form of the said guidelines.

(n)The process of selection for audit both through ballot and by the Regional Commissioners is not transparent. 'Till date the Board and the RCITs have not made public the details of the cases selected ballot or through the RCITs and their percentage to be judged at the touchstone of the figures given in para.9 of the scheme.

(o)A scheme under the provisions of section 59 is in the nature of an offer and a promise held out to an assessee which, once accepted, cannot unilaterally be changed or amended particularly after the filing of the returns as the same would be against the principle of locus ponetentiae.

12. The Revenue in rebuttal has taken up the position that no assessment order having so far been made in respect of any of the petitioners, they are not aggrieved persons to maintain Constitutional petitions; that having submitted their returns under the scheme the petitioners cannot dispute either the scheme or an instruction, order or guidelines issued thereunder; that guidelines issued by the Board on 17-12-2002 are meant only to elaborate the scheme and it is neither an amendment nor an extension of the same; that fixation of cut of date for selection of cases and its extension is an administrative act and being in nature of a communication between the two official functionaries, it does not give rise to any right to an assessee; the fixation of a date for selection of cases and its extension being necessarily a policy matter, cannot be questioned in these proceedings; that extension in the cut of date was meant for allowing an opportunity of being heard to the assesses and therefore, being beneficial to them cannot be objected to by them. It is argued that the word "Issued" in para. 9(a)(ii) needs to be read as "to be issued" as the literal interpretation will result in absurdity to mean already issued even before the scheme, the guidelines, dated 17-12-2002 were issued to ensure objectivity, impartiality and transparency and therefore, these need to be appreciated in the same sense; the petitioners will have a right of appeal in case of framing of regular assessments and therefore, these petitions are not maintainable; that at best the vires of the scheme could be questioned in these proceedings which is not the case of the petitioners who are agitating selection of their individual case only; that guidelines being instructions issued by the Board are well-covered by the provisions of section 59(1) of the late Ordinance; that the basis for selection of a case for audit is a question of fact and therefore, cannot be challenged in these proceedings; that the scheme being optional an assessee having once availed the same cannot agitate the modes and modalities prescribed for its working; that irrespective of para. 9 of the scheme and the guidelines, dated 17-12-2002 a return filed under the scheme can always be taken up for regular assessment before the expiry of the period given in sub section (4) of section 59 of the late Ordinance; that a scheme can always be changed and amended under section 21 of the General Clauses Act.

13. Heard the learned counsel for the petitioners as well as the Revenue. The above grievances of the petitioner can very well be grouped into three. The first part pertains to para. 9 of the scheme, the second to vires of the guidelines, dated 17-12-2002 and the third to the different letters issued to extend the date for selection of company and non-company cases for total audit by the RICTs.

14. Taking up the third one first, I am not persuaded to agree that Central Board of Revenue has no authority to issue directions to the subordinate functionaries fixing a date for doing a job and then extending the same. Not only in matters of such scheme, the Board is otherwise competent to make orders under sections 7 and 8 of the late Ordinance 1979 for the purposes mentioned in these provisions. I am not aware of any legal principle which directly means to create a vested right on the basis of a direction made by a higher Revenue Authority to a lower Revenue Authority touching a pure administrative act. The fixation of a cut off date for doing a particular job and then its extension is a pure policy matter falling absolutely within the domain of the officers in the official hierarchy. The fixation of that date had nothing to do with the assesses who had already filed their returns. The, acceptance or contention of the petitioners may have chaotic results. For example if the Central Board of Revenue fixes a certain period for a certain officer or x region to recover the outstanding revenue and that dead line is not met by the concerned officer or the region; would it mean that the amounts which could not be recovered during that period had become non recoverable or time-barred allowing the assesses-taxpayers a right to refuse to pay the same. The answer is a big No.

15. As a rule, the accrual of right immediately creates a corresponding liability. In the case in hand the extension in cut off date does not give birth to any corresponding liability or responsibility on the part of the taxpayers. The C.B.R. by one of the aforesaid letters, as rightly pointed out by the learned counsel for the Revenue, rather required the Regional Commissioners to allow more time to the taxpayers before selection of their cases for total audit. It is also not correct on the part of the taxpayers to claim that issuance of such a direction destroyed the scheme in question or that it was otherwise harsh and unjust. In the final analysis the extension in time was not to the prejudice of the taxpayers as the purpose of extension was to allow them more time to place their view point before the Revenue Authorities that their cases could not be selected out of the scheme. Therefore, the reliance of the learned counsel Mr. Shahbaz Butt, Advocate, on the ratio settled in re: Abdul Rauf and others v. Abdul Hamid Khan and others (PLD 1965 SC 671) is hardly of any avail. In that judgment the Hon'ble Supreme Court of Pakistan found that a mala fide act was by its nature was an act without jurisdiction. The act in question i.e. extension in cut of date for selection cannot be termed "mala fide" for the mere reason that possibly some more returns could be taken out of scheme in the meantime. The extension could be described mala fide only if the fixation of that date was itself mala fide which is not the case of the petitioners. The reliance of Mr. Siraj-ud-Din Khalid, Advocate, on re: Messrs Mardan Industries Ltd. v. Government of Pakistan and another (PLD 1965 Peshawar 47) is also impertinent. In that judgment the Hon'ble Peshawar High Court found a vested right as an immediate fixed right of present and future enjoyment in contra-distinction to a contingent right.

16. His reference to another judgment of the Hon'ble Peshawar High Court in re Bannu Sugar Mills (Pvt.) Ltd. v. Inspector Customs and Central Excise (1990 CLC Peshawar 569) is also not of any avail. In that judgment the Hon'ble Court observed that vested rights could not be taken away by an executive action. Since in this case fixation of cut off I date for selection of cases out of scheme did not confer any vested right on the assesses its raking away by another executive action does not arise at all. In re: Messrs Flying Board and Paper Products v. Central of Revenue, Government of Pakistan, Islamabad and 3 others (PLD 19961 Lahore 718) a Division Bench of this Court observed that the impugned notification for withdrawal of exemption in the payment of sales tax could not be given retrospective effect and vested right could not be interfered with. That case relied upon at the bar by Mr. Siraj ud Din Khalid, Advocate is also not relevant to the facts in hand. As observed earlier, the fixation of cut off date by, a higher Revenue Authority to a tower in the hierarchy was a mere administrative communication between the two and its extension was as much an administrative act as its fixation was. The legal status of a notification granting exemption and a letter by a superior authority to his subordinate authority pertaining to its ability and capacity to dispose of a certain matter within a specified time stands on altogether different footings.

17. The objection of the petitioners that extension in time by way of the impugned letters issued in the month of February and March qua the already expired cut off date of 10^th January, 2003 is again untenable. The proposition settled in re: Al-Sumrez v. Federation (1986 SCMR 1917) that retrospective effect cannot be given to an executive order so as to destroy rights and obligations already accrued is accordingly not attracted to the facts in hand. The retrospective effect of these letters could be challenged only if the original cut off date had resulted in creating or vesting of any right in the assesses. Since that had not happened, the, extension of date either made before or after that date equally does not give birth to any right. In (2000 NLR 302) a vested right was held to be a right which was complete so that nothing remained to be done to fix that right. The extension in question was nothing more than a direction by the superior official authority to complete a job already assigned to a lower authority.

18. The ratio settled by the Hon'ble Supreme Court in re: Fazal Din v. Lahore Improvement Trust, Lahore and another (PLD 1969 SC 223) was based upon the personal interest of a petitioner in Constitutional jurisdiction of the "performance of legal duty". The direction by the C.B.R. to RCIT giving a certain time limit to select the cases was not "performance of a legal duty" qua the petitioners the denial or absence whereof could amount to the accrual of a legal right.

19. It is equally improper to suggest that the letters issued after 10^th of January, 2003 extending the date in any manner had "retrospective effect". In the judgment relied upon in that regard re: Ellahi Cotton Mills Ltd. v. Federation of Pakistan PLD 1997 SC 582 = 1997 PTD 1555 the Hon'ble Supreme Court of Pakistan held that an executive order/notification which was detrimental or prejudicial to the interest of a person could not operate retrospectively. That principle again is not attracted to the facts in hand as argued by Mr. Naeem Shah, Advocate. At the cost of repetition it is stated that a letter containing a direction by one official functionary to a subordinate functionary to complete an assignment within a certain period of time does not vest any right in a private citizen or in the taxpayer. In the other case relied upon in that context in re: Mian Kamal Anwar Sargodha Road Faisalabad v. Income Tax Appellate Tribunal, Lahore and others (2002 PTD 1895) the selection of cases for total audit having been made beyond the date fixed by the Central Board of Revenue was struck down on the ground that an instruction issued by the Board in furtherance of Self-Assessment Scheme was to be read as part of the scheme and that default in meeting that dead line on the part of the Revenue Authorities including the Regional Commissioner of Income Tax could not be seen with favour. The ratio in that case again is not relevant to the facts in hand as both original cut off date and its extension were made by the Central Board of Revenue. Therefore, there was no question of violation of the direction of Central Board of Revenue by a subordinate Revenue Authority. In the case in hand there is neither an assertion that an authority subordinate to C.B.R. violated its instructions/order nor in the present case the interpretation of the provisions of section 7 and 8 of the late Income Tax Ordinance, 1979 is involved. The complaint of the petitioners that these guidelines could take effect only if published in the official Gazette is also not legally terrible. The case-law relied upon in that regard is distinguishable. In re: Muhammad Suleman v. Abdul Ghani PLD f 978 SC 190), it was held that a notification curtailing the right of pre emption could be withdrawn only through another publication in the form of notification in the official Gazette to have effect from the date of publication in the Gazette and not from an early date. The guidelines in question were however, basically a communication between the Central Board of Revenue and its subordinate authority conveying administration decision. A publication in. the official Gazette is legally presumed to be an information to all and sundry. The absence of knowledge of such publication cannot be pleaded in the same way as ignorance of law. As noted earlier these guidelines did not result in vesting any right in any individual nor these took away a vested right of an individual. Therefore, the question of their publication in the official Gazette did not arise at all.

20. Since the other two grievances pertaining to para. 9 of the scheme and the guidelines issued on 17-12-2003 are interlinked, these are taken up together. As far the power of Central Board of Revenue to frame a scheme and to provide for selection of cases out of a scheme is concerned, it is amply supported by the provisions of section 59(1) and 59(1-A) of the late Income Tax Ordinance, 1979: In fact these and identical issues were earlier considered by this Court in re: Cannon Products Ltd. v. IT Officer Companies Circle, Karachi (1985 PTD 549) and re: Muhammad Asghar and others v. Income-tax Officer and others (1986 PTD 357). The most recent judgment on the issue of selection of cases out of returns filed under Self-Assessment Scheme through random ballot was delivered by my learned brother Mr. Justice Mansoor Ahmed in re: Ikhlaq Cloth House Faisalabad v. ACIT, Faisalabad (2001 PTD 3121.).

21. As far selection of cases through random ballot as well the RCITs, the petitioners describe them to be not only against the basic concept and purpose of the scheme but also uncertain. It is submitted that para. (a) is not clear as to the exact number of cases which are to be excluded from the scheme on the basis of computer ballot and the ratio out of the total fixed ratio of 20% to be selected by the RICTs. The contention is not unfounded. Although para. 9 of the scheme speaks of selection of cases for audit filed under the scheme yet, the percentage assigned to the ballot and the discretion of the RCITs to select these cases is nor clear. The break-up chart provided by Mr. Ilyas Khan, learned counsel for the Revenue is certainly incomplete as it lacks the details of total returns filed nationwide and the basis on which each region was allocated the percentage for such selection. The claim that out of total number of returns filed under SAS at 54801 some 6242 were selected for audit through random ballot while 369 returns were picked up by RCITs under para. 9(a)(ii) appears to be on regional basis but it is claimed to be on national basis. Secondly no explanation worth the name has been given to justify issuance of said letter, dated 31st January, 2003 allowing the RCIT's to "select such cases at their own level", for the reason that number of returns required to be selected was very small. The Revenue is apparently taking advantage of the uncertainty pointed out by the petitioners in para. 9 as to the bifurcation of the percentage to be allocated to the two methods.

22. The contention that para. (a)(ii) of the scheme contemplated issuance of guidelines either alongwith the scheme or earlier thereto also appears correct. For me it is totally unacceptable that most important aspect of the scheme is kept in dark to keep the opters of the scheme on their tender hooks till the period prescribed in section 59(4) is over. I will also agree that holding back of such guidelines till the filing of returns was unethical. A State (represented by the functionaries) does not lurk around citizens to catch hold of the first responding to the allurement made. Recently in Writ Petition No. 2331 of 2001 re: Dr.M.D. Youchi, Mayo Hospital, Lahore v. Assistant Commissioner of Income Tax Circle 20 Companies Zone-1, Lahore and others the selection of case of the assessee out of scheme was disapproved for the reason that the Revenue after issuing of Self-Assessment Scheme in the year, 1998-99 issued another circular on 30-12-1998 in which certain categories of the assessees were detailed whose cases were to be selected for special audit for that year. The relevant portion of the order reads as under:--

"It has been noticed that after issuance of Self-Assessment Scheme for the year, 1998-99 the C.B.R. issued another circular on 30-12-1998 specifying certain categories of assessees whose cases were to be selected for special audit for the assessment year, 1998-99. The issuance of that Circular No. 16 of 1998 almost 5/6 months after the issuance of Self-Assessment Scheme was totally unjustified. It was an attempt to trap the unwary assessees. All categories of assessees given in the circular ought to have been informed well before filing of returns under Self-Assessment Scheme that they will not be allowed to avail the concession. The issuance of circular nullifies part of the scheme. The case of assessee was taken up against the scheme and was, therefore, illegal exercise of a discretion vested in the Revenue."

I will hasten to add that identification of any such category would have perfectly been in accordance with the scheme if it was so declared therein or at least before the last date for submission of returns. The petitioners are also correct in pointing out that the withholding of such guidelines for selection of cases by RCITs was totally unjustified as para. 7(vi) already excluded the returns from the scheme where there was evidence of concealment of income. The interpretation of the Revenue that guidelines could be issued after the announcement of the scheme may very well be correct but only in point of time till the returns were actually filed. The issuance of guidelines was kind of disclosure by the Revenue which was totally unjustified and inappropriate after the assesses had filed their returns. The Self-Assessment Scheme being in vogue for the last many years it could not be said that the revenue was not ready with the necessary details or that was in any manner lacking the essentials to make the guidelines. Therefore, holding them back months after the returns had actually been filed was totally unjustified. Therefore, the use of word "issued" in para. 9(a)(ii) cannot be diluted to be read as "to be issued" as desired by the learned counsel for the Revenue.

23. Although I am not in agreement with the arguments of the petitioners that a scheme once issued could neither be amended nor extended as an exercise of one time delegated power; yet, I am in agreement that such change or extension cannot be detrimental to the assessees after returns had been filed and a final and decisive step had been taken by the assessees in response to the scheme notified for the year. It is correct that availing the scheme is optional for an assessee and that every assessee of the Income Tax Department can file a return under section 55 to be treated and assessed under normal law. However, that fact alone does not justify the issuance of parameters of denial of scheme I to the assessees individually or collectively after filing of the returns. A glance at the guidelines, dated 17-12-2002 makes it clear that para. 9(a)(ii) of the scheme has completely been substituted. The Revenue is totally, silent as to why these guidelines could not be issued as part of para- 9, simultaneously with the scheme or at least before the filing of the returns. The shroud of uncertainty appears to have deliberately been allowed to remain covering guidelines only in order to have unchecked discretion to select a case for total audit. The withholding of the parameters or guidelines of selection of cases out of the scheme may not necessarily be mala fide. However, withholding or the guidelines till the filing of these returns does not appear bona fide either. The State, does not cheat the citizens. The Revenue, therefore, is not correct in claiming that the purpose of these guidelines was to provide for impartiality and transparency.

24. The petitioners also have a good case in contending that when all requirements of the scheme are answered, the Assessing Officer is obliged to frame assessments in accordance with the returns in view of the word used "shall assess" in section 59(1) and 59(1) appear some-what contradictory. However, since the Ordinance stands repealed except for certain specific purposes identified in the new Income Tax Ordinance, 2001, I am not required to make any further discussion on the subject.

25. Para. 2 of the guidelines, dated 17-12-2002 in my way of reading is a complete scheme in itself. These guidelines are nothing less than a blank distress warrant in which RCITs were required to fill in the name of the person to be taken to task. The phrases used in the letter are of so wide import and significance that no taxpayer could possibly save his skin even if these are followed with due leniency. The guidelines provide for selection of a case where there is evidence, information or reason to believe that the true particulars of income have been suppressed, there is a decline in income, disparity in expenses on utility vis-a-vis income declared; assessee acquires new assets, incurs liability of Rs.50,000 or more through a non-institutional loan and the department is in knowledge of some investment made by him. Also a selection out of the scheme can be made on utilization of information from survey and Registration. One may always argue that nothing was being asked from the taxpayers except is support their declared version. In income tax matters the things are not that simple as are tried to be shown. These parameters, as observed earlier, are not less than a complete scheme and a complete negation of Self-Assessment Scheme. Obviously to look for a "revenue potential" case, the Revenue officers will go through or at least have a glance on every return filed under the scheme. If that is to be so, then there is hardly any justification to make a big show of the scheme.

26. In the earlier part of this order I have attempted to bring home that the Revenue has never been serious to make the scheme a success. That purpose was achieved through vesting of discretion in its officers to select a case out of the scheme. Except fort the "lucid intervals" in the yeas 1988-89 and 1989-90 and 1995-96 (partly in the year 1997-98) the scheme negated itself by providing for discretion to Revenue officers to select a return out of scheme. Most unfortunate part being the declaration of guidelines or the criteria for selection of such cases after return had already been filed. The privilege or right of Revenue to require a taxpayer to support his declared version cannot be questioned. However, the so-called Self-Assessment Scheme failed to fulfill the promise of the Revenue to extend a friendly hand to the taxpayers. The issuance of the criterion for selection of cases after filing of returns rather indicated complete lack of confidence in the assesses. The Revenue, during all these years tried all options available to it to give colour of credibility to the process of selection. In the beginning it was the Income Tax Officer then the CIT and in the year under consideration RCITs were involved. In the early days immunity was promised on payment of higher income. The same percentage of 20% higher income was subsequently converted into a requirement for filing of return under the scheme not only denying the right of immunity but also reserving a right for the Revenue to select any return. The scheme was given different names during these years but the desire of the Revenue to have absolute jurisdiction to pickup any assessee out of the ,scheme remained unchanged. It may be noted that in some ways Self-Assessment Scheme' or a similar provision in the statute is not a favour by the Revenue to the assessee. As a matter of a fact with the increase of number of assessees, it is no more possible for the Revenue to frame a regular assessment in every case as used to be the practice after introduction of Income Tax Act, 1922.

27. Ever-since the introduction of Self-Assessment Scheme the Revenue as well as the assesses are in a continuous chain of litigation against the former right to select a return out of scheme. At the initial stage when the Revenue failed to justify its right to select the cases the law was amended and the provisions of section 59(1) and 59(1A) were added, to support the claimed powers. However, that did no solve the problem. The reason remains the same till date. It is ever eroding confidence and trust between the taxpayers and the tax collectors. The number of officers involved and the man-hours spent in going through the returns filed under scheme, serving the tax payers with notices and the ping pong of correspondence following thereafter has not yielded any benefit to any of two. In the process at times the Revenue spends more r money than it manages to recover by coercing some of the assesses who catch its eye. It may be observed that Heaven did not fall in the said two or three years when no provision for selection out of the scheme was made.

28. A declared suspicion remains the language of communication between the assessee and the Revenue officers. The situation is not likely to change if the impugned powers remain part of the scheme or even a provision of the statute. A discretion vested in the Revenue officer to select a return for process under normal law will always be questioned and agitated both in the Revenue officers as well as the before the Courts. The only way out appears to be non-involvement of individual Revenue officers irrespective of their status in the official hierarchy. With the advent and availability of modern devices a mechanism needs to be evolved that every return filed in a year is first accepted and then a certain percentage of the total returns filed in the year is picked up for regular assessment through computer ballot. The mechanism must be evolved in such a way that every assessee goes through the mill of regular assessment or total audit once in 4/5 years. The holding of ballot through computer for selection of cases should also be open and transparent. That appears to be the only way out ,to save the Revenue from endless exercises and the assesses from unjust harassment. That is the only way to give the system a chance.

29. Since admittedly all the cases of the petitioners were selected for process under normal law on the basis of the guidelines issued after filing of the returns these cannot -be approved on any legal, moral or ethical basis. Therefore, for the reasons earlier detailed in the previous paras. I will allow these petitions and hold that their selection for total audit on the basis of guidelines was improper. It shall be set at naught.

30. This order will dispose of Writ Petitions Nos. 4699, 6478, 3896, 6471, 929, 2358, 4029, 4054, 4055, 4056, 4057, 4143, 4144, 4319, 4320, 4358, 4407, 4470, 4481, 4545, 4546, 4551, 4582, 4583, 8662, 4584, 4648, 4639,' 4651,4653, 4654, 4682, 4683, 4688, 4691, 4700, 4721, 4786, 4861, 4862, 4874, 4877, 4875, 4876, 4954, 5033, 5317, 5318, 5320, 5368, 5376, 5397, 5396, 5461, 5968, 5971, 5973, 5974, 5975, 5976, 5977, 5978, 5717, 5880, 6074, 6223, 6228, 6230, 6342, 6343, 6344, 6345, 6477, 6490,6521, 6797, 7293, 7235, 7228, 7022, 6843, 7746, 7238, 3779, 9016, 6370, 7026, 7886, 6971, 6641, 6523, 4476, 6827, 6883, 6786, 6808 and 10328 of 2003.

S.A.K./S-759/LPetitions allowed.