CANTONMENT EXECUTIVE OFFICER, MULTAN VS FEDERATION OF PAKISTAN through Secretary Finance, Government of Pakistan, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 2445 (2006)

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

----S.52---Constitution of Pakistan (1973), Art.199---Constitutional jurisdiction of High Court---Scope---Facts need to be proved---Cantonment Board rented out/auctioned certain properties belonging to it---Board, according to Assessing Officer was required to collect tax under S.50(7A) of the repealed Income Tax Ordinance, 1979 so he made assessment in the name of the Cantonment Executive Officer of the Board who was a civil servant---Contention of the Board was that it had leased the properties and had not sold them and refused to pay tax whereupon it was treated as assessee in default in terms of S.52 of the Income Tax Ordinance, 1979---Validity---Liability was determined without associating the Board and was based on .a number of years allegedly through a mechanical order and same was forcibly recovered by Assessing Officer from the Board's account---Issues whether the tax had been paid year-wise or was it calculated in unison, whether same was forcibly recovered and whether Cantonment Board and Executive Officer of said Board were same entities required detailed appraisal of evidence and adjudication which could not be undertaken in writ jurisdiction---Constitutional petition was not maintainable.

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

----Art.199---Constitutional jurisdiction---Scope---Order passed without jurisdiction---Where order passed by the Authority was without jurisdiction and .unlawful, there would be no bar to the filing of constitutional petition under Art.199 of the Constitution as High Court has jurisdiction to correct and rectify errors of law.

(c) Constitution of Pakistan (1973)---

----Art. 199--- Constitutional jurisdiction--- Scope--- Pre-conditions---Paramount consideration in exercise of constitutional jurisdiction is to foster justice and to right a wrong---Before a person can be permitted to invoke the said discretionary power of a Court, it has to be shown that the order sought to be set aside has occasioned some injustice to the parties---Where the order does not work any injustice to any party, rather the order cures a manifest illegality, then the extraordinary jurisdiction should not be allowed to he invoked.

Premier Cloth Mills Ltd. Lyallpur v. The Sales Tax Officer and another 1972 SCMR 257; Usmania Glass Sheet Factory v. Sales Tax Officer PLD 1971 SC 205; Chairman, Central Board of Revenue, Islamabad and 3 others v. Messrs Pak-Saudi Fertilizers Ltd. 2001 SCMR 777 and Mst. Kaniz Fatima through Legal Heirs v. Muhammad Saleem and 27 others 2001 SCMR 1493 rel.

Messrs Kamalia Sugar Mills Ltd., Kamalia v. Superintendent, Intelligence and Investigation 2002 PTD 632; The Presiding Officer v. Sadruddin Ansari and others PLD 1967 SC 569; Murree Brewery Co. Ltd. v. Pakistan and 2 others PLD 1972 SC 279; Lt.-Col. Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty and 2 others PLD 1961 SC 119; Nagina Silk Mill, Lyallpur v. The Income Tax Officer and another PLD 1963 SC 322; Gatron (Industries) Limited v. Government of Pakistan and others 1999 SCMR 1072; Khalid Mehmood v. Collector of Customs 1999 SCMR 1881; Punjab Small Industries Corporation v. Ahmad Akhtar Cheema 2002 SCMR 549 and Mir Zaman v. Mst. Sheda and 58 others 2000 SCMR 1699 ref.

Muhammad Azhar for Petitioner.

Ch. Sagheer Ahmad for Respondents.

Date of hearing: 19th June, 2006.

JUDGMENT

SYED ASGHAR HAIDER, J.---The Multan Cantonment Board rented out/auctioned certain properties belonging to it, located at Metro Plaza and Mall Shopping Centre Cantonment by public bidding during the year 1990-91, 1991-92, 1993-94, 1995-96, 1996-97, 1997-98, 1999-2000. According to respondent No.5 the Board was required to collect tax under section 50(7-A) of the Repealed Income Tax Ordinance, 1979. The issue was raised with the Board, but they refused to pay the tax pleading that shops were rented out and not auctioned. Thus, it was treated as "assessee in default" in terms of section 52 of the Ordinance and the liability was determined for 3247 days (January, 1990 to December, 1998) and Rs.25,54,548 were assessed in this context, recovery was made to the extent of Rs.19,28,580 from the account of the Board. The Board termed this action as illegal and made representations to the higher authorities and also filed an appeal before the Commissioner of Income Tax (Appeals), the Commissioner set aside the findings and directed that de novo proceedings be made in this context. The petitioners feeling not satisfied with this order filed an appeal with the Income Tax Appellate Tribunal, Lahore, which affirmed the findings of the Commissioner. The petitioner thereafter filed a reference application with the Income Tax Tribunal requesting that legal issues were involved as such the matter be referred to this Court for adjudication, later this application was withdrawn. Pursuant thereto the matter was agitated before respondent No.5, who vide consolidated order dated 25-6-2003, assessed the petitioner liable for payment. Aggrieved thereof the petitioner has filed the present petition.

2. Learned counsel for the petitioner contended that the assessment has been wrongly made in the name of the Cantonment Executive Officer, Multan, who is a civil servant belonging to Pakistan Military Lands and Cantonment Service and acts only as Cantonment Executive Officer of the Board, whereas the respondent had cause, if any, against the Cantonment Board. Therefore, the entire proceedings are illegal: He further submitted that all contracts in this context were sighed by the President/Vice-President and the petitioner has no nexus with it in personal capacity. Learned counsel also submitted that the Board has leased the properties and not sold them, therefore, the provisions of section 50(7-A) of the Ordinance are not applicable to it, other issues which were argued related to forcible deduction of tax from the Board's account, through coercive measures, the liability was assessed without associating the Board and was based on a number of years, illegally through a mechanical order, violating the directions issued by the Commissioner of Income Tax and the Tribunal. Much emphasis was laid on the fact that the entire assessment to the extent of Rs.25,54,548 is without substance and proof and likewise the coercive recovery to the extent of Rs.19,28,580 is illegal. Learned counsel has relied on Messrs Kamalia Sugar Mills Ltd., Kamalia v. Superintendent, Intelligence and Investigation 2002 PTD 632, The Presiding Officer v. Sadruddin Ansari and others PLD 1967 SC 569, Murree Brewery Co. Ltd. v. Pakistan and 2 others PLD 1972 SC 279, Premier Cloth Mills Ltd. Lyallpur v. The Sales Tax Officer and another 1972 SCMR 257, Usmania Glass Sheet Factory v. Sales Tax Officer PLD 1971 SC 205, Lt.-Col. Nawabzada Muhammad Amir Khan v. The Controller of Estate Duty and 2 others PLD 1961 SC 119, Chairman, Central Board of Revenue, Islamabad and 3 others v. Messrs Pak-Saudi Fertilizers Ltd. 2001 SCMR 777, Nagina Silk Mill, Lyallpur v. The Income Tax Officer and another PLD 1963 SC 322 and Gatron (Industries) Limited v. Government of Pakistan and others 1999 SCMR 1072.

3. Learned counsel for the respondents submitted that parawise comments clearly reflect that the present petition is barred and not maintainable. He further submitted that the petitioner has chosen a forum and, therefore, he cannot now be granted the luxury of filing the constitutional petition on the same subject. He has very emphatically raised objection to the maintainability of the present petition and has relied on the judgments reported as Mst. Kaniz Fatima through Legal Heirs v. Muhammad Saleem and 27 others 2001 SCMR 1493, Khalid Mehmood v. Collector of Customs 1999 SCMR 1881, Punjab Small Industries Corporation v. Ahmad Akhtar Cheema 2002 SCMR 549 and Mir Zaman v. Mst. Sheda and 58 others 2000 SCMR 1699.

4. I have heard the learned counsel and also perused the impugned order, which clearly reflects that the assessment has been made for the years 1990-91, 1991-92, 1993-94, 1995-96, 1996-97, 1997-98, 1999-2000, it is also decipherable that assessment has been made in a consolidated manner (although the impugned order of assessment reflects year-wise tax liability and payment received). The learned counsel for the petitioner stated that a sum of Rs. 19,28,580 was forcibly recovered by the respondents from the petitioner's bank, question arises as to whether the tax had been paid year-wise or was it calculated in unison and forcibly recovered. This needs a thorough inquiry, and appraisal of evidence, which is not possible in the present jurisdiction.

5. Likewise the impugned order also reflects that Cantonment Executive Officer, Multan Cantonment Board is the assessee, this presumption is not correct, the Cantonment Board is a legal, juristic entity and therefore, has an independent status. Learned counsel for the petitioner has clearly distinguished between the Cantonment Board and the Executive Officer, this issue cannot be brushed aside so lightly as valuable rights of the parties are involved and it is a question of law and fact, which impacts the issuance of very notice, therefore, it would be only fair to permit the parties to substantiate their claim with reasons and evidence, thus, the respondent has to re-assess the matter and determine as to whether the Cantonment Board and the Executive Officer are the same identities or not, this also needs detailed appraisal of evidence and adjudication.

6. It is also evident from the record that the proceedings conducted by respondent No.5 were not in accordance with the directions given by the Commissioner of Income Tax and the Appellate Tribunal, it is an unalienable right of the petitioner to be heard and also that all legal and factual objections raised by him should be adjudicated and decided in accordance with law.

7. Thus, it is clear that the proceedings conducted by respondent No.5 were not in consonance with law or for that matter even procedure. The petitioner raised fundamental legal issues and questions, which were not adjudicated by respondent No.5. It is therefore, essential that these matters be looked into identified and thereafter be adjudicated and decided in accordance with law and legal principles.

8. The next important question which needs to be adjudicated is whether a constitutional petition is maintainable or not ordinarily the bar raised by the respondents should have non-suited the petitioner, but here the circumstances are totally different. The petition arises of an order which is illegal, not only on the legal plane but is also violative of the directions issued by the income tax authorities themselves, thus, it is without jurisdiction. Therefore, it cannot sustain, this illegality eminently justifies intervention by this Court as it has jurisdiction to correct and rectify errors of law.

9. In this context I am fortified by Murree Brewery Co. Ltd. v. Pakistan and 2 others PLD 1972 SC 279, Premier Cloth Mills Ltd. Lyallpur v. The Sales Tax Officer and another 1972 SCMR 257, Chairman, Central Board of Revenue, Islamabad and 3 others v. Messrs Pak-Saudi Fertilizers Ltd. 2001 SCMR 777 and Mst. Kaniz Fatima through Legal Heirs v. Muhammad Saleem and 27 others 2001 SCMR 1493, the Honourable Supreme Court of Pakistan observed as under:---

"Art. 199---Constitutional jurisdiction, invoking of-Pre conditions-Scope-Paramount consideration in exercise of constitutional jurisdiction is to foster justice and right a wrong---Before a person can be permitted to invoke the discretionary power of a Court, it has to be shown that the order sought to be set aside has occasioned some injustice to the parties---Where the order does not work any injustice to any party, rather the order cures a manifest illegality, then the extraordinary jurisdiction should not be allowed to be invoked".

Resultantly, this petition is allowed, the impugned order dated 25-6-2003, is set aside and the proceedings are remanded to respondent No.5 with the direction to associate the petitioner with the proceedings and address all questions of law and facts raised by the petitioner and thereafter decide the matter on merits in accordance with law. No order as to costs.

F.B./C-31/LCase remanded.