T.A. INDUSTRIES through Proprietor VS FEDERATION OF PAKISTAN through Secretary, Finance Ministry of Finance, Government of Pakistan, Islamabad, 2008 PTD-LAHORE-HIGH-COURT-LAHORE 1563 (2008)

(a) Interpretation of Statutes---

----Fiscal statute---Fiscal laws are to be interpreted and applied in their natural meanings---In case of doubt about charging provision, beneficiary is the assessee and in case of an exemption provision the benefit goes to State---Where, however, the language of law is clear and without any ambiguity, the principle of interpretation, in case of doubt, is not relevant.

Dawood Hercules Chemicals Ltd. v. Collector of Sales Tax, Lahore 2007 PTD 1161 and Messrs Sterling Engineering Corporation v. The Collector of Customs, Karachi and another PLD 1986 Kar. 211 ref.

(b) Income Tax Ordinance (XLIX of 2001)---

---Ss. 153(6-A), (6-B) 53 & Second Sched., Part IV, Cls. (46-A), (46-B)---General Clauses Act (X of 1897), S.24A---S.R.O. 847(I)/2007 dated 22-8-2007---Constitution of Pakistan (1973), Art.199---Constitutional petition---Payments for goods and services---Refusal to grant exemption certificate---Interpretation, scope and application of S.153(6-A), Income Tax Ordinance, 2001 and effect of S.R.O. 847(I)/2007, dated 22-08-2007 elaborated---Refusal to grant exemption certificate was a result of misreading and non-reading of the relevant provision of law which was against the settled principle that every word and sentence used by the legislature had to be given meaning and significance and thus was illegal and of no legal effect---S.R.O. 847(I)/2007, dated 22-8-2007 also being without any lawful authority was void and of no legal effect---Directions given in the present case shall apply in respect of all constitutional petitions being on the basis of similar and same circumstances.

The provision of law in terms of section 153(6A) of the Income Tax Ordinance, 2001 leaves no doubt that it is in respect of `manufacturers' only. The term `any' used before `manufacturer' further enlarges its scope and the same means `all'. Phrase "any person being a manufacturer" leaves no doubt that all the manufacturers can avail the benefit of this provision. Section 153(6B), which has been inserted by the Finance Act, 2007, in fact has not curtailed or reduced or superseded earlier provisions. It is an independent provision of law and its language makes clear that it is applicable only on the `persons', who are dealing in goods. It does not have any reference to manufacturers in any form whatsoever. For all practical purposes, it has enhanced the scope of the provision of section 153(6A). It has further excluded, in addition to manufacturers, the local traders, who though are not manufacturers but are doing the business of sale as individual or an association of persons. This is an addition through this. .new clause in the said facility and the same has not curtailed the powers available in the earlier section.?

The issue became complicated when Central Board of Revenue, through a Notification dated 22nd August, 2007, under S.R.O.847(I)/ 2007, inserted clauses, in terms of clauses (46A) & (46B) in Part-IV of Second Sched. clause (46A) says that the provisions of subsection (6B) of section 153 shall not apply to any payment received by a manufacturer of iron and steel products relating to sale of goods manufactured by him. This Notification in addition of the provision is for the reason of some misconception in the minds of Central Board of Revenue. Section 153(6B) does not deal with manufacturers at all. There is, therefore, no question of providing any exemption to manufacturers of iron and steel from the charge created under section 153(6). The Central Board of Revenue could provide such benefit if earlier there was a charge thereon, However, since exemption has already been given by the provision i.e. section 153(6A), which is dealing with all the manufacturers clearly and unequivocally, further exemption to only iron and steel manufacturers is like bringing to charge the other manufacturers, which is beyond the jurisdiction of Federal Board of Revenue. It is a clear case of misunderstanding of the provisions of law. Similarly clause (46B) speaks of non-application of section 153(6B) on manufacturers if they are individual or Association of persons while it has nothing to do with manufacturers. Both the provisions of subsections of section 153 are separate and independent and are not interconnected at all. Moreover, the earlier deals with `manufacturers' and the later deals with `traders'. There was, therefore, no need of issuance of notification like the one referred above. Since the said notification has been issued by misunderstanding, it shall not have any effect being without any lawful authority. This is where reference to section 53(2) shall be of help.?

Section 53(2) Income Tax Ordinance, 2001 grants power to the Federal Government to issue Notification in the official Gazette and make amendments in the Second Schedule by adding any clause or condition therein or omitting any clause or condition therein or to make any changes in any clause or conditions therein, as Government thinks fit. Thus Federal Government does have the power to amend the Second Schedule by addition or omission and thus is delegated with the legislation power to the said extent. The purpose of this delegation is to reduce the rigours of law by way of addition in the Second Schedule wherever need arises. Similarly, the Federal Board of Revenue is entitled to omit any clause or condition that has provided exemption in the Second Schedule. For all practical purposes, the Federal Government does have the power to issue or withdraw an exemption in the Second Schedule. Through notification under the garb of providing an exemption in the Second Schedule, the Federal Board of Revenue in its understanding has reduced the effect of the provision of section 153(6A) while practically it has curtailed the effects of section 153(6A) and has increased the application of section 153(6). Section 153(6A) makes the provision of section 153(6) inapplicable to all the manufacturers while clause (46A) makes it applicable only to manufacturers of iron and steel products. Thus the power exercised was not within the lawful authority available to the Federal Government. Again, through clause (46B) the Federal Government has made the provision of section 153(6B) as inapplicable in respect of individual or association of persons being manufacturer of such goods while said section does not deal with manufacturers at all. This Notification, therefore, is based upon misunderstanding and misapplication of the relevant provisions of law.

Maxim: "Delegatus non potest delegare", means "when a power is conferred on a particular person then that person could neither transfer its exercise to another person nor could exercise it without application of his mind to facts and circumstances of that case---Such person has to exercise that power with application of his independent mind to the facts and circumstances of that case regardless of any extraneous/dictative influence".?

The direction in S.24-A, General Clauses Act, 1897 is binding on all the authorities. Seen from the angle that whether the authority available to the Commissioner of Income Tax while rejecting the application for issuance of exemption certificate as well as issuance of the S.R.O. No.847(I)/2007 has been exercised 'reasonably', `fairly', 'justly' and for the advancement of the purpose of the enactment, the answer shall readily be an empathetic "No". Neither section 153(6A) speaks of any discrimination amongst the manufacturers nor in section 153(6B), any reference of subsection (6A) of section 153 is appearing. Both the sections have separately made the provision of subsection (6) of section 153 inapplicable firstly on suppliers who have manufactured the said goods and to sellers of goods if they are individuals or an Association of persons, respectively.?

The power available with the Federal Government is to add any clause or condition or omit any clause or condition in the Second Schedule but that obviously cannot be allowed if the same is in conflict with the main provision. The deduction under the provision of section 153(6) has been made as a final discharge, which means the assessee shall neither be required to pay any tax in addition to the amount deducted in his case nor he shall be exposed to the rigours of audit and assessment etc. In its subsequent subsections i.e. 6A & 6B, respectively, exemption from this final discharge has been given. In subsection (6A), subsection (6) has been made inapplicable by saying that the provisions of subsection (6) relating to the payment on account of supply of goods in respect of a person, who is manufacturer of such goods, shall not apply. This exception from subsection (6), 'above, is, therefore, applicable to any person, who is a manufacturer and supplier of any item. Regarding subsection (6B) here again, reference is to subsection (6) and not to subsection (6A). In the second line the provision reads "so far as they relate to payments on account of sale of goods" wherefrom the phrase `manufacturer' is being read by the departmental official is not understandable. This new additional clause, in addition to subsection (6A), makes subsection (6) inapplicable to individuals and association of persons, who are in the business of local purchase and sale of goods of any kind. The contention that subsequent legislation supersedes earlier, if accepted,' would mean that only the last clause of last section would apply. This obviously cannot be the intention of law makers. Subsequent legislation on the same subject would, by necessary implication, repeal the earlier law to the extent of mutual inconsistency or repugnancy. The fact of the matter is that sections 153(6A) and 153(6B) are two separate and independent provisions being in respect of manufacturer and trader and there is no mutual inconsistency in the two provisions.?

The refusal to grant exemption certificate for the reasons mentioned in the letter is a result of misreading and non-reading of the concerned provisions of law. This action is against the settled principle that every word and sentence used by legislature has to be given meaning and significance, hence the same was held to be as illegal and of no legal effect. The Notification, through an S.R.O. also being without any lawful authority, was held to be void and of no legal effect. The, above direction shall apply in respect of all the writ petitions being on the basis of similar and same circumstances.?

Shahbaz Ahmad Butt, Javed Iqbal Qazi and Qari Habib-ur-Rehman Zubairi for Petitioners.

Shahid Jamil, for Respondent-Department.

Muhammad Nawaz Waseem, Federal Counsel.

Jan Muhammad Chaudhry, Advocate.

Dates of hearing: 7th and 9th May, 2008.

JUDGMENT

KH. FAROOQ SAEED, J.---By this single judgment, I propose to dispose of Writ Petitions Nos.7918 of 2007, 7252 of 2007, 7253 of 2007, 7256 of 2007, 7257 of 2007, 7258 of 2007, 7394 of 2007, 7396 of 2007 and 10483 of 2007, as in these writ petitions combined questions of law and fact are involved. These are basically against the rejection of the petitioners' applications for issuance of exemption certificate, which they claimed under the provisions of section 153(6A) of the Income Tax Ordinance, 2001.

2. The department's point of view, is that the petitioner though manufacturers are not covered, within the provision of section 153(6A) by virtue of insertion of section 153(6B) of the Income Tax Ordinance, 2001, through Finance Act, 2007. The said provision says that in the case of an individual and Association of persons, the tax deducted at source on sale of goods shall not be a final discharge of its liability.

3. From the petitioners' side, it has been argued that section 153(6A) is independent from section 153(6B) and the provisions are not mutually exclusivity. Section 153(6A) deals with `manufactures' while section 153(6B) deals with `traders' being on `sale of goods'. The legislative intent, therefore, cannot be defeated by virtue of any interpretation or by an authority under the subordinate legislative power.

4. Mr. Shahbaz Butt, Advocate, who was a counsel in writ petition No.7918 of 2007, narrated the history of the said legislation and later argued that the Central Board of Revenue does not have the power to legislate or interpret a provision of law in the manner that it gives a different meaning than the main legislation. It can only issue an administrative instruction but cannot proceed to interpret the provisions of law so as to defeat the legislative intent. Furthermore, that the instructions by an administrative authority against the express provision of law cannot be implied to the detriment of a taxpayer. Moreover, that the executive interpretation of a statute is to be ignored if there is judicial interpretation of such statutes by Court holding field. The judgments relied upon by him in support of above arguments are "Kamran Khan v. Federation of Pakistan through Secretary Finance, Islamabad and 2 others" reported as 2002 PTD 1510, "Commissioner of Income Tax v. Mst. Kamal Asghar" reported as 2005 PTD 50 and "Messrs Duty Free Shop Ltd. v. Central Board of Revenue and others" reported as 2002 PTD 1167 (Karachi High Court). Learned counsel also referred famous case of "Central Insurance Co. and others v. Central Board of Revenue, Islamabad, etc." reported as 1993 SCMR 1232 wherein the Hon'ble august Court has held in unequivocal terms that the Central Board of Revenue does not have any place in judicial hierarchy. Its interpretation even through circular can at best be treated as an administrative but not a judicial interpretation. Similarly in "Cynamid Pakistan Ltd. v. Collector of Customs, S.T. and C.E." reported as 2006 PTD 1902 same view have been expressed.

5. Mr. Javed Iqbal Qazi, Advocate, adopted the arguments of his colleague and referred few other judgments on the issue including "Darya Khan v. Central Board of Revenue, Islamabad, through Chairman and 3 others" reported as PTCL 1995 CL 405, "State and another v. Sajjad Hussain and others" reported as 1993 SCMR 1523, Emirates Bank International Ltd. v. Messrs Osman Brothers and others" reported as PLD 1998 Karachi 338, "Collector of Customs (Appraisement), Karachi and others v. Messrs Abdul Majeed Khan and others" reported as 1977 SCMR 371, "Avari Hotel Ltd. v. Collector of Sales Tax and 3 others" reported as 2000 PTD 3765, Commissioner of Income Tax v. Muhammad Kassim" reported as 2000 PTD 280, "Dawood Hercules Chemicals Ltd. v. Collector of Sales Tax, Lahore" reported as 2007 PTD 1161 and "Messrs Sterling Engineering Corporation v. The Collector of Customs, Karachi and others" reported as PLD 1986 Karachi 211. The above judgments are also basically on the same issue that the interpretation by an administrative authority even if placed at the higher administrative hierarchy cannot' be used for interpretation of a provision of law if there is any other interpretation by a judicial authority. The Courts are to look the words of the statutes and interpret them in the light of what is clearly expressed. Nothing should be considered as superfluous of surplusage and where two constructions are possible, one favourable to the assessed shall be adopted. He added that Central Board of Revenue (now Federal Board of Revenue) is undoubtedly the highest administrative forum of the country in Tax hierarchy. However, its interpretations have no binding force on judicial authorities. Sections 153(A) and 153(B), both are independent and interpretation of the Federal Board of Revenue through S.R.O.847(I)/2007 amounts to legislation, which power is not available to it. The other learned counsel adopted the arguments of their colleagues.

6. Learned Legal Advisor, on his turn, contends that the petitioners have tried to read the provision as per their own convenience. The law that the subsequent provision should be read in supersession to the earlier is settled one. Section 153(6B) having come after section 153(6A) in its sequence supersede the earlier law. Not only that it excludes "individual and association of persons' from the provisions of section 153(6A) but it also narrates that the deduction thereon is not a final discharge. He further argued that the Central Board of Revenue has full power to legislate through the delegated legislative authority given to it under section 53(2) of the Income Tax Ordinance, 2001. In his opinion, the amendments and insertions made by the Central Board of Revenue through the said power is of equal strength as that of the legislature. Referring section 153(9), he said that the same defines "prescribed person" as is mentioned in section 153(6A) and it includes the person, who is to make payment on account of any supply. However, on pointing out that it refers to the withholding agent and not a supplier of goods, he moved on to his next arguments. He, however, emphasized that firstly; section 153(6B) supersedes section 153(6A) and secondly; by virtue of its application, the manufacturers can opt for exemption only if their status is otherwise than the `individual' or an association of persons.'

7. Before giving findings, recapitulating facts shall be of help. The impugned order under section 153 issued by Commissioner of Income Tax, Zone-A, Lahore, reads as following manner:-

Name and Address of the taxpayer.????????????????? Messrs T.A. Industries, 417-Gulistan Block, Allama Iqbal Town, Lahore

Name Tax No.??????????????????????????????????????????????? 21-11-1423306-1

Order under section 153 of the Income Tax Ordinance, 2001

The taxpayer, an individual, deriving income form manufacturing of Bleaching clay had applied for issuance of exemption certificate under section 153 of the Income Tax Ordinance, 2001, which was issued for the period upto 30-6-2008 vide this office No. 5597/J, dated 29-6-2007.

Subsequently by virtue of insertion of subsection (6B) of section 153 of the Income Tax Ordinance, 2001 (through Finance Act, 2007), it has been observed that the tax deductible on sale of goods is discharge of the final tax liability in the case of an individual and AOP being a manufacturer.

The taxpayer was confronted on the above vide this office letter No.382/J, dated 25-7-2007. In response, the taxpayer filed a written reply vide his letter, dated 30-7-2008. The relevant portion of the same is reproduced below:

"There is no dispute or disagreement that the matter involves around the interpretation of subsection (6) through sub-section (6B) of section 153 of the Income Tax Ordinance, 2001. A plain reading of the above provisions suggest that prior to the amendments introduced through the Finance Act, 2007 the position was that all manufacturers, corporate or otherwise, were outside the ambit of the final tax regime provided for in section 153 of the Income Tax Ordinance, 2001 and as such the final tax regime was restricted only to all taxpayer engaged in the trading business.

In this background, the issue which requires consideration is to determine the extent of the amendment introduced through the Finance Act, 2007. The answer to this proposition is simple and straight forward. The recently amended provision should be read to exclude, to the extent mentioned therein, what is otherwise covered within the provisions of subsection (6). There is no possibility of going beyond this extent. In other words, the effect of amendment is that now the final tax regime is not applicable on persons, other than individuals and AOPs, even on the trading business.

If the amendment is read in a manner proposed by you then there would arise a conflict between subsection (6A) and subsection (6B) which is not permissible under the established principles of statute interpretation whereby this is well settled by now that different provisions should be read to bring harmony amongst them rather than giving rise to repugnancy and conflicts."

Reply furnished by the taxpayer cannot be accepted on the ground that as per subsection (6B) of section 153 of the Income Tax Ordinance, 2001, the application of subsection (6A) has been restricted to corporate manufacturers only and tax deductible on sale of goods is discharge of final tax liability in the case of an individual and AOP being a manufacturer.

In view of foregoing facts, the taxpayer is not entitled to issuance of exemption certificate under section 153 of the Income Tax Ordinance, 2001. Thus the exemption certificate under section 153 of the Income Tax Ordinance, 2001 vide this office No. 5597/J, dated 29-9-2007 merits cancellation. This is ordered accordingly.

(Sd.)

?? (Raana Mirza)

Commissioner of Income Tax

??? Zone-A, Lahore

Date ________/2007

Copy to:--

1. The RCIT, Eastern Region, Lahore.

2. The Taxpayer.

(Ijaz Ahmad)

???? Special Assistant to

Commissioner of Income Tax

????? Zone-A, Lahore

8. This is where reproduction of the provisions, which are relevant to the issue, shall be of help, the same reads as follows:--

(153). Payments for goods and services.--(1) Every prescribed person making a payment in full or part including a payment by way of advance to a resident person or permanent establishment in Pakistan of a non-residential person.

(a) for the sale of goods;

(b) of the rendering of [or providing of] [ ] services;

(c) on the execution of a contract, other than a contract for the [sale] of goods or the rendering of [or providing of] [ ] services,

shall, at the time of making the payment, deduct tax from the gross amount payable at the rate specified in Division III of Part-III of the First Schedule.

(6) The tax deducted under this section shall be a final tax on the income of a resident person arising from transactions referred to in [******]of subsection (1) [and (1A)]:

[(6A) The provisions of subsection (6) in so far as they relate to payments on account of supply of goods from which tax is deductible under this section shall not apply in respect of any person being a manufacturer of such goods. The provision of this subsection shall be deemed always to have been so enacted and shall have had effect accordingly.]

[(6B) The provisions of subsection (6) in so far as they relate to payments on account of sale of goods from which tax is deductible under this section shall apply. on account of an individual and AOP. This subsection shall be applicable from tax year, 2007].

9. Apparently, the above two provisions are clear in their meanings, however, the learned Commissioner of Income Tax while interpreting the provisions has totally ignored the language of the two provisions, above. This is a case of total misapplication of law.

10. The matter in fact complicated when an S.R.O. was issued by the Member (Direct Taxes)/Additional Secretary (Mr. Suleman Nabi), through S.R.O. No.847(I)/2007, dated 22nd August, 2007, through which two amendments shave been introduced in Part IV of the Second Schedule. For ready reference, the notification is also reproduced along with the amendment brought therein:

Government of Pakistan

(Revenue Division)

Central Board of Revenue

Islamabad, the 22nd August, 2007.

Notification

(Income Tax)

S.R.O. 847(I)/2007.---In exercise of the powers conferred by subsection (2) of section 52 of the Income Tax Ordinance, 2001 (XLIX of 2001), the Federal Government is pleased to direct that the following further amendment shall be made in the Second Schedule to the said Ordinance, namely:--

In the aforesaid Schedule, in Part IV, after clause (46), the following new clauses shall be inserted, namely:

"(46A) the provisions of subsection (6B) of section 153 shall not apply to any payment received by a manufacturer of iron and steel products relating to sale of goods manufactured by him.

(46B) the provisions of subsection (6B) of section 153, in o far as they relate to payments on account of sale of goods from which tax is deductable under section 153, shall not apply in respect of an individual or association of persons being a manufacturer of such goods, for the tax year 2007".

???? (Suleman Nabi)

Member (Direct Taxes)

?Additional Secretary

11. Interpretation of fiscal statute is no more a debatable issue. It is now almost settled that fiscal laws are to be interpreted and applied in their natural meanings and in this regard, various judgments of this Court as well as of the superior Courts have already been mentioned above while discussing the arguments of the petitioner's side like 2007 PTD 1161 re: "Dawood Hercules Chemicals Ltd. v. Collector of Sales Tax, Lahore" and PLD 1986 Karachi 211 re: "Messrs Sterling Engineering Corporation v. The Collector of Customs, Karachi and another". Furthermore, in case of doubt for a charging provision the beneficiary is the petitioner and in case of an exemption provision the benefit goes to State is also almost settled. However, since the language of law is clear and without any ambiguity, the principle of interpretation in case of doubt is not relevant in the present case.

12. The provision of law in terms of section 153(6A) leaves no doubt that it is in respect of `manufacturers' only. The term `any' used before `manufacturer' further enlarges its scope and I tend to agree with Mr. Shahbaz Butt, Advocate that the same means `all'. Reference to various dictionary meanings by him, is relevant. Phrase "any person being a manufacturer" leaves no doubt that all the manufacturers can avail the benefit of this provision. Section 153(6B), which has been inserted by the Finance Act, 2007, in fact has not curtailed or reduced or superseded earlier provisions. It is an independent provision of law, its language makes clear that it is applicable only on the `persons', who are dealing in goods. It does not have any reference to manufacturers in any form whatsoever. For all practical purposes, it has enhanced the scope of the provision of section 153(6A). It has further excluded, in addition to manufacturers, the local traders, who though not manufacturers but are doing the business of sale as individual or an association of persons. This is an addition through this new clause in the said facility and the same has not curtailed the powers available in the earlier section.

13. As mentioned earlier, the issue became complicated when Central Board of Revenue, through a Notification dated 22nd August, 2007, under S.R.O.847(I)/2007, inserted the aforementioned clauses, in terms of clauses (46A) & (46B) in Part IV of Second Schedule (supra). Clause 46A says that the provisions of subsection (6B) of section 153 shall not apply to any payment received by a manufacturer of iron and steel products relating to sale of goods manufactured by him. This Notification in addition of the provision is for the reason of some misconception in the minds of Central Board of Revenue. Section 153(6B) does not deal with manufacturers at all. There is, therefore, no question of providing of any exemption to manufacturers of iron and steel from the charge created under section 153(6), The Central Board of Revenue could provide such benefit if earlier there was a charge thereon. However, since exemption has already been given by the provision i.e. section 153(6A), which is dealing with all the manufacturers clearly and unequivocally, further exemption to only iron and steel manufacturers is like bringing to charge the other manufacturers, which is beyond the jurisdiction of Federal Board of Revenue. It is a clear case of misunderstanding of the provisions of law. Similarly clause (46B) speaks of non-application of section 153(6B) on manufacturers if they are individual or Association of Persons while it has nothing to do with manufacturers. The arguments of learned Legal Advisor that the judgment of Elahi Cotton Mills holds that the subsequent law overrides the earlier law, is also of no help. As already mentioned, both the provisions of subsections of section 153 (surpa) are separate and independent and are not interconnected at all. Moreover, the earlier deals with `manufacturers' and the later deals with `traders'. There was, therefore, no need of issuance of notification like the one referred above. One can agree with the petitioners that since the said notification has been issued by misunderstanding, it shall not have any effect being without any lawful authority. This is where reference to section 53(2) shall be of help. The same reads as follows:

"53(2) The Federal Government may, from time to time, by notification in the official Gazette, make such amendment in the Second Schedule by:--

(a) adding any clause or condition therein;

(b) omitting any clause or condition therein; or

(c) making any change in any clause or condition therein, as the Government may think fit, and all such amendments shall have effect in respect of any tax year beginning on any date before or after the commencement of the financial year in which the notification is issued.

14. The above provision grants power to the Federal Government to issue Notification in the official Gazette and make amendments in the Second Schedule by adding any clause or condition therein or omitting any clause or condition therein or to make any changes in any clause or conditions therein, as Government thinks fit. Thus Federal Government does have the power to amend the Second Schedule by addition or omission and thus is delegated with the legislation power to the said extent. The purpose of this delegation is to reduce the rigours of law by way of addition in the Second Schedule wherever need arises. Similarly, the Federal Board of Revenue is entitled to omit any clause or condition that has provided exemption in the Second Schedule. For all practical purposes, the Federal Government does have the power to issue or withdraw an exemption in the Second Schedule. Owing to the said parameters we now look into the S.R.O. issued by the Federal Board of Revenue (supra). Through this notification under the garb of providing an exemption in the Second Schedule, the Federal Board of Revenue in its understanding has reduced the effect of the provision of section 153(6A) while practically it has curtailed the effects of section 153(6A) and has increased the application of section 153(6). Section 153(6A) makes the provision of section 153(6) inapplicable on all the manufacturers while clause 46(A) makes it applicable only on manufacturers of iron and steel products. Thus the power exercised was not within the lawful authority available to the Federal Government. Again, through Clause (46B) the Federal Government has made the provision of section 153(6B) as inapplicable in respect of individual or association of persons being manufacturer of such goods while said section does not deal with manufacturers at all. This Notification, therefore, is based upon misunderstanding and misapplication of the relevant provisions of law. Reliance of this Court is on 1995 CLC 369 in the case of Muhammad Yousaf Ali Shah v. Federal Land Commission, Government of Pakistan. This Court while deciding a similar issue relied upon the maxim "Delegatus non potest delegare", which means "when a power is conferred on a particular person then that person could neither transfer its exercise to another person nor could exercise it without application of his mind to facts and circumstances of that case---Such person has to exercise that power with application of his independent mind to the facts and circumstances of that case regardless of any extraneous/dictative influence".

15. Another guiding principle for exercising such an authority is provided in section 24A of the General Clauses Act, 1897. The same also is reproduced being simple and clear in its meanings:--

"[24A. Exercise of power under enactment.---(1) Where, by or under any enactment, a power to make any order or give any direction is conferred on any authority, office or person .such power shall be exercised reasonably, fairly, justly and for the advancement of the purposes of the enactment.

(2) The authority, office or person making any order or issuing any direction under the power conferred by or under any enactment shall, so far as necessary or appropriate, give reasons for making the order or, as the case may be, for issuing the direction and shall provide a copy of the order or, as the case may be, the direction to the person affected prejudicially."

16. The direction in the above terms is binding on all the authorities. Seen from all the angles that whether the authority available to the Commissioner of Income Tax while rejecting the application for issuance of exemption certificate as well as issuance of the S.R.O. No.847(I)/2007 has been exercised `reasonably', `fairly', `justly' and for the advancement of the purpose of the enactment, the answer shall readily be an empathetic "No" Neither section 153(6A) speaks of any discrimination amongst the manufacturers nor in section 153(6B), any reference of subsection (6A) of section 153 is obtaining. Both the sections have separately made the provision of subsection (6) of section 153 inapplicable firstly on suppliers who have manufactured the said goods and to sellers of goods if they are individuals or an Association of persons, respectively.

17. The power available with the Federal Government is to add any clause or condition or omit any clause or condition in the Second Schedule but that obviously cannot be allowed if the same is in conflict with the main provision. The deduction under the provision of section 153(6) has been made as a final discharge, which means the assessee shall neither be required to pay any tax in addition to the amount deducted in his case nor he shall be exposed to the rigours of audit and assessment etc. In its subsequent subsections i.e. 6A & 6B, respectively, exemption from this final discharge has been given. In subsection (6A), subsection (6) has been made inapplicable by saying that the provisions of subsection (6) relating to the payment on account of supply of goods in respect of a person, who is manufacturer of such goods, shall not apply.. This exception from subsection (6), above, is, therefore, applicable to any person, who is a manufacturer and supplier of any item. Regarding subsection (6B) here again, reference is to subsection (6) and not to subsection (6A). In the second line the provision reads "so far as they relate to payments on account of sale of goods" wherefrom the phrase `manufacturer' is being read by the departmental official is not understandable. This new additional clause, in addition to subsection (6A), makes subsection (6) inapplicable to individuals and association of persons, who are in the business of local purchase and sale of goods of any kind. The contention of learned Legal Advisor that subsequent legislation supersedes earlier if accepted, would mean that only the last clause of last section would apply. This obviously cannot be his intention. Subsequent legislation on the same subject would, by necessary implication, repeal the earlier law to the extent of mutual inconsistency or repugnancy (Emphasis added). Re: Muhammad Yusuf Ali Shah (supra) and Ilahi Cotton Mills (supra). The fact of the r utter is that sections 153(6A) and 153(6B) are two separate and independent provisions being in respect of manufacturer and trader and there is no mutual inconsistency in the two provisions.

18. The upshot of the above discussion, therefore, is obvious. The refusal to grant exemption certificate for the reasons mentioned in the letter is a result of misreading and non-reading of the concerned provisions of law. This action is against the settled principle that every word and sentence used by legislature has to be given meaning and significance re: Emirates Bank International Ltd. v. Messrs Osman Brothers and others (supra), hence the same is held to be as illegal and of no legal effect. The Notification, through an S.R.O. also being without any lawful authority, is held to be void and of no legal effect. The above direction shall apply in respect of all the writ petitions being on the basis of similar and same circumstances.

19. All the writ petitions, therefore, are allowed in the above terms.

M.B.A. /T-15/L?????????????????????????????????????????????????????????????????????????????????? Petitions allowed.