COMMISSIONER OF INCOME TAX, FAISALABAD ZONE, FAISALABAD VS AKHLAQ CLOTH HOUSE, FAISALABAD
2008 P T D 965
[Lahore High Court]
Before Sayed Zahid Hussain, C.J. and Ali Akbar Qureshi, JJ
COMMISSIONER OF INCOME TAX, FAISALABAD ZONE, FAISALABAD and another
Versus
AKHLAQ CLOTH HOUSE, FAISALABAD and another
I.C.A. No.296 of 2004 in Writ Petition No.17565 of 2003, heard on 20/02/2008.
Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---
----S. 32---Establishment of Office of Wafaqi Mohtasib (Ombudsman) Order (I of 1983), Art.32---Law Reforms Ordinance (XII of 1972), S.3---Intera-Court Appeal---Personal hearing by the President---Scope---Representation against order of Federal Tax Ombudsman were accepted by the President---High Court set aside the order passed on representation on the ground that the same was decided and accepted by the President without affording opportunity of personal hearing to parties concerned---Validity---Where person/party concerned had notice/opportunity of filing comments/reply to the representation, the decision of the President could not be annulled simply for the reason that personal/oral hearing was not afforded---Where, however, the person/party concerned had no notice/opportunity of filing comments or reply and decision was made without affording such opportunity, the representation needed to be reconsidered and decided after notice and affording opportunity of filing reply/comments to the same---Respondents having had the opportunity of filing reply to the representation which was decided through a speaking order, no interference was warranted with the order in exercise of Constitutional jurisdiction---Division Bench of High Court set aside the order passed by Single Judge of High Court---Intra-court appeal was allowed in circumstances.
Federation of Pakistan through Secretary, Establishment Division Government of Pakistan, Islamabad v. Muhammad Tariq Pirzada and 2 others 1999 SCMR 2744; Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Pirzada and others 1999 SCMR 2189; H.W.R.WADE & C.F.FORSYTH in Administrative Law at page 537 Seventh Edition and University of Dacca through its Vice-Chancellor and another v. Zakir Ahmed PLD 1965 SC 90 ref.
Federation of Pakistan through Secretary Education, Islamabad v. Professor Dr. Anwar and 2 others 2006 SCMR 382 rel.
Qamar Zaman Qureshi, Deputy Attorney-General for Pakistan for Appellants.
Sirajuddin Khalid Khan for Respondent No.1.
Date of hearing: 20th February, 2008.
JUDGMENT
SAYED ZAHID HUSSAIN, C.J.---For the assessment year 2001-2002, respondent No.1 filed Income Tax Return under the Self-Assessment Scheme. Since his case was selected for audit under para.9(a)(ii) of Circular No.4 of 2001, a complaint was filed before the Federal Tax Ombudsman which was decided on 26-2-2003. It was recommended that:
(i) The C.B.R. directs exclusion of return from the list of cases selected under para.9(a)(ii) for audit and for its acceptance under Self-Assessment Scheme.
(ii) Compliance be reported within thirty days of this order.
A representation was filed by the Commissioner of Income Tax, Faisalabad before the President of Pakistan in view of provisions of section 32 of the Federal Tax Ombudsman Ordinance, 2000. To that a reply was filed by respondent No. 1. Through Office Memorandum, dated 15-11-2003 respondent No.1 was informed of the acceptance of the representation by the President of Pakistan setting aside the decision of the Federal Tax Ombudsman. The said order was assailed by the respondent through W.P. No.17565/03 which petition was accepted on 22-1-2004 primarily on the ground that the representation was decided and accepted by the President of Pakistan without affording opportunity of hearing to the party concerned. It was observed that the representation shall be deemed to be pending which shall be "re-decided in accordance with law after due notice and opportunity of hearing to the parties". This Intra-Court Appeal has been filed under section 3 of the Law Reforms Ordinance, 1972 qua the same.
2. In this case and the connected matters, an identical issue having common features has arisen as to whether the President of Pakistan as persona designata under section 32 of the Federal Tax Ombudsman Ordinance, 2000 or Article 32 of the Establishment of Wafaqi Mohtasib (Ombudsman) (P.O. No.1 of 1983), Order 1983 is obliged to afford personal hearing to the persons/parties concerned before deciding the representation. All the appeals/petitions in which this issue 'arises were ordered to be heard together and will, thus, stand disposed of in terms of this judgment.
3. For resolving the issue it is appropriate to make reference to a judgment of the Honourable Supreme Court of Pakistan in Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Pirzada and 2 others 1999 SCMR 2744 wherein some observations appear to be of relevance. It was observed that the President under the law being statutory body has to function as such under the provisions and scheme envisaged by the same. It could not be the intention of the Legislature that disposal of the representation be made in an arbitrary manner and that an aggrieved person had the legal right to demand that an adverse decision should not be taken against him in violation of the principles of natural justice and that the recording of valid reasons while setting aside the recommendation of the Motasib, would be the minimum requirement of law. On a review filed by the Federation against the said judgment Federation of Pakistan through Secretary, Establishment Division, Government of Pakistan, Islamabad v. Muhammad Tariq Pirzada and others 1999 SCMR 2189 it was emphasized that "the jurisdiction vested in the President under Article 32 partakes of appellate jurisdiction. Application of judicial mind is a must for reaching a fair and just conclusion on the lis brought before the President/Wafaqi Mohtasib." There had been divergent views in the Courts about the manner of disposal of representations by the President of Pakistan. However, in Federation of Pakistan through Secretary Education, Islamabad v. Professor Dr. Anwar and 2 others 2006 SCMR 382 such an issue was dealt with by the Honourable Supreme Court of Pakistan and was answered as follows:---
"Be that as it may, it is to be seen that the opportunity of hearing is not confined to the personal hearing rather it may also be in the form of written reply and thus as per scheme of law in a representation to the President against the order of Ombudsman it is not possible for the President to provide personal hearing to the parties in such representation therefore, inviting the comments/written arguments in reply to the representation by the concerned quarters would be considered sufficient compliance of the law. However, the direction of the High Court for providing hearing to the respondent by the Section Officer in the Ministry of Law, Justice and Human Rights was beyond the scope of Article 32 of P.O. No.1 of 1983, as a Section Officer cannot act as an agent of the President under the (ibid.) Article rather the requirement of law in the representation against the order of Ombudsman can be conveniently fulfilled by giving right of hearing through a written reply to the representation."
It needs no reiteration that hearing before a decision is one of the principles of natural justice. However "hearing" does not necessarily - mean oral hearing in all matters and cases. H.W.R.WADE and C.F.FORSYTH in Administrative Law at page 537 Seventh Edition has dealt with such a matter as follows:---
"In various situations practicalities may justify dispensing with oral hearings. It has been held that a statutory board, acting in an administrative capacity, may decide for itself whether to deal with applications by oral hearing or merely on written evidence and argument, provided that it does in substance `hear' them; and that dealing with an appeal on written communications only is not contrary to natural justice. The visitor of a college may similarly deal with an appeal on written submissions only and a student may be rusticated from his college without an oral hearing, if he has been told the nature of the complaints against him and given a fair opportunity to state his case in writing."
In the University of Dacca through its Vice-Chancellor and another v. Zakir Ahmed PLD 1965 SC 90 after considering so many precedents it was observed that:---
"What these principles of natural Justice are it is not possible to lay down with any exactness, for, they have been variously defined in various cases, as was pointed out by the Judicial Committee in the case of the University of Ceylon v. Fernando (1960) 1 All ER 631. Turker, L.J., said in Russel v. Duke of Norfok (1949) 1 All ER 109 "the requirements of natural justice must depend on the circumstances of the case, the nature of the enquiry, the rules under which the Tribunal is acting, the subject-matter that is being dealt with, and so forth". Nevertheless, the general consensus of judicial opinion seems to be that, in order to ensure the "elementary and essential principles of fairness" as a matter of necessary implication, the person sought to be affected must at least be made aware of the nature of the allegations against him, he should be given a fair opportunity to make any relevant statement putting forward his own case and "to correct or controvert any relevant statement brought forward to his prejudice."
The emphasis, thus, was to ensure the observance of the principles of fairness that a person should have fair opportunity "to correct or controvert any relevant statement brought forward to his prejudice." A notice/opportunity to file comments/reply to the representation may suffice and meet the principles of fairness in a particular situation. We cannot loose sight of the perspective and the position of the President of Pakistan. It is not possible for such a functionary to afford personal/oral hearing to dispose of the representation. The view taken by the Honourable Supreme Court of Pakistan in Federation of Pakistan through Secretary Education, Islamabad v. Professor Dr. Anwar and 2 others 2006 SCMR 382 is consistent with the universally accepted principle that oral hearing before disposal of such representation is not an absolute requirement. Notice to the party concerned for filing his rely/comments may be a sufficient compliance of principles of natural justice but the decision so taken should evince due application of mind in the process of decision of the representation. To insist oral/personal hearing in such a matter cannot be countenanced.
4. The learned counsel for the respondent has raised an objection as to the competency of the appeal that since the statutory remedies were provided by the law i.e. The Income Tax Ordinance, 1979, Intra-Court Appeal is not maintainable in view of proviso to section 3(2) of Law Reforms Ordinance, 1972. Answer to such an objection is not difficult as the respondent/writ petitioner had himself chosen to approach the Federal Tax Ombudsman bypassing the statutory forum and remedies, therefore, such a plea can hardly be given any weightage. This appeal is as a sequel to the orders passed by the Federal Tax Ombudsman (on complaint) the President of Pakistan (on representation) and the learned Single Judge of this Court in the writ petition. The appellant is well within his right to seek remedy in the matter. Objection raised in this form is hardly worth the countenance and is repelled.
5. Since this issue has cropped up in many connected matters, therefore, the objection that the appeal should be dismissed on the ground of limitation alone has no substance particularly when the delay already stands condoned by the learned Bench seized of the matter at an earlier stage.
In view of the preceding discussion, it follows that all such cases where the person/party concerned had notice/opportunity of filing comments/reply to the representation, the decision of the President cannot be annulled simply for the reason that personal/oral hearing was not afforded. But where the person/party concerned had no notice/ opportunity of filing comments or reply and decision was made without affording such opportunity, the representation need to be reconsidered and decided after notice and affording opportunity of filing reply/ comments to the same. Since in the present case the respondent had the opportunity of filing reply to the representation which was decided through a speaking order, no interference was warranted with the order in writ jurisdiction. The petition was thus liable to be dismissed.
As a result, the order passed in the writ petition is set aside and appeal is accepted. No order as to costs.
M.H./C--32/LAppeal allowed.