LOTTE PAKISTAN PTA LTD. VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance, Islamabad
2011 PTD 2229
2011 PTD 2229
[Sindh High Court]
Before Mushir Alam, C.J. and Syed Hasan Azhar Rizvi, J
LOTTE PAKISTAN PTA LTD. Through Chief Financial Officer and Company Secretary
Versus
FEDERATION OF PAKISTAN through Secretary Ministry of Finance, Islamabad and 4 others
Constitutional Petition No.D-1487, 1488 and Miscellaneous Nos. 6962, 6963 of 2011, decided on 21/06/2011.
(a) Income Tax Ordinance (XLIX of 2001)---
---Ss. 2(68), 4A [as inserted by Income Tax (Amendment) Ordinance (IV of 2011)] & 74---Constitution of Pakistan, Art. 199---Constitutional petition---Levy of surcharge @ 15% of income tax payable by every taxpayer under Income Tax Ordinance, 2001---Petitioner's plea that closing of its accounts on 31-12-2010 for purposes of filing returns would denote as Tax Year 2011, thus provisions of S.4-A of Income Tax Ordinance, 2001 would not apply to him---Validity---Impugned surcharge was levied for 3-1/2 months w.e.f. 15-3-2011 to 30-6-2011 and was not made applicable to tax year 2010 and prior thereto---Provisions of S.4-A of Income Tax Ordinance, 2001 were silent qua applicability thereof either to taxpayer whose tax year started from 1st July and ended on 30th June or those whose tax year started other than normal tax year---Normal tax period would be a period of twelve months ending on 30th June---Permission granted to petitioner to submit return on 1st January of each year was only to accommodate him and not for purposes to evade payment of income on such count--Impugned surcharge was levied for rehabilitation of flood affectees and would apply to every taxpayer using either normal tax year or special tax year---High Court dismissed constitutional petition in circumstances.
(b) Constitution of Pakistan---
----Art.199---Constitutional jurisdiction of High Court---Object and Scope.
It is necessary for the court while' exercising constitutional jurisdiction to bear in mind that the real purpose of entertaining such application is the vindication of the rule of law effective access of justice to the economically weaker class and meaningful realization of the fundamental rights. The directions and commands issued by the court of law in the writ jurisdiction are for the betterment of the society at large and not for benefiting any individual. But if the court finds that in the garb of writ petition actually an individual's interest is sought to be carried out or protected, it would be the bounded duty of the court not to entertain such petition.
Usman Alam and Anwar Kashif Mumtaz for Petitioners.
Kafeel Ahmed Abbasi for Respondents.
Date of hearing: 27th May, 2011.
ORDER
SYED HASAN AZHAR RIZVI, J.---Above numbered, two Constitutional Petitions, involving similar point, were filed by the petitioners with the following prayers:--
(1)? Direct the respondents not to collect the Surcharge on the income/tax pertaining to the period March 15th, 2011 to June 30th, 201'1 as it is not relates to Tax year 2012 being specifically provided under section 4A of the Ordinance as introduced by the Amendment Ordinance.
(2)? Declare that the Tax Year, 2012 does not fall within the ambit of section 4A of the Ordinance as introduced by Amendment Ordinance and any transactions related to Tax Year, 2012 be not subjected to levy and Collection of Surcharge @ 15 % of the tax.
(3)? That the Surcharge collected on imports and other transactions including but not limited to taxes on services; contracts, supplies, etc., after the promulgation of the Amendment Ordinance be declared to be illegal; without lawful authority and be ordered to be refunded.
(4)? Direct the respondents to issue necessary instruction either in shape of clarification or exemption certificate for non-deduction/ collection of withholding of surcharge during the period March 15th 2011 and upto June 30th 2011. Further, direct the respondents to refund the Surcharge so deducted till the decision of this petition.
(5)? Grant any other appropriate relief this honourable Court may deem fit and proper.
(6)? Award cost of' this petition to the petitioner."
2. It was urged that the petitioner is a regular payer of income tax and files its income tax returns with the Commissioner Inland Revenue Large Taxpayers Unit, Karachi. It was further urged that pursuant to amendment made in the Income Tax Ordinance (Amendment Ordinance 2011) section 4A has been inserted, which has imposed further liability of surcharge at the rate of 15% of the tax including tax payable under part 5 of Chapter 12 of the Ordinance, 2011. It was also urged that this is one time imposition and payable for the tax year 2011 only. For ready reference, newly added section 4A is reproduced below:-
"4A. Surcharge.---(1) Subject to this Ordinance, a surcharge shall be payable by every taxpayer at the rate of fifteen per cent of the income tax payable under this Ordinance including the tax payable under Part-V of Chapter-X of Chapter-XII as the case may be, for the period commencing from the promulgation of this Ordinance, till the 30th June, 2001.
(2) Surcharge shall be paid, collected, deducted and deposited at the same time and in the same manner as the tax is paid, collected, deducted and deposited under this Ordinance including Chapter X or XII as the case may be:
Provided that this surcharge shall not be payable for the tax year 2010 and prior tax years and shall be applicable, subject to the provisions of subsection (I), for the tax year, 2011 only."
3. Messrs Usman Alam and Anwar Kashif Mumtaz, learned counsel for the petitioner contended that petitioner is closing its accounts on December 31st of each year by observing calendar year as a special tax year for the purposes of filing the tax returns as provided under section 74 of the Ordinance. They urged that the accounts closed on . December 31st, 2010 correspond to Tax Year 2011 whereas those closed on December 31st, 2011 shall be denoted as Tax Year 2012. Thus, the surcharge levied by insertion of section 4A into the Ordinance by Amendment Ordinance is not applicable on the petitioner for the purposes of withholding of tax between the periods from 15-3-2011 to 30-6-2011 for the reason that this period corresponds to tax year 2012. Learned counsel contended that collection of surcharge under section 4A of the Ordinance from March, 15th 2011 to June 30th 2011 is illegal and without lawful authority.
4. In reply, Mr. Kafeel Ahmed Abbasi, learned counsel for the respondents strongly opposed the submissions made on behalf of the petitioner and contended that in the facts and circumstances of the case the petitioner is liable to pay surcharge under section 4A of the Ordinance, 2011 and cannot take advantage of the language of section 4A, which provides that this surcharge shall not be payable for the tax year 2010 and prior tax years and shall be applicable, subject to the provisions of subsection (1) for the tax year 2011 only. In the regard he made reference to section 2(68) of the Income Tax Ordinance, 2001, which relates to 'tax year' means the tax year as defined in sub-section (1) of section 74 and, in relation to a person, includes a special year or a transitional year that the person is permitted to use under section 74. Therefore, the plea of the petitioner that section 4A of the Ordinance has no applicability on the petitioner on the ground that their accounts year closes on 31-12-2010 corresponding to tax year 2011 for the purpose of filing return, has no force.
5. In the context of submissions made by learned counsel, we have carefully perused the case record and gone through the newly added section 4A of the Ordinance, 2011. Admittedly, the enactment was made only for 3-1/2 months w.e.f. 15-3-2011 to 30-6-2011. The language of newly added section is very clear that the same shall not be payable for the tax year 2010 and prior tax years and shall be applicable only from 15-3-2011 to 30-6-2011, but the intention of the legislature is that it shall be payable by 'every taxpayer' at the rate of 15% of the income tax payable. There is no mention that the surcharge is applicable only to those taxpayer whose tax year starts from 1st July and ending on 30th June and those whose tax year starts other than the normal tax year are exempted. In order to meet the submission of learned counsel for the petitioner that their tax year ending on 31st day of December, therefore imposing of surcharge is not applicable to them, it is necessary to examine the definition of tax year. Section 74 of the Income tax Ordinance, 2001 relates to tax year. We may reproduce relevant clauses of section 74 in the above context:
(1) For the purpose of this Ordinance and subject to this section, the tax year shall be a period of twelve months ending on the 30th day of June (hereinafter referred to as 'normal tax year') and shall, subject to subsection (3), be denoted by the calendar year in which the said date falls.
(2) ????
?(2A) The Board,
(i)???????? in the case of a case of persons having a special tax year different from a normal tax year may permit, by a notification in the official Gazette, to use a normal tax year; and
(ii)??????? in the case of a class of persons having a normal tax year may permit, by a notification in the official Gazette, to use a special tax year.???????? -
(3) A person may apply, in writing, to the Commissioner to allow him to use a twelve months' period, other than normal tax year, as special tax year and the Commissioner may, subject to subjection (5), by an order, allow him to use such special tax year.
??????????? (4) ???????..
(5) The Commissioner shall grant permission under subsection (3) or (4) only if the person has shown a compelling need to use special tax year or normal tax year, as the case may be, and the permission shall be subject to such conditions, if any,. as the Commissioner may impose.
???????????
??????????? (6) ???????..
??????????? (7) ???????..
??????????? (8) ???????..
??????????? (9) ???????..
(10) In this Ordinance, a reference to a particular financial year shall, unless the context otherwise requires, include a special tax year or a transitional tax year commencing during the financial year.
(11) ???????
6. A bare perusal of the aforesaid section, it is to be observed that normal tax year shall be a period of twelve months' ending on the 30th day of June and where the tax year of a person changes as a result of subsections (2), (3) or (5), the period between the last full tax year prior to the change and the date on which the changed tax year commences shall be treated as a separate tax year, to be known as the "transitional year". Therefore, we are not inclined to accept the submission of learned counsel for the petitioner. The Legislature while bringing out a particular enactment need not embrace all categories within its scope. It is for the Legislature to determine what categories it would embrace- within the scope of legislation and merely because certain categories which would stand on the same footing as those which are covered by the legislation are left out would not render legislation which has been enacted in any manner discriminatory and violative of the fundamental rights guaranteed under the Constitution of Islamic Republic of Pakistan. Moreover, the permission granted to the petitioner to submit their return from 1st January of each year was only to accommodate them and not for the purposes to evade the payment of income tax on that count.
7. Needless to mention here that legislation enacted for the achievement of a particular object, which we all well aware is for the rehabilitation of flood affectees, who are our brothers and sisters and citizen of this country. It is our foremost duty to help them generously and put their hands to come out of the crises, which they are facing in these hard days of their lives. We may observe that if these petitions are allowed a Pandora box will beopened and every taxpayer who use the tax year other than the normal tax year will approach this Court for taking benefit and the very purpose of enactment will be frustrated.
8. We may also observe that it is necessary for the Courts while exercising Constitutional jurisdiction to bear in mind that the real purpose of entertaining such application is the vindicating of the rule of law, effective access of justice to the economically weaker class and meaningful realization of the fundamental rights. The directions and commands issued by the Courts of law in the writ jurisdiction are for the betterment of the society at large and not for benefiting any individual. But if the Court finds that in the garb of writ petition actually an individual's interest is sought to be carried out or protected, it would be the bounded duty of the Court not to entertain such petition.
9. For the foregoing reasons, we find no merits in these writ petitions and we accordingly dismiss the same holding that surcharge is applicable on every taxpayer either they use the normal tax year or special tax year.
S.A.K./L-3/L?????????????????????????????????????????????????????????????????????????????????????? Petition dismissed.