MUGHAL-E-AZAM BANQUET COMPLEX VS FEDERATION OF PAKISTAN through Secretary, 2011 PTD-LAHORE-HIGH-COURT-LAHORE 2260 (2011)

(a) Punjab Sales Tax Ordinance (II of 2000)---

----S. 3---Constitution of Pakistan, Art.199---Constitutional jurisdiction of High Court---Scope---Imposition of Sales Tax under Punjab Sales Tax Ordinance, 2000 on services rendered by petitioner, managing a marriage hall---Contention of the petitioner was that initially services rendered by marriage halls were subject to Sales Tax under the Ordinance, however, later on such services were omitted, therefore, show-cause notice to the extent of, "Sales Tax on Services" was without lawful authority---Authorities contended that "Caterers" were included in the Schedule to the Ordinance and persons rendering services of marriage halls also render services of "Caterers", hence the show-cause notice---Held, question whether the petitioner rendered services as "Caterers" was a question of fact which could not be gone into by High Court in its constitutional jurisdiction and could best be left to be decided by the tax authorities who dealt with the taxpayers more closely on an operational level---Any such decision would always be subject to challenge in accordance with law.

(b) Punjab Sales Tax Ordinance (II of 2000)---

----S. 3---Constitution of Pakistan, Art.199---Constitutional petition---Challenge to show-cause notice---Premature petition---"Ripeness", doctrine of---Applicability---Held, laying challenge to a show-cause notice was, no different than filing a petition on the basis of an apprehension or a speculation---Such a petition was premature and not riped for adjudication---Rationale behind the "ripeness" doctrine was to prevent the courts through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative polices, and also to protect the agencies from judicial interference until an administrative decision had been formalized and its effect left in a concrete way by the challenging parties--- "Ripeness" required that an issue be sufficiently formed and felt to be a justifiable controversy---Courts insist on a concrete context, that context enabled them to better see the problems that they were supposed to redress---Such insistence by the court might eliminate the waste of courts deciding disputes that might be mooted as tin agency runs its course; assured the courts of the knowledge gained front applied agency expertise and provided them with a record already developed by the agency---Constitutional petition was dismissed.

Ronald D. Rotunda, John E. Nowak, Treatise on Constitutional Law, Second Edition West Publishing Company (Volume I; Pages 188-189); Term used for "Departments" under American Administrative Law; Rogers, Healy, Krotoszynski, Administrative Law, Wolters Kluwer, 2008 (page 686) and Alfred C. Arran, Jr. and William T Mayton, Administrative Law, 1993 (page 404) ref.

Mian Muhammad Shahbaz Sharif v. Federation of Pakistan through Secretary, Ministry of Interior, Government of Pakistan, Islanmabad and others PLD 2004 SC 583; Union of India and another v. Kunisetty Satyanarayana AIR 2007 SC 906; Special Director and another v. Mohd. Ghulam Ghouse and another AIR 2004 SC 1467; Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh and others AIR 1996 SC 691; State of Uttar Pradesh v. Shri Brahm Datt Sharma and another AIR 1987 SC 943; Chief of the Army Staff and others v. Major Dharam Pal Kukrety AIR 1985 SC 703; Chanan Singh v. Registrar, Co-op. Societies, Punjab and others AIR 1976 SC 1821; Zeal Pak Industries (Pvt.) Ltd., Karachi v. Regional Commissioner, Income Tax, Karachi and 2 others 2009 PTD 712; Mehboob Ali Malik v. The Province of West Pakistan, and others PLD 1963 Lah. 575; Shaheen Asad, Assistant Manager Finance/Accounts, Azad Kashmir Logging and Sawmill Corporation, Muzaffarabad v. Azfar Yaseen, Assistant Manager, Finance and Accounts, Azad Kashmir Logging and Sawmill Corporation, Muzaffarabad 2001 PLC (C.S.) 93 and Dilshad Kausar v. Azad Jammu and Kashmir Government (Prime Minister) through Chief Secretary and 2 others 2005 PLC (C.S.) 1048 rel.

(c) Punjab Sales Tax Ordinance (II of 2000)---

----S. 3---Sales Tax Act (VII of 1990), Preamble---Constitution of Pakistan, Art.199---Constitutional petition---Challenge to show-cause notice---Scope---Interference at the stage of show-cause notice stultifies and retards the adjudicatory process provided under the relevant law---Such interference stalls the investigative machinery of the quasi judicial authorities and hampers discharge of their statutory duties which are to be done with a free hand independent from outside control---Petitioner, in the present case, had an opportunity to place its case before the concerned authority who was competent to look into the factual receipts besides there were elaborate procedures by way of appeal or revision against order passed in such proceedings---Petitioner had already filed its replies to the show-cause notice and the matter was pending adjudication before the concerned authority---Petitioner, however, could invoke the constitutional jurisdiction of High Court, if the show-cause notice was not issued by a competent authority or the liability in the show-cause notice was palpably unlawful and without jurisdiction---Where the show-cause notice was admittedly issued by a competent authority and its contents did not prima facie reveal that the liability was ultra vices the law, and in fact the allegations raised in the show-cause notice required factual inquiry in order to determine whether tile petitioners rendered services as 'caterers', constitutional petition was premature hence not maintainable, however, in the interest of justice, authorities were directed by High Court to decide the impugned show-cause notices, after granting a hearing to the petitioner and allowing, them to raise all questions of law and facts within one month from receipt of present judgment of the High Court by passing a speaking order strictly in accordance with law.

Muhammad Shahid Baig for Petitioner.

Rana Munir Hussain and Zahid Attique Chaudhry for Petitioners (in Connected with petitioners).

Sarfraz Ahmed Cheema for Respondents (in Writ Petitions Nos.2799/2011, 8122/2011, 8123/2001 and 8854/2011.

Sajjad H. Rizvi, for Respondent (in Writ Petition No.7307 of 2011).

Date of hearing: 2nd May, 2011.

JUDGMENT

SYED MANSOOR ALI SHAH, J.---Through this judgment the instant writ petition, as well as, Writ Petitions Nos. 7307, 8122, 8123 and 8854 of 2011 are being decided together as all of them raised identical questions of law and facts.

2. The petitioner has challenged Show-Cause Notice dated 25-1-2011 issued by respondent No.5. The grievance is against the imposition of Sales Tax under the Punjab Sales Tax Ordinance, 2000 ("Ordinance") on services rendered by the petitioner. It is submitted that petitioner runs and manages marriage hall and initially services rendered by marriage halls were subject to Sales Tax under the Ordinance, however, later on services rendered by the marriage halls were omitted. It is submitted that the Show Cause Notice to the extent of Sales Tax on services is, therefore, without lawful authority.

3. Counsel for the respondents/F.B.R. while admitting that the services rendered by marriage halls have been omitted from the Schedule under the Ordinance, submits that the instant Show-Cause Notice has been issued to the petitioner for the services rendered by it as "Caterers". It is submitted that Caterers are included in the Schedule to the Ordinance and persons rendering services of marriage halls also render services of "Caterers", hence the Show-Cause Notice.

4. The question whether the petitioner renders services as "Caterers" is a question of fact which cannot be gone into by this Court in its constitutional jurisdiction and can best be left to be decided by the tax authorities who deal with the tax payers more closely on an operational level. Needless to say that any such decision will always be subject to challenge in accordance with law.

5. The other aspect of the matter is that mere issuance of Show-Cause Notice does not mean that the case will invariably be decided against the petitioner and there is always a possibility that the same may be decided in favour of the petitioner. Laying challenge to a show cause notice is, therefore, no different that filing a petition on the basis of an apprehension or a speculation. Such a petition is premature and not ripe for adjudication. "Just as a case can be brought too late, ...it can be brought too early, and not yet be ripe for adjudication... until the controversy has become concrete and focused, it is difficult for the Court to evaluate the practical merits of the position of each party." The basic rational behind the "Ripeness" doctrine is "to prevent the courts through avoidance of premature adjudication, from entangling themselves, in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." "Ripeness" requires that an issue be sufficiently formed and felt to be a justifiable controversy...As courts insist on a concrete context, that context enables them to better see the problems that they are supposed to redress. As courts insist on completed agency action, that insistence may (1) eliminate the waste of courts deciding disputes that might be mooted as an agency runs its course, (2) assure the courts of the knowledge gained from applied agency expertise, and (3) provide them with a record already developed by the agency. For further support on the maintainability of premature petitions reliance is placed on Mian Muhammad Shahbaz Sharif v. Federation of Pakistan through Secretary Ministry of Interior Government of Pakistan, Islamabad and others (PLD 2004 SC 583), Union of India and another v. Kunisetty Satyanarayana (AIR 2007 SC 906),???? Special Director and another v. Mohd. Ghulam Ghouse and another (AIR 2004 SC 1467), Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh and others (AIR 1996 SC 691), State of Uttar Pradesh v. Shri Brahm Datt Sharma and another (AIR 1987 SC 943), Chief of the Army Staff and others v. Major Dhararn Pal Kukrety (AIR 1985 SC 703), Chanan Singh v. Registrar, Co-op. Societies, Punjab and others (AIR 1976 SC 1821), Zeal Pak Industries (Pvt.,) Ltd., Karachi v. Regional Commissioner, Income Tax, Karachi and 2 others (2007 PTD 712) Mehboob Ali Malik v. The Province of West Pakistan, and others (PLD 1963 Lahore 575),???? Shaheen Asad, Assistant Manager Finance Accounts, Azad Kashmir Logging and Sawmill Corporation, Muzaffarabad v. Azfar Yaseen, Assistant Manager, Finance and Accounts/Azad Kashmir Logging and Sawmill Corporation, Muzaffarabad (2001 PLC (C.S.) 93) and Dilshad Kausar v. Azad Jammu and Kashmir Government

(Prime Minister) through Chief Secretary and 2 others (2005 PLC (C.S.) 1048).

6. Interference at the stage of issuance of Show-Cause Notice stultifies and retards the adjudicatory process provided under the relevant law, in this case Ordinance, 2000 read with Sales Tax Act, 1990. This unduly stalls the investigative machinery of the quasi judicial authorities and hampers discharge of their statutory duties which are to be done with a free hand independent from outside control. The petitioner has an opportunity to place its case before the concerned authority who is competent to look into the factual receipts besides there are elaborate procedures by way of appeal or revision against order passed in such proceedings. The petitioner has already filed its replies to the Show-Cause Notice and the matter is pending adjudication before the concerned authority.

7. Petitioner, however, can invoke the constitutional jurisdiction of this Court, if the Show-Cause Notice is not issued by a competent authority or the liability in the Show Cause Notice is palpably unlawful and without jurisdiction. This is not so in the present case. Show-Cause Notice is admittedly issued by a competent authority and its contents do not prima facie reveal that the liability is ultra vices the law. In fact the allegations raised in the Show-Cause Notices requires factual inquiry in order to determine whether the petitioner renders services as Caterers.

8. Counsel for the petitioner .at the fag end of arguments, rather half heartedly, submitted that the liability of Special Excise Duty under the Federal Excise Act, 2005, mentioned in the Show-Cause Notice is also without lawful authority. Perusal of the writ petitions, and reply to the Show-Cause Notice submitted by the petitioner before the concerned authorities show that the petitioner has not raised this question. Even otherwise this question revolves around the word "manufacture" under the Federal Excise Act, 2005 and can best be adjudicated upon by the Tax Authorities as it entails factual determination.

9. For the above reasons this petition along- with connected petitions mentioned in para No.1 of the judgment are premature and hence not maintainable. However, in the interest of justice respondents are directed to decide the impugned show-cause notices, after granting a hearing to the petitioner and allowing them to raise all questions of law I and facts within one months from the receipt of this judgment by passing a speaking order strictly in accordance with law.

10. Disposed of in the above terms.

M.A.K./M-933/L???????????????????????????????????????????????????????????????????????????????? Order accordingly.