TAXATION OFFICER/DEPUTY COMMISSIONER INCOME TAX KOTLI A.K. VS SAID AKBAR, 2014 PTD-HIGH-COURT-AZAD-KASHMIR 793 (2013)

Income Tax Ordinance (XLIX of 2001)---

----S.227---Specific Relief Act (I of 1877), S.42---Suit for declaration---Dispute as to recovery of income tax---Bar on jurisdiction of civil courts to adjudicate upon such dispute---Scope---Plaintiff sought declaration to the effect that tax recovery certificate issued to plaintiff be declared null and void---Suit was dismissed by Trial Court on the ground that Trial Court had no jurisdiction to hear the matter, however, Appellate Court set aside order of Trial Court and remanded the matter to it---Validity---Recovery certificate was issued to the plaintiff against which he preferred appeal before the Commissioner Income Tax, which appeal was heard, and dismissed---By his own conduct, plaintiff had conceded to jurisdiction of the tax assessing authority and its appellate authority---Plaintiff had also filed his tax returns before the very same authorities wherein, plaintiff was shown to be owner of taxable property---Civil Court had not jurisdiction regarding matters concerning income tax, which fell within the ambit of the Income Tax Ordinance, 2001; by virtue of the bar contained in S. 227 of the Income Tax Ordinance, 2001---Plaintiff, therefore, had no cause of action to file the suit in the civil court, findings of the Appellate Court were therefore not sustainable---Impugned order was set aside and suit of plaintiff was dismissed.

1994 MLD 904 and 2000 MLD 820 distinguished.

Mirza Zaid-ullah Khan for Appellant.

Shafique Amjad Kiani, Addl. A.G. for Respondents.

ORDER

MUNIR AHMED CHAUDHARY, J.---This appeal has been filedagainstthejudgmentandorderofDistrictJudge,Kotlidated24-6-2010, through which an appeal filed by the respondent Said Akbar was accepted and the case was remanded to Senior Civil Judge Kotli for deciding the case afresh after recording the evidence of the parties.

2.Brief facts giving rise to the present appeal are that the respondent/plaintiff Said Akbar filed a suit for declaration against the presentappellantandproformarespondentsinthecourtofSeniorCivil Judge Kotli, stating therein that recovery Certificate No.1854 dated 21-4-2006 is against the provisions of law and recovery amounting to Rs.89,093 cannot be made from the respondent Said Akbar. It was prayed to declare that the said certificate was null and void over the rights of the respondent/plaintiff.

3.Written statement was submitted by the present appellant and proforma respondents, stating therein that the respondent/plaintiff is a tax defaulter. The respondent/plaintiff has not approached the proper forum. The recovery certificate has been issued in accordance with the provisions of law. The respondent/plaintiff filed an appeal before Commissioner Income Tax (Appeals), which was dismissed. It was prayed to dismiss the suit. Issues were framed. The learned Senior Civil Judge heard the arguments on legal issue No.3 regarding jurisdiction of the civil court and dismissed the suit filed by the present respondent/ plaintiff on 20-8-2009. Feeling aggrieved, the present respondent/ plaintiff preferred an appeal before District Judge Kotli. After hearing the parties, the learned District Judge Kotli accepted the appeal and remanded thecasetothelearnedSeniorCivilJudge,Kotlisettingaside his judgment and order dated 20-8-2009. Hence, the instantappeal.

4.Arguments were advanced by the learned counsel for theparties. Mirza Zaid-ullah Khan Advocate, the learned counsel for the appellant argued that civil court has got no jurisdiction to hear the matters regarding recovery of Income Tax. The learned counsel referred section227ofIncome Tax Ordinance, 2001andrequestedtoacceptthe appeal and to set-aside the judgment and order of District Judge, Kotli.

5.While controverting the arguments advanced by the learned counsel for the appellant, Raja Shafique Amjad Kiani Advocate, the learned counsel for respondent Said Akbar contended that if any action has not been taken in letter and spirit in accordance with AJ&K Excise and Salt (Adaptation) Act, 1990, then a civil court is competent to examine the disputed acts of authorities despite the ouster of jurisdiction. The civil court is not deprived of its jurisdiction to review the questioned proposition in exercise of its general jurisdiction. The learned counsel further argued that the property against which the recovery certificate has been issued is not owned by the respondent/plaintiff. So, the recoverycertificatewasissuedinviolationoftheprovisionsoflaw.In such like situation, the civil court has got jurisdiction to hear thesuit. The learned District Judge Kotli has recorded his findings in accordance with the provisions of law. The learned counsel requested to dismiss the appeal and referred the following precedents in support of his arguments:---

1994 MLD 904

2000 MLD 820

6.After hearing the arguments advanced by the learned counsel for the parties, I have gone through the record available and perused the precedents referred with utmost care and minutely. It is an admitted fact that a recovery certificate was issued against the present respondent/ plaintiff Said Akbar. The said Said Akbar preferred an appeal against the said recovery certificate before the Commissioner Income Tax (Appeals) AJ&K Council Mirpur through his present counsel Raja Shafique Amjad Kiani Advocate. The said appeal was heard on 8-8-2006 and thereafter the said appeal was dismissed. The record reveals that the present respondent/plaintiff did not take this version through the said appeal that the taxable property was not owned by him. By the conduct, the respondent/plaintiff conceded the jurisdiction of tax assessing authority and appellate authority as well. The record reveals that the respondent/ plaintiff has filed hisreturnsofincomebeforeconcernedauthorities.It shows that the respondent/plaintiff is owner of the said taxable property.

7.It is an admitted principle of law that civil court has got no jurisdiction regarding matters concerning Income Tax, which fall within the ambit of Income Tax Ordinance, 2001. It is pertinent to reproduce the concerned provisions of law as under:--

"227. Bar of Suits in Civil Courts.---No suit or other legal proceeding shall be brought in any civil court against any order made under this Ordinance and no prosecution suit or other proceedings shall be made against any person for anything which is a good faith done or intended to be done under this Ordinance or any rules made thereunder."

It is clear that the respondent/plaintiff had no cause of action to file a suit in a civil court. He had an alternate remedy to prefer an appeal before Income Tax Appellate Tribunal against the order of the Commissioner Income Tax (Appeals). Moreover, the respondent/plaintiff did not produce any proof that he was not owner of the said property. The record also reveals that the action taken by the Income Tax authorities was made in letter and spirit of the concerned provisions of law. The findings recorded by the learned District Judge Kotli have no substance and not sustainable. The precedents referred by the learned counsel for the respondent/plaintiff have no conformity with the facts of the present case.

Having in view the above mentioned circumstances, the present appeal is accepted and it is hereby declared that a civil court has got no jurisdiction regarding the matter in hand. The judgment and order passed by the learned District Judge Kotli dated 24-6-2010 is hereby set aside and the judgment and order passed by the learned Senior Civil Judge Kotli dated 20-8-2009 is upheld. No order as to the costs.

KMZ/23/HC(AJ&K)Appeal allowed.