MUHAMMAD ASIM VS FEDERATION OF PAKISTAN through Chairman Federal Board of Revenue, 2014 PTD-KARACHI-HIGH-COURT-SINDH 1897 (2014)

Income Tax Rules, 2002---

----R.183(1) & (2)---Constitution of Pakistan, Art.199---Constitutional petition---Warrants of arrest---Fiscal matter---Stay of recovery---Assessee raised the plea that none of the ingredients as mentioned in R.183(2) of Income Tax Rules, 2002, were attracted and authorities had mala fidely rushed up with issuance of his warrants of arrest for recovery of demand---Validity---Public functionaries, particularly Revenue Officers who were responsible to administer taxing laws, were required to perform their duties and administer revenue laws in such manner, which could promote the purpose of statute and not to frustrate the same---Recovery of demand in question towards taxes by Revenue Officers during pendency of appeals, references or petitions before proper forum as provided under the statute or before Court of competent jurisdiction, when such recovery of demand had been stayed, did not only reflect upon mala fides on the part of revenue officers but also amounted to showing disrespect to higher forums provided under statute as well as to Courts---High Court expressed its desire that such tendency was required to be discontinued---Income tax authorities had withdrawn warrants of arrest issued against assessee, who intended not to press the petition---Petition was disposed of accordingly.

Mushtaque Hussain Qazi for Petitioner.

Shaikh Liaquat Hussain, Standing Counsel.

Date of hearing: 16th June, 2014.

ORDER

AQEEL AHMED ABBASI, J.---Through instant petition, the petitioner has impugned the warrant of arrest issued by the Commissioner Inland Revenue, Zone-I, RTO-II, Karachi in respect of the petitioner for the recovery of the impugned demand against the AOP for the Tax year 2011, which matter according to the learned counsel for petitioner is already sub-judice before the Appellate Tribunal Inland Revenue, wherein stay has been granted. Per learned counsel, none of the ingredients as mentioned in Rule 183(2) of the Income Tax Rules, 2002 are attracted in the case of the petitioner, whereas, the respondent has malafidely rushed up with the issuance of warrant of arrest which could neither be issued under the facts and circumstances of the case against the petitioner nor the respondent has given any reason in resorting to such extreme measures for the recovery of the impugned demand and has in fact tarnished the goodwill and reputation of the petitioner, who have never committed any default with regard to their tax liability.

2.Pursuant to Court notices, Dr. Ghulam Mustafa Rahu, Commissioner Inland Revenue, Zone-I, RTO-II, Karachi, has shown appearance along with Mr. Amjad Javaid Hashmi, Advocate, who has filed his Vakalatnama, which is taken on record. Commissioner Inland Revenue at the very outset has stated that the impugned warrants of arrest available at pages 173 to 175 of the file issued under Rule 183(2) of the Income Tax Rules, 2002 both dated 14-5-2014 in respect of both the petitioners namely Muhammad Asim and Muhammad Imran Yousuf, partners of Messrs Jofa Construction, have duly been withdrawn unconditionally and submits that it will be intimated to the petitioners today. He has also tendered his unconditional apology for having resorted to such extreme coercive measure for the recovery of impugned demand, which is already subjudice before the Income Tax Appellant Tribunal, wherein stay is operating.

3.In the instant matter, we have noted that during pendency of the appeal before the Appellate Tribunal Inland Revenue in respect of the impugned order and the demand, stay was granted by the Appellate Tribunal, whereas, the show cause notice issued under Rule 183(1) of the Income Tax Rules, 2002 was suspended by the Appellate Tribunal, till decision of the main appeal. However, in spite of such fact the impugned warrants of arrest under section 183(2) have been issued by the Commissioner Inland Revenue, Zone-I, RTO-II, Karachi, even without issuing show cause notice under Rule 183(1) of Income Tax Rules, 2002. It has been further observed that before resorting to such extreme measure for the recovery of the impugned demand, the respondents have not adopted the legal course, which otherwise is provided under the provisions of Income Tax Ordinance, 2001 and the Income Tax Rules, 2002 for the recovery of the impugned demand, as provided under Chapter XVI (Part I to Part IV) whereas, no reasonable opportunity has been provided to the petitioner in this regard. We may further observe that the public functionaries, particularly Revenue Officers who are responsible to administer taxing laws, are required to perform their duties and administer the revenue laws in such a manner, which may promote the purpose of the statute and not to frustrate the same. Recovery of the impugned demand towards taxes by Revenue Officers during pendency of Appeal(s), Reference(s) or Petition(s) before the proper forum as provided under the statute or before the competent Court of jurisdiction, particularly, when such recovery of demand has been stayed, does not only reflects upon the mala fides on the part of Revenue Officers but also amounts to showing disrespect to the higher forums provided under the statute as well as to the Courts, which tendency is required to be discontinued.

4.Since the Commissioner Inland Revenue in the instant case, after having realized the legal position as stated hereinabove, at the very outset has stated that warrants of arrest against the petitioners have already been withdrawn and has further assured that he will be careful in future, therefore, we have accepted his apology and would restrain ourselves from drawing any adverse inference in the instant matter, and would expect that in future he will be careful and shall act strictly in accordance with law.

5.Learned counsel for the petitioners, in view of such candid statement of the Commissioner Inland Revenue, Zone-I, RTO-II, Karachi, and withdrawal of impugned warrants of arrest against the petitioners, is satisfied and does not press instant petition, which is accordingly disposed of as not pressed along with listed application.

MH/M-110/SindhOrder accordingly.