SAFE LIFE (PVT.) LTD. VS FEDERATION OF PAKISTAN through Secretary/Chairman, 2015 PTD-KARACHI-HIGH-COURT-SINDH 1555 (2015)

(a) Federal Excise Act (VII of 2005)---

----Ss. 32 & 33---Constitution of Pakistan, Art. 199---Constitutional jurisdiction of High Court---Alternate remedy---Effect---Constitutional petition in presence of alternate remedy under S. 34 of the Federal Excise Act, 2005---Maintainability---Petitioner / taxpayer impugned recovery notices under the Federal Excise Act, 2005, after the petitioner's appeal under S. 33 of the Federal Excise Act, 2005 against the same, was dismissed---Held, that petitioner had availed remedy provided under the Federal Excise Act, 2005 by filing an appeal before the Commissioner (Appeals) whereafter an order had been passed on merits; and if the petitioner felt aggrieved of the said order, he should have availed remedy provided under S. 34 of the Federal Excise Act, 2005 by filing an appeal before the Appellate Tribunal---High Court under Art. 199 of the Constitution did not exercise appellate jurisdiction; jurisdiction of High Court under Art. 199 of the Constitution was an extraordinary jurisdiction which could be invoked sparingly in cases where some jurisdictional error or patent illegality had been pointed out by an aggrieved person and no adequate alternate remedy was available for redressal of such a grievance---Impugned order in the present case was passed by the Commissioner (Appeals) while exercising lawful jurisdiction under the Federal Excise Act, 2005 and such order could be challenged by the petitioner by filing an appeal before the Appellate Tribunal under S. 34 of the Federal Excise Act, 2005---High Court observed that present petition was not maintainable, however, the petitioner was at liberty to approach the relevant forum as provided under the Federal Excise Act, 2005---Constitutional petition was dismissed, in circumstances.

Chairman, Central Board of Revenue and others v. Pak-Saudi Fertilizer Ltd. 2000 PTD 3748 distinguished.

Khalid Mehmood v. Collector of Customs, Customs House, Lahore 1999 SCMR 1881; Messrs Maritime Agencies (Pvt.) Ltd., v. Assistant Commissioner of S.R.B. and others 2015 PTD 160 and Messrs Roche Pakistan Ltd. v. Deputy Commissioner of Income Tax and others 2001 PTD 3090 rel.

(b) Constitution of Pakistan---

----Art. 199---Constitutional jurisdiction of High Court---Alternate Remedy---Scope----High Court under Art. 199 of the Constitution did not exercise any appellate jurisdiction and jurisdiction of High Court under Art. 199 of the Constitution was an extraordinary jurisdiction which could be invoked sparingly in cases where some jurisdictional error or patent illegality had been pointed out by an aggrieved person and no adequate alternate remedy was available for redressal of such a grievance.

Mushtaque Hussain Qazi for Petitioner.

Date of hearing: 17th March, 2015.

JUDGMENT

AQEEL AHMED ABBASI, J.---Through instant petition, the petitioner company has impugned two recovery notices issued by the respondent department under rule 60(3) of Federal Excise Rules, 2005, read with rule 71 of Sales Tax Rules, 2006 and section 48(b) of Sales Tax Act, 1996, available as Annexure N-1 at page 345 and Annexure N-2 at page 347 of the file, for recovery of Rs.232,721,551 towards Federal Excise Duty on the grounds that the said recovery notices are illegal as the same have been issued pursuant to illegal orders passed by the Deputy Commissioner, Inland Revenue, which were assailed by the petitioner before the Commissioner (Appeals), Inland Revenue under section 32(2) of the Federal Excise Act, 2005. However, the said appeals were also dismissed without appreciating the correct legal position applicable to the case of the petitioner.

2.It has been contended by the learned counsel for the petitioner that the impugned demand is based on misconceived facts and improper application of law as the petitioner is not liable to pay any Federal Excise Duty. Per learned counsel, the petitioner does not render any telecommunication / mobile services and has never paid any amount on account of fee, royalty and fee for technical services, hence, does not fall within the ambit of Rule 43(a) of the Federal Excise Rules, 2005. Per learned counsel, since the basis of the order-in-original and the order passed by the Appellate Commissioner, Inland Revenue, in the instant case is illegal, therefore, both the orders passed by the authorities below and the recovery notices issued by the department may be declared as illegal and without lawful authority.

3.Learned counsel for the petitioner was confronted as to the maintainability of the instant petition which appears to have been filed against recovery notices which have been issued pursuant to four assessment orders i.e. FED Assessment Order No. 001/2014, 002/2014, 003/2014 and 004/2014, all dated 18-8-2014, available at pages 185, 207, 229 and 251 respectively, passed by the Deputy Commissioner, Inland Revenue, E&C Unit-5, Zone II, RTO-III, Karachi. Such assessment proceedings were duly attended by the petitioner and the aforesaid assessment orders were passed pursuant to which such impugned demands have been created against the petitioner under section 14(1)(2) of Federal Excise Act, 2005. The petitioner being aggrieved by such assessment orders, preferred appeals before the Commissioner (Appeals)-5. RTO, Karachi who, vide combined appellate order dated 26-12-2014 passed under section 32 of the Federal Excise Act, 2005 was pleased to dismiss the appeals i.e. Nos. 49 to 52/2014 filed by the petitioner, hence, confirmed the impugned demand created through the assessment orders passed by the Deputy Commissioner in this regard. The petitioner, instead of filing an appeal against the order passed by the Commissioner (Appeals) in terms of section 34 of the Federal Excise Act, 2005 before the Appellate Tribunal, has filed instant petition by abandoning the appellate forum as provided under the Statute, whereas, no reasonable justification has been given for not availing the alternate remedy in accordance with law, particularly, once the petitioner has already chosen to avail such remedy before the forum provided under law, by filing an appeal before the Commissioner (Appeals) against the impugned assessment orders.

4.Learned counsel for the petitioner, in response to such query of the Court, has contended that this Court has concurrent jurisdiction under Article 199 of the Constitution, 1973 to entertain the petition of an aggrieved person, irrespective of the fact that alternate remedy is available under the statute. Per learned counsel, if the entire proceedings initiated by the tax authorities are without lawful authority and illegal such proceedings can be impugned by filing a constitutional petition at any stage of the proceeding. It is further contended by the learned counsel for the petitioner that since the very premises whereby the petitioner is held liable to pay Federal Excise Duty is misconceived in law and fact, therefore, no useful purpose would have been served by availing the alternate remedy provided under the Statute. Therefore, per learned counsel, the instant petition is maintainable. In support of his contentions, the learned counsel for the petitioner has placed reliance on the case of Chairman, Central Board of Revenue and others v. Pak-Saudi Fertilizer Ltd. (2000 PTD 3748).

5.We are not persuaded to agree with the submissions made by the learned counsel for the petitioner on the point of maintainability of the instant petition, particularly, when the counsel for the petitioner has not been able to point out any jurisdictional error or some patent illegality on the part of the respondent who appears to have exercised valid jurisdiction while passing the impugned assessment orders after confronting the petitioner, whereas, the petitioner did not raise any objection with regard to jurisdiction of the respondent during the course of assessment proceedings. We have also noted that the petitioner, being aggrieved by such assessment orders, availed the remedy as provided under the Federal Excise Act, 2005, by filing an appeal before the Commissioner (Appeals), Inland Revenue, under section 33 of the Federal Excise Act, 2005, whereafter an order has been passed on merits. If the petitioner felt aggrieved by such order, he should have availed the remedy as provided Federal Excise Act, 2005 by filing an appeal under section 34 of the Federal Excise Act, 2005 before the Appellate Tribunal. However, instead of filing such appeal, the petitioner directly approached this Court by invoking Constitutional jurisdiction of this Court under Article 199 of the Constitution, 1973 merely on the presumption that no useful purpose would be served if the petitioner approaches the Appellate Tribunal for redressal of its grievance and thus choosing to abandon such alternate remedy without any lawful justification.

6.A regards submissions of the learned counsel for the petitioner as to the merits of the case, we are not inclined to dilate upon merits of the case as this Court does not exercise any appellate jurisdiction under Article 199 of the Constitution, which is an extra ordinary jurisdiction which can be invoked sparingly in those cases where some jurisdictional error or patent illegality has been pointed out by an aggrieved person and no adequate alternate remedy is available for redressal of such grievance. The petitioner has not been able to make out a case requiring this Court to exercise its discretionary jurisdiction under Article 199 of the Constitution against an appellate order passed by Commissioner (Appeals) while exercising lawful authority/jurisdiction under the Statute, whereas, such order can also be challenged by filing an appeal before the Appellate Tribunal under section 34 of the Federal Excise Act, 2005.

7.Reliance placed by the learned counsel for the petitioner on the case of Chairman, Board of Revenue (2000 PTD 3145), is misconceived as in the cited case the facts were entirely different and distinguishable, for the reason that in the cited case an order under section 53 of the Income Tax Ordinance, 1979 for the recovery of advance income tax was assailed by petitioner by invoking Constitutional jurisdiction of High Court under Article 199, and such petition was entertained for the reason that such order was not amenable to an appeal provided under section 129 of the Income Tax Ordinance, 1979, whereas, the petitioner was able to demonstrate that the impugned demand created by the respondent was patently illegal and without jurisdiction. Whereas, in the instant case, the assessment orders have been already assailed by filing appeals before Commissioner (Appeals), however, since appeals have been dismissed, therefore, the petitioner has abandoned the hierarchy of forum provided under the Statute i.e. Federal Excise Act, 2005, for redressal of grievance, which amounts to render such forum as negatory and redundant.

8.The tendency to abandon or bypass the forum provided under Statute for resolution of a dispute regarding taxability or otherwise has already been deprecated by the Hon'ble Supreme Court in number of cases including the case of Khalid Mehmood v. Collector of Customs, Customs House, Lahore (1999 SCMR 1881), wherein, the Hon'ble Supreme Court, after having examined different taxation laws with particular reference to availability of alternate statutory remedy and the forums provided for resolution of disputes, while dismissing the Constitution Petition filed by taxpayer, was pleased to hold as under:--

"As to bar of jurisdiction, it is to be noted that Article 199 of the Constitution opens with word to the effect that the High Court may exercise its powers under such Articles only "if it is satisfied that no other adequate remedy is provided by law". Adequacy of the alternative remedy, therefore, if there is another remedy available, should always attract the attention of the High Court.

Of such alternative remedies also there are some, which would still leave the jurisdiction of the High Court virtually unaffected, if the order, complained of, is so patently illegal, void or wanting in jurisdiction that any further recourse to or prolongation of the alternative remedy may only be counter-productive and, by invocation of Article 199 the mischief can forthwith be nipped in the bud. In such matters, of course, neither the alternative remedy would be adequate nor bar of jurisdiction in the Sub-Constitutional Legislation may come in the way of the High Court in exercising its Constitutional jurisdiction.

There are other matters, however, where the Constitutional jurisdiction under Article 199 cannot be so readily resorted to. One such, falling in this category, would be matters amenable to the jurisdiction of any exclusive Tribunal, mandated by the Constitution itself. Another, which readily comes to the mind, would be disputes under a stature, postulating the appellant or revisional jurisdiction to reside either in the High Court itself or directly in the Supreme Court. An example, essentially relevant to the first, would be the Service Tribunal where the Tribunal is mandated by the Constitution of Pakistan namely, Article 212, thereof and where an appeal lies directly from the Tribunal's decision to the Supreme Court. Obviously, the High Court should be very slow in entertaining disputes covered by the jurisdiction of such a Tribunal even in matters where the High Court's jurisdiction cannot be taken away e.g. acts which are void, without jurisdiction or coram non judice. In such cases of ouster, the High Court would consider it a better exercise of its discretion not to interfere. More or less a similar principle applies where an exclusive Tribunal or a regular Court has jurisdiction in a matter but the legislation, creating such Court or forum or conferring jurisdiction on the same, also ends up by providing appellate or revisional jurisdiction to the High Court itself. Obvious examples could be civil and criminal proceedings, emanating under the Code of Civil and Criminal Procedure, Income Tax References, Customs Appeals etc. In such matters, where the High Court itself is the repository of the ultimate appellate, revisional or referral powers, conferred by the relevant statute, it is in the rarest of cases that the High Court may be persuaded to entertain a Constitutional petition and to enforce the Constitutional remedy in preference to its own appellate, revisional or referral dispensation arising in course of time."

9.A Division Bench of this Court, under similar circumstances, vide order dated 24-4-2014, in the case of Messrs Maritime Agencies (Private) Ltd, v. Assistant Commissioner of S.R.B. and others reported as 2015 PTD 160, dismissed the aforesaid petition on the point of maintainability by placing reliance in the earlier judgments of this Court in the following terms:--

"6. The tendency to impugn the Show-Cause Notices issued by the Public Functionaries under taxing statutes, before this Court under Article 199 of the Constitution, and to casually bye-pass the remedy as may be provided under a Special Statute is to be discouraged as it tends to render the statutory forums as nugatory. Moreover, if the proceedings initiated under Special Taxing Statutes do not suffer from jurisdictional error or gross illegality the same are required to be responded and resolved before the authority and the forums, provided under the Statute for such purpose, whereas, any departure from such legal procedure will amount to frustrate the proceedings which may be initiated by the public functionaries under the law and will further preempt the decision on merits by the authorities and the forums which may be provided under the statute for such purpose. In the instant case a Show-Cause Notice has been issued by the respondent who admittedly has the jurisdiction over the case of the petitioner, wherein, certain queries have been made and the petitioner has been provided an opportunity to respond to such Show Cause. Petitioner is at liberty to file detailed reply and to raise all such legal objection, as raised through instant petition, which shall be decided by the respondent strictly in accordance with law, after providing complete opportunity of being heard to the petitioner with particular reference to the provisions of Section 3 of Sindh Sales Tax on Services Act, 2011, read with Rule 32 of the Sindh Sales Tax on Services Rules, 2011 as argued by the learned counsel for the petitioner before us. If the petitioner is aggrieved by any adverse decision by the respondent in this regard, a remedy as provided under the law in terms of Section 57 of Sindh Sales Tax on Services Act, 2011 can be availed by filling an appeal before the Commissioner (Appeals) Sindh Revenue Board. Similarly an appeal is also provided against the order of CIT (Appeals) in terms of Section 61 before the Appellate Tribunal, whereas, after the order of Appellate Tribunal, a Reference can also be filed before this Court in terms of Section 63 of the Sindh Sales Tax on Services Act, 2011 in respect of questions of law which may arise from the order of the Tribunal. Since in the instant case, no final adjudication on the proposed Show-Cause Notice has been made so far by the respondent and merely a Show-Cause Notice has been issued, therefore, we are of the view that instant petition is pre-mature, whereas no cause of action has accrued to the petitioner which may justify the filing of instant petition."

10.In the case of Messrs Roche Pakistan Ltd. v. Deputy Commissioner of Income Tax and others, reported in 2001 PTD 3090, a Division Bench of this Court, after having examined the case-law of the superior Courts on the issue of maintainability of Constitutional petition, was pleased to dismiss the Constitutional Petitions, which were filed on mere issuance of show-cause notices. It will be advantageous to reproduce the relevant findings of the Court as hereunder:--

"18. In view of the above discussion, we are of the opinion that the Impugned notice under section 62 of the Ordinance issued by respondent No.1 to Roche is strictly in accordance with law and was not without jurisdiction and/or mala fide. Consequently, it could not be assailed by filing a Constitutional petition under Article 199 of the Constitution. Moreover, as adequate alternate remedy by way of appeal before the Commissioner of Income-tax, a second appeal before the Income-tax Appellate Tribunal and thereafter a reference to the High Court under section 136 of the Ordinance are available to the petitioner, this petition is not maintainable.

19. It would not be out of place to mention here that after filing of this petition, the petitioner submitted his further reply in relation to the question of applicability of section 79 which was withheld by it in the earlier reply to the notice. The conduct of the petitioner in withholding its response to the applicability of section 79 in its reply to the Notice under section 62, filing the present Constitutional petition and thereafter submitting its reply on the question in issue in order to justify the maintainability of the Constitutional petition cannot validate the proceedings which may otherwise be not maintainable. Respondent No.1 would now consider the reply filed by Roche, apply his mind and make the assessment in accordance with law. If Roche is aggrieved by the order passed by respondent No.1 it would be open to it to resort to the statutory remedies available under the law."

11.Accordingly, we did not find any substance in the instant petition which is misconceived in fact and law and dismissed the same by a short order on 17-3-2015 and these are the reasons for such order.

12.However, petitioner is at liberty to approach the relevant forum for redressal of grievance as provided under Federal Excise Act, 2005.

KMZ/S-28/SindhPetition dismissed.