JAVED IQBAL VS PAKISTAN MOBILE COMMUNICATIONS LTD., 2017 PTD-ISLAMABAD 1257 (2017)

Income Tax Ordinance (XLIX of 2001)--

----S.130---Constitution of Pakistan, Arts. 175, 203, 189 & 199---Law Reforms Ordinance (XII of 1972), S.3(2)---Chairperson/members of the Appellate Tribunal---Scope---Appellate Tribunal under S.130 of the Income Tax Ordinance, 2001 was not a "court"---Appellant impugned order of High Court passed in Constitutional petition filed by respondent, whereby appointments made under S.130 of the Income Tax Ordinance, 2001 to the Appellate Tribunal were declared illegal on the ground that the Appellate Tribunal, exercises judicial functions and fell within the definition of "Court" and therefore meaningful consultation with the Chief Justice of Pakistan for appointment chairperson or members of the Appellate Tribunal was required---Validity---High Court observed that the Supreme Court, in PLD 2013 SC 501, specifically held that the Appellate Tribunal, constituted under the Customs Act, 1969; similar to the Appellate Tribunal constituted under Income Tax Ordinance, 2001, was not a "court" for the reason that the said Appellate Tribunal was not mentioned or provided for in the Constitution, therefore, the same could not be regarded as a "court" and that since the Supreme Court had not followed its earlier decision, therefore Appellate Tribunal could not be considered "court" under the scheme of the Constitution requiring consultation with the Chief Justice of Pakistan in appointment of Chairperson and members of the same; and order of the Supreme Court which was later in time and rendered by the same number of Judges, would prevail---Impugned judgment was set aside, and Constitutional petitions stood dismissed---Intra-court appeal was allowed, accordingly.

Riaz Ul Haq v. FOP PLD 2013 SC 501 distinguished.

Army Welfare Trust v. Collector of Sales Tax C.P. No.1983 of 2012 rel.

Government of Balochistan v. Aziz Ullah Mamon and others PLD 1993 SC 341; Government of Sindh v. Sharaf Faridi PLD 1994 SC 105; Imran v. Presiding Officer, Punjab PLD 1996 Lah. 542; Mehram Ali v. FOP and others PLD 1998 SC 1445; Liaqat Hussian v. FOP and others PLD 1999 SC 504; Zia Ullah v. Najeeb Ullah PLD 2003 SC 656 and Riaz-ul-Haq v. Federation of Pakistan and others PLD 2013 SC 501 ref.

Barrister Qadir Buksh, Nasim Sikandar and Saeed Ahmed Zaidi, Advocates in their respective appeals along with Khawaja Muhammad Imtiaz, Standing Counsel and Afnan Karim Kundi Additional Attorney-General for Appellants.

Muhammad Raheel Kamran Sheikh, Ali Sibtain Fazli, Ayyaz Shaukat, Malik Sardar Khan and Hasham Ahmed Khan for Respondents.

Date of hearing: 15th November, 2016.

JUDGMENT

AAMER FAROOQ, J.---This consolidated judgment shall decide the instant appeal as well as I.C.As. Nos. 81, 82, 83, 84, 85, 103, 104, 105, 106, 107, 108 and 109 of 2016 as common questions of Law and facts are involved.

2.All the aforementioned appeals are directed against consolidated judgment dated 24.02.2016 whereby petitions, under Article 199 of the Constitution of Islamic Republic of Pakistan (the Constitution), filed by respondent No.1 (in all the appeals) were allowed.

3.The facts, in brief are, that respondent No.1, in all the appeals, filed petitions under Article 199 of the Constitution challenging the appointments of the Chairman and Members of the Appellate Tribunal, Inland Revenue (the Tribunal). The petitions were consolidated and through a common judgment were decided by the Single Judge in Chambers vide judgment dated 24.02.2016. In this behalf the relief sought for by respondent No.1 to the extent of assailing the vires of Section 130 of Income Tax Ordinance, 2001 (the Ordinance) was disallowed. However, petitions were allowed to the extent of appointment of the Chairman and Members of the Tribunal which were declared to be without lawful authority.

4.Learned counsel for the appellants, inter alia, submitted that the Tribunal is not a Court within the meaning of word as provided in Article 175 of the Constitution. It was further contended that the appointments are made by the Federal Government in accordance with the procedure provided in Section 130 of the Ordinance. It was further contended that the Judge in Chambers while passing the impugned judgment has erroneously placed reliance on case titled "Riaz UI Haq v. FOP" (PLD 2013 SC 501).

5.During the course of arguments, attention of the Court was drawn that in a recent judgment by the Hon'ble Supreme Court of Pakistan in case titled "Army Welfare Trust v. Collector of Sales Tax" (C.P. No.1983 of 2012) it has been held that the Tribunals so constituted under the Sales Tax Act, 1990 as well as Customs Laws are not Courts within the meaning of the word as provided in Article 175 of the Constitution.

6.Learned counsel for the respondents, inter alia, submitted that in the instant appeal constitutionality of the procedure/manner and terms of appointment of the Chairman and Members of the Appellate Tribunal Inland Revenue under Section 130 of the Ordinance are involved. It was further contended that there cannot be any dispute to the proposition that the Tribunal is a Judicial Tribunal for the reasons that it adjudicates the rights and liabilities of the parties; that the orders passed by the Tribunal under section 132(3)(4)(5) and (6) of the Ordinance, Section 46 of the Sales Tax Act, 1990 and Section 34 of the Federal Excise Act, 2005 are Judicial Orders; Section 224 of the Ordinance affirms that the proceedings before the Tribunal are judicial and Section 227 ousts the jurisdiction of the Civil Courts in respect of the matters decided by the Tribunal. It was further submitted that the Tribunal though has been regarded as Tribunal is in essence a Court as it can record evidence as well as additional evidence and can also adjudicate facts upon affidavit as provided in the Appellate Tribunal Inland Revenue Rules, 2010. It was further contended that in such circumstances the August Supreme Court of Pakistan in cases titled "Riaz UI Haq v. Federation of Pakistan and others " (PLD 2013 SC 501) and "Mehram Ali v. Federation of Pakistan and others" (PLD 1998 SC 1445) has held that such forums by whatever named called are deemed to be Courts. It was further contended that under Article 203 of the Constitution a Tribunal has to be under the supervision and control of High Court and Article 175(3) ibid mandates that the judiciary is to be separated from the executive which also finds mentioned in Article 2-A of the Constitution. The learned counsel further contended that there is ample case law to the effect that appointment of Members of a Judicial Tribunal has to be in consultation with the Chief Justice of the Supreme Court of Pakistan and or of the High Courts; that appointed Members of a Judicial Tribunal must have reasonable fixed tenure; that the Judicial Tribunal must be in effective control and superintendence of the High Court and that the procedure of the Judicial Tribunal must be totally independent from the executive. Reliance was placed on cases titled "Government of Balochistan v. Aziz Ullah Mamon and others" (PLD 1993 SC 341) and "Government of Sindh v. Sharaf Faridi" (PLD 1994 SC 105), "Imran v. Presiding Officer, Punjab (PLD 1996 Lahore 542), "Mehram Ali v. FOP and others" (PLD 1998 SC 1445), "Liaqat Hussian v. FOP and others" (PLD 1999 SC 504), "Zia Ullah v. Najeeb Ullah" (PLD 2003 SC 656) and "Riaz-ul-Haq v. Federation of Pakistan and others" (PLD 2013 SC 501). It was also contended that section 130 of the Ordinance is in violation of the Constitutional requirements inasmuch as it permits appointments of Members by the Federal Government without consultation with the Chief Justice of Supreme Court of Pakistan and does not permit a fixed tenure; that under Clause (c) of subsection (3) of section 130 of the Ordinance a Law Graduate in BS-20 can be appointed as a Judicial Member; he also contended that under subsections (7), (8), (8-A) and (11) a Bench comprising of majority of Accountant Members can be forwarded to hear the case and that the Federal Government can empower any one Member to exercise the powers of the Tribunal.

7.Respondent No.1 in the petitions filed under Article 199 of the Constitution challenged vires of section 130 of the Ordinance and also the procedure for appointment of the Members as well as the Chairman of the Tribunal. Relief to the extent of vires of Section 130 ibid was denied to them and their petitions were dismissed. However, in so for the procedure and appointment of Members and the Chairman is concerned the relief was allowed primarily on the touch stone of the ratio decidendi laid down by the Hon'ble Supreme Court of Pakistan in case titled "Riaz ul Haq v. Federation of Pakistan and others" (PLD 2013 SC 501). Respondent No.1 did not assail the findings of the learned Single Judge in Chambers to the extent of dismissal of the petitions on the question of vires of Section 130 ibid, therefore, same has attained finality.

8.The Single Judge in Chambers in order to adjudicate the issue regarding requirement of consultation with the Chief Justice of Pakistan for appointment of the Chairman and the Members formulated three questions which are contained in para-9 of the judgment. The judgment impugned before us then elaborately discusses the scheme of the appointments and various pronouncements of the August Apex Court. The following observations were made by the Single Judge in Chambers in the impugned judgment:

"21. It is, therefore, obvious that the ratio decidendi, as propounded by the august Supreme Court in the judgment of Sheikh Riaz ul Haq case, supra, would apply in the case of a forum which would qualify the test laid down in paragraph 40 thereof. The powers and functions of the Appellate Tribunal, described in section 131 and read with the other provisions of the Ordinance, of 2001, unambiguously shows that the ingredients prescribed for qualifying the test for the determination as to whether it would fall within the ambit of the definition of a 'Court' are fulfilled in every sense. The Appellate Tribunal is indeed the first independent forum for determining the rights and liabilities of a citizen, recognized as such by the law, and it has the statutory duty to discover relevant facts in the presence of the parties and then to pronounce the decisions based on the evidence and material before it. The Appellate Tribunal, therefore, for all intents and purposes exercises judicial functions and falls within the expression 'Court' as contemplated by the august Supreme Court in Sheikh Riaz-ul-Haq case supra. It is, therefore, held that meaningful consultation with the Chief Justice of Pakistan is a precondition for appointing a person as a Chairperson or Member of the Appellate Tribunal. An appointment made in violation of the said established judicial principle will be void and the holder of the office will be treated as having exercised powers and functions in a defacto capacity."

9.The bare perusal of the above paragraph shows that the conclusion reached in the impugned judgment was on the basis of ratio laid down in case titled "Riaz ul Haq v. Federation of Pakistan and others" (PLD 2013 SC 501). The Hon'ble Supreme Court of Pakistan in the referred judgment laid down the following principles:--

"40. The perusal of above case-law makes it abundantly clear that a tribunal is not always function as a 'Court', nor its action is always judicial; however, the determining factor is the nature of the dispute to be resolved by the Tribunal. If the Tribunal has to determine a dispute relating to a right or liability, recognised by the Constitution or law and is under an obligation to discover the relevant facts, in the presence of the parties, in the light of the evidence produced by them, it acts judicially. Besides, whenever judicial power is vested in a forum, be it called a Court or Tribunal, for all legal intents and purposes it is a Court. Further, such Tribunals have to be manned, controlled and regulated in accordance with the established judicial principles."

10.The question whether the Appellate Tribunal Customs, Excise and Sales Tax is a Court within the meaning of word mentioned in Section 175 ibid was recently considered by the Hon'ble Supreme Court of Pakistan in case titled "Army Welfare Trust v. Collector of Sales Tax" (C.P. No.1983/2012) dated 23.09.2016. In this behalf the August Apex Court observed as follows:--

"6. Therefore, the question arises whether the Appellate Tribunal is a Court established by law. The Act does not set up the Appellate Tribunal, but utilizes the "Customs, Excise and Sales Tax Appellate Tribunal" already set up under section 194 of the Customs Act, 1969 (see subsection (1) of section 2 of the Act). The Federal Government constitutes the Appellate Tribunal which comprises of judicial and technical members (subsections (1) and (2) respectively of section 194 of the Customs Act). The qualification of a judicial member is provided in subsection (2) and of a technical member in subsection (3) of section 194 of the Customs Act. The Federal Government also appoints the Chairman and determines the terms and conditions of appoint-ment of the judicial and technical members (subsections (4) and (5) respectively of section 194 of the Customs Act). Neither through the Sales Tax Act, 1990 ("the Sales Tax Act" or "the Act") nor through the Customs Act a Court was established, therefore, the Appellate Tribunal cannot be categorized as a Court.

7. The Appellate Tribunal can also not be equated with the tribunals envisaged in the Constitution which exercise judicial powers, such as tribunals established under Article 212 and election tribunals under Article 225 of the Constitution Ajmal Mian, C.J., heading a five member bench of this Court in the case of Mehram Ali v. Federation of Pakistan (PLD 1998 Supreme Court 1445) held, that any Court or Tribunal which is not founded on any of the Articles of the Constitution cannot lawfully share judicial power with the Courts referred to in Articles 175 and 203 of the Constitution" (subparagraph (iii) of paragraph 11, page 1477). A more recent judgment of a three member bench of this Court authored by Iftikhar Muhammad Chaudhry, C.J., in the case of Riaz-ul-Haq v. Federation of Pakistan (PLD 2013 Supreme Court 501) held, that, since the Federal and Provincial Service Tribunals perform judicial functions and are set up pursuant to Article 212 of the Constitution they have to be made autonomous and independent of the Executive arm of the government/s in compliance with the mandate of the Constitution (clause (3) of Article 175) which provides for the separation of the Judiciary from the Executive. The Appellate Tribunal is not mentioned or provided for in the Constitution, therefore, it cannot be categorized or be deemed to be a Court in terms of paragraph (d) of clause (2) of Article 185 of the Constitution. When through the impugned judgment the High Court set aside the Appellate Tribunal's order it did not do so of a Court immediately below. Consequently, the petitioner acted in accordance with the Constitution when it preferred a petition seeking leave to appeal the impugned judgment. The above mentioned office objection is therefore, overruled."

11.In the recent judgment by the August Apex Court pertaining to the Customs Appellate Tribunal which also comprises Judicial and Technical Members who are appointed in accordance with section 194(2), (3) and (4) of the Customs Act, 1969 it is specifically held that such Tribunal is not a Court; the August Apex Court while holding so considered its earlier judgments rendered in case titled "Mehram Ali v. Federation of Pakistan and others" (PLD 1998 SC 1445) and "Riaz ul Haq v. Federation of Pakistan and others" (PLD 2013 SC 501). The reasoning which prevailed with the Hon'ble Supreme Court of Pakistan in its recent pronouncement is that the Appellate Tribunal is not mentioned or provided for in the Constitution, therefore, cannot be regarded as a Court.

12.Since the August Apex Court has not followed its earlier decision in holding the Customs Appellate Tribunal is not a Court which is similar to the Tribunal constituted under the Ordinance, therefore, latter cannot be regarded as a Court for the purposes of the scheme of the Constitution requiring consultation with the Hon'ble Chief Justice of Pakistan in appointing the Chairman and its Members. In this behalf the judgment rendered in case titled "Riaz-ul-Haq v. Federation of Pakistan and others" supra is of three (3) Hon'ble Judges and so is the latest judgment in "Army Welfare Trust" case, however, since the latter is in time so shall prevail.

13.In view of above, instant appeal as well as I.C.As. mentioned in schedule are allowed and the judgment dated 24.02.2016 is set aside; consequently the petitions filed under Article 199 of the Constitution stand dismissed.

KMZ/56/Isl Appeals allowed.