MUHAMMAD ATHAR SAEED, J.---These two Income Tax Appeals have been filed by the Commissioner of Income Tax Companies-V, Karachi seeking the opinion of this Court on the following proposed questions of law:--
(I) Whether on the facts and in the circumstance of the case the Income Tax (Appellate) Tribunal was just lied in holding assessee (PSO) as handling agent to Government of Pakistan, and not importer in the presence of bill of entry (copy enclosed).
(II) Whether on the facts and in the circumstances of the case the Income Tax (Appellate) Tribunal was justified in law in holding that assessee is not liable to payment of tax under section 80-C of the Income Tax Ordinance, 1979 in the presence of bill of entry, solely on the basis of document entered into by foreign sellers.
(III) Whether on the facts and in the circumstances of the case the Income Tax (Appellate) Tribunal was justified to hold that the assessee was handling agent on the basis of contract document between Government of Pakistan and the seller, particularly when bill of entry is in the name of the assessee (PSO) and all related services are admittedly rendered by it. The bill of entry is signed by the assessee (PSO) as importer and taxes have been paid to the Customs Authorities and also tax liability under section 80-C has been 'fully discharged without any objection.
(IV) whether on the facts and in the circumstances of the case the Income Tax (Appellate) Tribunal was misled by reading the document of contract between the Government of Pakistan and the foreign supplier without having looked at the bill of entry.
2. Since both the counsel were prepared with their briefs and had consented for the disposal of these appeals, we decided to admit the appeals to answer the following refrained question:-- "whether on the facts and circumstances of the case the learned Income Tax Appellate Tribunal was justified in holding that the income of the assessee was not taxable under section 80-c"
3. Briefly stated the facts of the case are that the respondent a public limited company engaged in storing and marketing of petroleum liquid products had been appointed by the Federal Government as its handling agent to import PLO Products on behalf of the Federal Government.
The contention of the respondent before the Assessing Officer was that 'they had not imported these products as importer on their own accord but as an handling agent of the Government of Pakistan and, therefore, for the purposes of deduction under section 50(5) of the Income Tax Ordinance, 1979 and assessm ent under section 80(c) of the Income Tax Ordinance the Federal Government has to be treated as importer. This contention was rejected by Inspecting Additional Commissioner/Deputy Commissioner of Income Tax by relying on the following admitted facts:--
(a) LCs were opened by the Company in its own name.
(b) Clearing was got done by the company in its own name.
(c) C & F cost was paid by the Company itself.
(d) Bills of entry were prepared in the name of assesseecompany.
(e) Sales of the imported POL products was effected by the assessee-Company.
(0 Profits arising out of such sales were incorporate in the books of assessee-Company and offered for taxation.
4. Being aggrieved by the order, the respondent filed appeals before the CIT Appeals, who vide his orders in Appeal No.666/V dated 3-8-1997 and Appeal No.167/V dated 9-3 1998 dismissed the appeals and maintained the orders of the Income Tax Authorities. Being aggrieved by the order of the CIT Appeals, the respondent filed appeal before the Income Tax Appellate Tribunal, who vide its combined order dated 23-12-1998 in I.T.A. No.922/KB of 1997-98 and I.T.A. No.1952/KB of 1997-98 accepted the appeals and h d as under:-- "In the above circumstances we are of the considered opinion that the learned two officers below have misdirected in holding that the Pakistan State Oil (Appellant) is itself an Importer of the POL products. It is held that the Government of Pakistan is the importer of POL products and the appellant has merely acted as handling agent on payment of fixed commission. The appellant is, therefore, held not liable to payment of tax under section 80-C of the Income Tax Ordinance. 1979 and the imports made by the Government of Pakistan are not to be subjected to withholding tax under section 50(5) of the Income Tax Ordinance, 1979. The impugned finding of the learned two officers' below in respect of issue under consideration are, therefore, hereby vacated. The appeals are allowed accordingly."
Hence these appeals.
5. We have heard Mr. Aqeel Ahmad Abbasi learned counsel for the appellant and Mr. Khalid Anwar learned counsel for the respondents.
6. The learned counsel for the appellant submitted that the order of the learned Tribunal is based on misinterpretation of the 'provisions of section 80-C read with section 50(5) of the Income Tax Ordinance, 1979 and has been passed by completely ignoring the admitted facts that all the procedure for the import of the POL. Products to Pakistan was carried on by the respondent and not by Government of Pakistan. He further submitted that the Tribunal had- without giving any cogent reasons in support of its decision held on the basis of the facts of the case that the Government of Pakistan was the importer and not the respondent thus in effect holding that section 80-C does not apply only to the de juro importers but it may also be extended to de fecto importers and in every case the factual position should be examined to arrive at the conclusion as to who the real importer was. According to the learned counsel this treatment is against the intention of the legislature and the spirit of the presumptive tax regime. He also drew our attention to paragraph eight of the order of the Tribunal wherein the Tribunal had allowed the respondent counsel to produce certain additional documents before it. In this connection he relied on a short order of a Division Bench of this Court in ITC No.243 of 1997 dated 10-10-2006 by which this point has been decided in favour of the Department.
7.. Mr. Khalid Anwar the learned counsel for the respondent submitted that this Court vide its order dated 8-2-2002, in an identical Income Tax Appeal No.767 of 1999, has adjudicated upon the identical questions of law by treating these proposed questions as questions of fact and accordingly disposed of the above appeal in favour of the taxpayer and against the Department.
8. Defending the order of the Tribunal the learned counsel argued that on the basis of the documents on record the Tribunal has reached the right conclusion that the actual importer is the Government of Pakistan and the respondent had just been appointed as an handling agent to handle these imports on behalf of the Government of Pakistan on fixed commission. He referred to the sale contract in respect of the PLO products and pointed out that this sale contract clearly shows that the contract was entered into between the President of Pakistan and the Seller. He read out the recital in the contract which shows that it is between the President of Pakistan through Directorate General of Oil, Department of Petroleum and Energy Resources, Ministry of Petroleum and Natural Resources, Government of Islamic Republic of Pakistan and the foreign seller. He also referred to the Certificate available on record issued by the Government of Pakistan Ministry of Petroleum and Natural Resources to the effect that the respondent has been appointed as handling-agent to handle the import of PLO products in Karachi on fixed commission and had acted on behalf of Ministry of Petroleum Government of Pakistan. He said that after scrutinizing the facts of the case the Tribunal has reached the conclusion that the actual importer was the Government of Pakistan and the respondent was only acting as handling agent and, therefore, rightly held that the respondent was not liable to payment of tax under section 80-C of the Income Tax Ordinance, 1979. He argued that the Tribunal has decided the issue on the basis of factual position and no question of law arises which can be adjudicated by this Court in its advisory jurisdiction under section 136 now section 133 of the Income Tax Ordinance, 2001.
9. The learned counsel then drew our attention to the wording of section 80-C to point out an alleged lacuna in the drafting of this section. In order to fully appreciate his contention, it will be helpful to reproduce section 80-C of the Income Tax Ordinance which reads thus:-- "80-C. Tax on income of certain contractors and importers:--
(1) Notwithstanding anything contained in this Ordi ance or any other law for the time being in force, where any amount referred to in subsection (2) is received by or accrues or arises or is deemed to accrue or arise to any person, the whole of such amount shall be deemed to be income of the said person and tax thereon shall be charged at the rate specified in the First Schedule.
(2) The amount referred to in subsection (1) shall be the following, namely:-
(a) 'Where the person is a resident:--
(i) the amount representing payments on which tax is deductible under subsection (4) of section 50, othe than payments on account of services rendered;
(ii) the amount as computed for the purpose of collect ion of tax under subsection (5) of section 50 in respect of goods imported, not being goods imported by an industrial undertaking as raw material for its own consumption. And
(b) Where the person is a non-resident, the amount representing payments on account of execution of contract for construction, assembly or like project in Pakistan on which tax is deductible under subsection (4) of section 50.
(3) Nothing contained in this Ordinance shall he so construed as to authorize any allowance or deduction against the income as determined under subsection (1) or any refund of tax deducted or collected under section 50 or set off of any loss under any provision of this Ordinance.
(4) Where the assessee has no income other than the income referred to in subsection (1) in respect of which tax has been deducted or collected, the tax deducted or collected under section 50 shall be deemed to be the final discharge of his tax liability under this Ordinance and he shall not be required to file the return of total income under section 55: Provided that, in respect of the assessment year commencing on the first day of July, 1991, where the tax deducted or collected in the preceding financial year under subsection (4) or subsection
(5) of section 50 is less than the tax payable under this section, the tax so deducted or collected shall not constitute full and final discharge of the tax liability of the assessee and he shall be required to pay the amount representing the difference between the tax payable under this section and the tax so deducted or collected and all the provisions of this Ordinance shall apply accordingly.
(5) Where an assessee, while explaining the nature and source of any sum, investment, money, valuable article, excess amount or expenditure, referred to in section 13, takes into account any source of income which is subject to tax in accordance with the provisions of this section, he shall not be entitled to take credit of any sums as is in excess of an amount which if taxed at a rate or rates, other than the rate applicable to income chargeable to tax under this section, would have resulted in tax liability equal to the tax payable in respect of income under section.
(6) For the purpose of determining the share of a partner of a firm out of such income of the firm as is determined under section 80-B or this section, the said income of the firm shall be taken to be an amount which if taxed at the rate or rates, other than the_ rate applicable to income chargeable to tax under section 80-B or this section, would have resulted in tax liability equal to the tax payable in respect of income under section 80-B or this section.
(7) In a case to which subsection (4) applies, an order under section 59-A shall be deemed to have been made in respect of income referred to in subsection (1)."
10. The contention of Mr. Khalid Anwar is that subsection (1) of section 80-C seeks to tax the amounts referred to in subsection (2), which are received by or accrues or arises or is deemed.To accrue or arise to any person. He then referred to sub-clause (ii) of clause-A of subsection (2) of section 80-C which defines one of the amounts as the amount computed for the purpose of collection of tax under subsection. (5) of section 50 in respect of goods imported.
The learned counsel submitted that the amount as computed above was never received by the respondent but was either received by the foreign exporter from whom these products were imported or by the Customs Authorities to the extent of customs duty and sales tax and, therefore, if any tax has to be received, under section 80-C it has to be received either from the foreign exporter or the Collector of Customs and not the respondent. He further submitted that this drafting lacuna has been removed in the Income Tax Ordinance, 2001 as now tax on imports has to be collected under section 148 of the new Ordinance and Clause (a) of section 169 provides that the collection of advance tax under section 148 is a final tax under subsection (7) of section 148 on the income to which it relates and subsection (7) of section 148 also provides that tax collected under section 148 shall be final tax on the income of the importer arising from the imports. He further referred to section 80(CAD) being the tax collectable on income on industrial undertakings located in Export Processing Zones read with section 50(5AAB) wherein it is specifically provided that the value of the exported goods on which tax is collectible under section 50(5AAB) has been specifically deemed to.Be the income of the said exporter. He, therefore, submitted that section 80- C will not apply to any importer due to this drafting lacuna. In support of his contention he relied on sitb-para (xxxiii) of paragraph 31 of the judgment of the Honourable Supreme Court of Pakistan in the case of Ellahi Cotton Mills v. Federation of Pakistan PLD 1997 SC 582. This clause is also being reproduced:- "(xxxiii) That before charging tax, an assessee 1T ust be shown to have received income or the same has arisen or accrued or deemed to be so under the statute any amount which cannot be treated as above is not an income and, therefore, cannot be subjected to tax."
11. Elaborating his arguments, Mr. Khalid Anwar refe rrecl to the definition of income specified in subsection (29) of section 2 of Income Tax Ordinance, 2001 to point out that the amount subjected to collection or deduction of tax under section .148 has been included in the definition of income whereas under the repealed Income Tax, Ordinance no such provision, was inserted in subsection (24) of section 2 of the Income Tax Ordinance, 1979. He also referred to section 79 of the.Customs Act, 1969 to point out that the entry on consumption of warehousing has to be made by the owner and not importer of any imported goods. In support of his various contentions he relied on the following case-laws:--
(1) Caltex Oil (Pakistan) Ltd. v. Collector, Central Excise and Sales Tax and others 2005 PTD 480
(2) Commissioner of Income Tax Zone-C, Lahore v. Messrs Jinnah Cadet School, Lahore 2002 PTD 462.
(3) Dr. S.M. Rab v, National Refinery Limited and another PLD 2005 Kar.
478.
(4) Messrs Sutlej Cotton Mills Ltd., Okara v. The Commissioner of Income Tax, North Zone (West Pakistan), Lahore PLD 1965 SC 443..
(5) The Scindia Steam Navigation Co. Ltd. v. The Commissioner of Income Tax PLD 1959 Karachi 527.
(6) Messrs Haroon Textile Mills, Ltd. v. Commissioner of Income Tax, South Zone, Karachi PLD 1967 Karachi 532.
12. Mr. Aqeel Ahmad Abbasi learned counsel for the appellant while replying to the arguments of Mr. Khalid Anwar referred to Articles 189 and 201 of Constitution . Of Islamic Republic of Pakistan in support of his contention that once the Honourable Supreme Court has delivered the judgment in the case of Ellahi Cotton Mills (supra), it is binding on all the Courts subordinate to the Supreme Court and now in view of the judgment in Ellahi Cotton case quoted supra the Court cannot look into the vires or otherwise of the section 80-C. He submitted that the arguments of Mr. Khalid Anwer on the point of the lacuna in section 80-C whereby he wants this Court to hold that even if it is held that the respondent is the impotter, due to the lacuna in drafting of section 80-C, he cannot be brought to tax within the ambit of section 80-C, were not presented before the Income Tax Tribunal and no finding has been given by the Tribunal on this point. He said that additional evidence or additional grounds cannot be introduced for the first time before this Court. In support of his contention he relied on the following judgments:--
(1) Messrs Ahmad Karachi Halva Merchants and Ahmad Food Products v. The Commissioner of Income Tax, South Zone, Karachi 1982 SCMR 489
(2) Messrs Pakistan Refinery Ltd. v. Commissioner of Income Tax, Companies-V, Karachi 2005 PTD 2216.
13. He also relied on the case of Ellahi Cotton Mills (supra) and relied on para.34 of this judgment in which, according to him, the apex Court has thoroughly discussed the application of the presumptive tax regime.
14. We have examined the case in the light of the arguments of the learned counsel and the judgments relied on by them and carefully perused the impugned orders and the records of the case.
15. In order to ascertain the contention of the learned counsel for the respondent that this Court has already dismissed a reference application filed by Department in an other identical case by treating the proposed questions as questions of fact, we requisitioned the files of the case because if the facts were identical the judgment was binding on us then no further discussion was required.
On examination of the above case, it transpired that in that case the Income Tax Officer had treated the respondent Shell Pakistan Ltd. As an importer falling within the ambit of section 80-C of the Income Tax Ordinance, 1979 despite the fact that the respondent had contended that they were not the direct importer but merely a local purchaser as per the arrangement from Pakistan State Oil which was handling agent of Government of Pakistan because the respondent only paid the price for the quantities allocated to it as per the notification issued by the Government of Pakistan, to its agent. This contention was rejected and the Shell Pakistan was treated as an importer by the assessing officer whose order was upheld by CIT (Appeals). Before the Tribunal however, the appeal was allowed on the basis of the judgment in the present case. However, it is seen that on the facts of the case relied on by the learned counsel for respondents are not identical to the case in hand inasmuch as there were no documents on record to substantiate the Department's contention that the imports were made in the name of Shell Pakistan as the contention of Shell Pakistan throughout was that no imports were made in their name. No LCs was opened by them and no bill of entry was issued in their name and they had only purchased their allocated quantity from PSO, who were the handling agent of Government of Pakistan. It is; therefore, clear that the facts of the case are not identical to the facts of the present case and, therefore, the judgment of the learned Division Bench is not binding on us.
16. Coming to the second argument of Mr. Khalid Anwar we , asked Mr. Khalid Anwar that whether the facts that the LC was opened by the respondent, the documents were retired by the respondents and duties and taxes were paid by the respondent and bill of entry was issued in their name are correct or not. Mr. Khalid Anwar conceded that these facts are not disputed but reiterated his main contention that only the Government of Pakistan has the authority to import POL products and no private person can make such imports without the permission of the Government of Pakistan. He while recapitulating the relevant facts submitted that the Government of Pakistan had entered into a contract with foreign exporters in Kuwait and Switzerland for the import of POL products to Pakistan and the provisions of this agreement had provided that all paperwork including opening of L.C., retirement of documents and payment of duties shall .Be performed by handling agent specifically appointed by them and for this particular purpose the Government of Pakistan had appointed the present respondents as their handling agents and authorized them to perform all functions of the importer in respect of these imports.
17. On a perusal of the order passed by the Tribunal, we find that the Tribunal has completely ignored the admitted facts that the L.C. Was opened in the name of the respondent, bill of entry was prepared in the name of the respondent and the documents were retired and duties paid by the respondents and just based their judgment on the execution of the contract of imports signed with the foreign buyer by the Government and the contention of the respondent that only the Government of Pakistan was authorized to import the. PLO, products. While being carried away by these facts the Tribunal has failed to A consider the implications of section 80(c) and examine it with a view to establish whether the provisions, of section 80(c) will apply to the persons in whose name the imports have been made or they can also apply to persons who have not directly made the imports but it is established that the imports have been made on their behalf. Without disputing . The factual position that the imports were made by the respondent on behalf of the Government of Pakistan, we are of the opinion that if the Tribunal held the view that the provisions of section 80(c) will not apply to person who made the imports on his own but as an handling agent of some other person they should have discussed the relevant law and pointed out the provisions under which they had taken that view. In the absence of such an exercise just on the appreciation of a partial factual position, the action of the Tribunal cannot be sustained. Even otherwise we are of the considered opinion that a bare reading of section 80(c) makes it clear that these provisions shall be applicable only to those persons who have imported the goods filed the bill of entry and paid custom duties assessed on such bill of entry because section 80(c) applies to the person on whose account the amount is computed for the collection of tax under section 50(5) of the Income Tax Ordinance and according to the provisions of section 50(5) such tax is deductible in case of every importer of goods and not in case of any person on whose behalf the imports have been allegedly made. From a perusal of the assessment order it is seen that the Collector of Customs who was required to collect tax under section 50(5) had approached the C.B.R. To seek directions as to the steps which may be taken for recovery of the withholding tax which was not recovered at the time of clearance of goods. The contention of the learned counsel for the petitioner that section 79 of the Customs Act also provides that the owner of imported goods and not the importer shall make entry of such goods for own consumption or warehousing or by delivery to the appropriate officer bill of entry or goods declaration also does not help him as in this case the bill of entry was delivered to the appropriate officer by the respondent and is in the name of respondent.
18. Coming to the arguments of the learned counsel for respondent regarding the lacuna in the drafting of section 80(c) that the provisions of this sdction cannot be applied to any importer due to this drafting lacuna, this ground was vehemently opposed by the learned counsel for the applicant as this argument was never taken up in the arguments before the Income Tax Appellate Tribunal and, therefore, no finding has been given on this ground by the Tribunal. The learned counsel for the applicant Mr. Aqeel Ahmad Abbasi, submitted that the jurisdiction of the Court in reference application is limited to advisory jurisdiction to give opinion on questions of law arising out of the order of the Tribunal. He further pointed out that the superior Courts have fixed the categories of questions which can be adjudicated by this Court i.e. (i) those questions which were argued before and the Tribunal has given finding on such questions, (ii) those questions which were argued before the Tribunal but on which the Tribunal has not given a finding and (iii) those questions which were not argued before the Tribunal but which have been discussed by the Tribunal and finding given on them in the order. According to the learned counsel the ground/question which the learned counsel for the respondent wishes to argue upon has neither been argued before the Tribunal nor the Tribunal has discussed the above ground in its order or given any finding on it and, therefore, he pleaded that the learned counsel for respondent may not be allowed to advance argument on.
This ground. Referring to the case Caltex Pakistan Ltd. 2005 PTD 480 the learned counsel tried to distinguish it by submitting that the Honourable Supreme Court has held that in exercise of their power under Article 185(3) of the Constitution of Islamic Republic of Pakistan, 1973 they can allow a party to raise an additional question which goes to the root of the matter. Since Article 185(3) only applies to the jurisdiction of the Honourable Supreme Court according to this judgment, according to the learned counsel, only the apex Court can allow additional questions to be raised. However, even this allowability is also subject to the condition that such a contention arises from the factual appraisal of the case. Without commenting and giving our opinion oh the above contention of the learned counsel we had in the interest of justice allowed the learned counsel for the respondent to advance this argument.
19. To fully comprehend the arguments of the learned counsel reference has to be made to the provision of section 80(c) which has already been reproduced in this order for the sake of convenience the relevant portions in which the lacuna has been alleged are being reproduced again:-- "80-C. Tax on income of certain contractors and importers:--
(1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where any amount referred to in subsection (2) is received by or accrues or arises or is deemed to accrue or arise to any person, the whole of such amount shall be deemed to be income of the said person and tax thereon shall be charged at the rate specified in the First Schedule.
(2) The amount referred to in subsection (1) shall be the following, namely:-
(a) Where the person is a resident:--
(ii) The amount as computed for the purpose of collection of tax under subsection (5) of section 50 in respect of goods imported, not being goods imported by an industrial undertaking as raw material for its own consumption; and"
20. The contention of the Mr. Khalid Anwar is that the amount which is deemed to be income under subsection 121 has to be received by the person whose income it is deemed to be. According to him the amount as computed for purpose of collection of tax in respect of goods imported has not been received by the respondent and, therefore, under subsection (1), it cannot be deemed to be his income. On this point he has relied upon the sub para (xxxiii) of para 31 of the judgment of the Honourable Supreme Court in the case of Elahi Cotton Mills quoted supra.
21. We have examined the alleged lacuna in the light of the arguments of the learned counsel and have also peruse the various provisions of Income Tax Ordinance, 1979 and 2001 which he has referred to in his arguments to highlight this lacuna. The learned counsel has relied on sub-para. (xxxiii) of para.31 of the judgment of the Honourable Supreme Court in Elahi Cotton case quoted supra. We have perused the entire para.31 of the above judgment. We find that in this paragraph the apex Court has highlighted the principles of law which they have deduced from case-laws stated at the bar. The learned counsel has only relied on sub-para. (mill) but in our opinion there are other principles enunciated by the apex Court which are relevant to the present controversy.
These principles are reproduced below:-- (i)
(ii)
(iii) --------
(iv) --------
(v) --------
(vi) --------
(vii) -------- (viii)-----------
(ix) That the law should be saved rather than be destroyed and the Court must lean in favour of upholding the constitutionality of a legislation keeping in view that the rule of Constitutional interpretation is that there is a presumption in favour of the constitutionality of the legislative enactments unless ex facie it is violative of a Constitutional provision.
(x) That as per dictionary the word 'income' means "a thing that comes in". Its natural meaning embraces any profit or gain which is actually received. However, while construing the above word used in an entry in a legislative list, the above restricted meaning cannot be applied keeping in view that the allocation of the subjects to the lists is not by way of scientific or logical definition but by way of mere simplex enumeration of broad categories.
(xi) That the expression "income" includes not merely what is received or what comes in by exploiting the use of a property but also what one saves by using it oneself. For example, use of a house by its owner.
(xii) --- (xiii)------------ (xiv)------------
(xv) --------- (xvi)------------
(xvii) That generally the effect of a deeming provision in a taxing statute is that it brings within the tax net an amount which ordinarily would not have been treated as an income. In other words, it brings within the net of chargeability income not actually accrued but which supposedly to have accrued notionally.
(xviii)That when a statute enacts that something shall be deemed to have been done which in fact and in truth was not done, the Court is entitled and bound to ascertain for what purposes and between what persons the statutory fiction is to be resorted to.
(xix)That where a person is deemed to be something the only meaning possible is that whereas he is not in reality that something, the Act required him to be treated as he were with all inevitable corollaries of that state of affairs.
22. It will also be relevant to reproduce here para.34 of the above judgment which has been relied on by the learned counsel for the applicant:-- "keeping in view the above case-law and the treatises and the aforesaid legal inferences drawn therefrom, we may now revert to the question of wires of impunged sections. It may again be observed that the power to levy taxes is a sine qua non for a State. In fact it is an attribute of sovereignty of a State. It is mandatory requirement of a State as it generates financial resources which are needed for running a State and for achieving the cherished goal, namely, to establish a welfare State. In this view of the matter, the legislature enjoys plenary power to impose taxes within the framework of the Constitution. It has prima facie power to tax whom it chooses, power to exempt whom it chooses, power to impose such conditions as to liability or as to exemption as it chooses, so long as they do not exceed the mandate of the Constitution. It is also apparent that the entries in the legislative list of the Constitution are not powers of legislation but only fields of legislative heads. The allocation of the subjects to the lists is not by way of scientific or logical definition but by way of mere simple enumeration of broad catalogue. A single tax may derive its sanction from one or more entries and many taxes may emanate from one single entry. It is needless to reiterate that it is a well-settled proposition of law that an entry in the legislative List must be given a very wide and liberal interpretation. The word Income" is susceptible as to include not only what is in ordinary parlance it conveys or it is understood, but what is deemed to have arisen or accrued. It is also manifest that income-tax is not only levied in the conventional manner i.e. By working out the net income after adlusting admissible expenses and other items, but the same may also be levied or the basis of gross receipts, expenditure etc. There are new species of income-tax namely, presumptive tax and minimum tax."
23. Another important source of interpretation is the legislature intent and the Courts are required to examine what the legislative intent is to give effect to it. Section 80(c) was incorporated in the Income Tax, 1979 through Finance Act, 1991. A circular, Circular No.8 dated 30th June, 1991 was issued to explain the relevant features of Finance Act, 1991. In para.15 of this circular the provisions of section 80(c) were explained as under:- "15. Tax on income of certain contractors, suppliers and importers.---A new section namely section 80(c) has been inserted in the Ordinance which together with paragraph CCC and the substituted paragraph F of Part I of the First Schedule provides for presumptive tax for contractors, suppliers and commercial importers. The salient features of this tax regime are as under:--
(i) These provisions would apply to the following two types of amounts which have been deemed to be the income of B the recipient:-
(a) the amount representing payments on which tax is deductible under subsection (4) of section 50, other than payments on account of services rendered; and
(b) the amount as computed for the amount as computed for purposes of collection of tax under subsection (5) of section 50 in respect of goods imported, other than goods imported by an industrial undertaking as raw material for its own consumption."
This legislative intent is also clear, from the title of section 80-C, which reads as under:-- "80-C. Tax on income of certain contractors and importers."
24. In the light of the above provisions it is clear that this section seeks to levy tax on the income of importers and the contention of the learned counsel for the respondent that sub-clause (ii) of clause-A of subsection (2) of section 80(c) talks about the income of unknown person probably the exporter or the Collector Customs,' who have received abovementioned amount and not to the importers is far-fetched and not in accordance with the principles of interpretation.
25. The learned counsel in his arguments has stressed on the fact that the amount mentioned in sub-clause (ii) of clause-A of subsection (2) of section 80-C has not been received by him and therefore, the same cannot be deemed to be his ' income. We have, however, noted that in subsection (1), the amount mentioned in subsection (2) has either to be received by a person or has to accrue and arise to him or has to be deemed to accrue or arise to him. When we interpret these provisions as a whole, the natural interpretation which emerges is t at the amount mentioned in sub-clause (ii) will be deemed to accrue and arise to the person who is liable to the tax under section 50(5) to be collected from him and in this case, one who is so liable is the respondent. Our above interpretation is fully covered by the principles enunciated by the learned apex Court reproduced above and also by the findings given by their lordships in para.34 of judgment quoted supra which has also been reproduced above, specially from the extract underlined by US.
26. The definition of income in section 2(24) of the Income Tax Ordinance, 1979 also supports this interpretation as in clause-C any sum deemed to be income has also been included in definition of income.
27. We have perused the judgments relied on by the learned counsel for the respondent and are of the view that the same are not completely relevant to the controversy in hand and do not help the cause of the respondent.
28. We are, therefore, of the considered' opinion that there is no lacuna in section 80(c) and the amount as computed for the purpose of collection of tax under subsection (5) of section 50 in respect of goods imported shall be deemed to accrue or arise to the importer and shall be deemed , to be the income of such importer. We are also of the opinion that the Tribunal has misdirected itself in holding that the Government of Pakistan and not the respondent is the importer of the goods in question and, therefore, the respondent does not fall within the ambit of section 80-C(C). On the basis of above discussion the impugned judgment of the Tribunal cannot be sustained.
29. Foregoing are the. Reasons for our short order dated 17-11-2006 wherein we had answered the reframed quest ion in the negative in favour of the Department and against the assessee.
30. A copy of this judgment under the seal of the Registrar of this Court may be sent to the Registrar, Income Tax Appellate Tribunal for passing order in consonance with this judgment. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.