UMAR ATA BANDIAL, J.---The petitioner Re-rolling Mills were charged with sales tax pursuant to C.B.R. Order dated 25-10-1997 wherein 200 units of electricity consumption was treated as reflecting manufacture of one metric ton of mild steel products. This indirect calculation of production based on electricity consumption was devised A with the consent of the Re-rolling Mills Association of which the petitioner is a member.
2. Subsequently, by order dated 24-4-2001 the C.B.R. Amended the calculation and reduced to 130 units, the electricity consumption that represents the manufacture of one metric ton of mild steel products. The new formula for assessing production is challenged by the petitioner solely on the ground that the respondents have applied it retrospectively with effect from 1-7-2000. Learned counsel for the respondent submits that the petitioner deposited the bulk of his liability and decided to challenge the taxing measure after a delay of longer than one year. He opposes maintainability of the petition on grounds of estoppel, laches and availability of alternate remedy.
On the merits, however, he is unable to show law authorizing C.B.R. To impose a retrospective formula of assessm ent on the basis of the alleged consent of the petitioner's association rather than the petitioner itself.
2. Under the rule laid down by the Hon'ble Supreme Court Messrs Pfizer Laboratories Limited v.
Federation of Pakistan and others PLD 1998 SC 64 a taxing department must justify its taxing measures on the basis of lawful authority. This is the mandate of Article 177 of the Constitution. A taxing measure cannot be validated on the basis of the consent of an assessee. The other legal principle relevant to the present case is that executive measures having adverse effect on the property or rights of a citizen cannot be applied retrospectively.
3. However, an important factual point in the case is that the petitioner accepts the validity and binding effect of the assessm ent formula agreed by the petitioner's association. That agreement is about assessm ent rather than charging of a tax; consent in such matters is a means of settlement.
But the question is whether the agreement with the association provides for retrospective application of the assessm ent formula. The matter is, therefore, sent back to the respondent No,3 for verification whether the date of enforcement of the new assessment formula is indeed as stated in the impugned order dated 24-4-2001. If such date is determined in the documents constituting the agreement then the petitioner shall be bound by it otherwise the demand in question shall be illegal. Disposed of.
4. The aforesaid inquiry shall be conducted and completed in accordance with law within two months from the date of receipt of a certified copy of this order by the respondent.