1. This judgment shall decide this petition, as well as, petitions mentioned in Schedule-A to this judgment as similar questions of law and facts arise in these cases.
2. After arguing the case at some length, the parties have arrived at the following consensus:--
(a) That notices for selection of audit for Tax Year 2011, which have been impugned in the instant petition, as well as, in the petitions mentioned in Schedule-A may be set aside and the process of audit be initiated afresh by the FBR after framing the parameters for selection of audit, keeping in view the following guidelines:
(i) That Federal Board of Revenue in terms of Section 214C of the Income Tax Ordinance, 2001, Section 72B of the Sales Tax Act, 1990 and Section 42B of the Federal Excise Act, 2005, shall frame three separate sets of parameters for selection of cases for audit under the three tax laws;
(ii) That after the selection process has been carried out independently under all the three tax laws, if the Federal Board of Revenue wishes to further narrow down the selection through carrying out risk analysis (as already done in these cases) the same may be done separately under each tax law;
(iii) That a day or so prior to the selection of cases for audit the Federal Board of Revenue shall publicize the parameters settled, in the manner above, for the concerned tax year in the print media, as well as, upload the same on the website of FBR to facilitate the taxpayers;
(iv) That notices (separate notices under different tax laws) issued to the taxpayers selected for audit shall clearly specify the parameters attracted in their cases in order to make the process transparent;
(v) The Federal Board of Revenue will also consider establishing a Grievance/Review Panel to attend to the issues/questions arising out of the audit selection process. This will alleviate the anxiety of the taxpayers and may also avoid further litigation.
3. Additionally, the petitioners vehemently argued that the Federal Board of Revenue has not framed the parameters for selection of audit under the aforesaid laws. The parameters reflected in Letter dated 24-10-2012 issued by the Federal Board of Revenue Taxpayer's Audit Wing has been issued under the signature of M. Majid Qureshi, Chief (Taxpayer's Audit) (who is present in person) but does not have the approval of the FBR. In response Dr. Tariq Masood, Additional Commissioner, FBR (HQ) Karachi on behalf of respondent FBR referred to Section 8 of the Federal Board of Revenue Act, 2007, as well as Rule 3 of the Federal Board of Revenue Rules, 2007 ("Rules") to submit that said powers stand delegated to Member (Audit). He, however admitted that there is no specific notification delegating the powers under the aforementioned audit provisions in favour of the Member (Audit) but justified the same by relying on Rule 3(3) of the Rules to submit that the said powers can be exercised by the Member (Audit) till delegation takes place.
4. I was minded to proceed further to consider the question of delegation of the powers of the Board in terms of Section 214C of the Income Tax Ordinance, 2001, Section 72B of the Sales Tax Act, 1990 and Section 42B of the Federal Excise Act, 2005 along with the vires of Rule 3 in the background of the parent Act i,e,, Federal Board of Revenue Act, 2007 and the legality of Letter dated 24-10-2012 issued by Chief (Taxpayer's Audit). However, at this stage learned counsel for the Respondent Federal Board of Revenue, namely Mr. Muhammad Ilyas Khan, Advocate assured the Court that as the entire audit process is being initiated afresh, FBR will also reconsider the question of delegation and will proceed in framing the parameters for selection of audit strictly in accordance with law. On this assurance given by the learned counsel for the respondent FBR, the question of delegation does not require further deliberation in this case.
5. In view of above arrangements arrived at between the parties, the impugned notices for selection of audit for the Tax Year 2011 are set aside. Respondent FBR will initiate the process of audit afresh in the light of the above guidelines and fully comply with the mandate given under Section 214-C of the Income Tax Ordinance, 2001, Section 72-B of the Sales Tax Act, 1990 and Section 42-B of the Federal Excise Act, 2005.
6. These writ petitions are, therefore, allowed in the above terms with no order as to cost.
2. SCHEDULE-A Sr. No,Writ Petition No, Title of the Case.
3. 1 W.P.No, 31754 of 2012Ahsan Iqbal Waris v.Commissioner Inland Revenue and others 2 W.P.No, 31830 of 2012Chenab Rice Mills v. The Federation of Pakistan and others 3 W.P.No, 31752 of 2012Shahzad Hussain v.Commissioner Inland Revenue and others 4 W.P.No, 31742 of 2012Messrs Anmol Engineering Works u. Commissioner Inland Revenue and others 5 W.P.No, 31740 of 2012Messrs Symans Pharmaceuticals (Pvt.) Ltd. v. Commissioner Inland Revenue and others 6 W.P.No, 31618 of 20.12Presson Descon International (Pvt.) Ltd. v. The Federation of Pakistan and others 7 W.P.No, 31616 of 2012Flying Paper Industries Ltd. v.
4. The Federation of Pakistan and others 8 W.P.No, 31614 of 2012Flying Cement Company Ltd. v. The Federation of Pakistan and others 9 W.P.No, 31612 of 2012Fazal Cloth Mills Ltd. v. The Federation of Pakistan and others 10 W.P.No, 31538 of 2012Messrs Nestle Pakistan Ltd. v.
5. The Federal Board of Revenue and others 11 W.P.No, 31617 of 2012Flying Board and Paper Products Ltd. v. The Federation of Pakistan and others 12 W.P.No, 31619 of 2012Poly Paper and Board Mills (Put.)
6. Ltd. v. The Federation of Pakistan and others 13 W.P.No, 31743 of 2012Messrs Chenab Limited v.
7. The Federation of Pakistan and others 14 W.P. No, 31737 of 2012Messrs Alka (Pvt.) Ltd. v.
8. The Commissioner Inland Revenue and others 15 W.P. No, 31537 of 2012DG Khan Cement Co. Ltd. v. The Federal Board of Revenue and others 16 W.P. No, 31613 of 2012Vega Pharmaceuticals (Put.) Ltd. v. The Federation of Pakistan and others 17 W.P. No, 31615 of 2012Zaman Paper and Board Mills(Pvt.) Ltd. v. Federation of Pakistan and others 18 W.P. No, 31753 of 2012Naseer Ahmad Baloch v.
9. Commissioner Inland Revenue and others 19 W.P. No, 31757 of 2012Messrs HO Sons v. The Federation of Pakistan and others 20 W.P. No, 31769 of 2012Messrs Packages Club v. The Commissioner Inland Revenue and others 21 W.P. No, 31848 of 2012Messrs Koh-i-Noor International v. Federation of Pakistan and others 22 W.P. No, 31849 of 2012Messrs Mughal Electric Engineering Co. v. Federation of Pakistan and others 23 W.P. No, 31846 of 2012Messrs Hale Enterprises v.
10. The Federation of Pakistan and others 24 W.P. No, 31857 of 2012Messrs Bilal Textiles (Pvt.)
11. Ltd. v.
12. The Commissioner Inland Revenue and others 25 W.P. No, 31858 of 2012Family Hospital (Pvt.) Ltd. v.
13. The Commissioner Inland Revenue and others 26 W.P. No, 31859 of 2012Messrs Wire Manufacturing Industry Ltd. v. The Commissioner Inland Revenue and others 27 W.P. No, 31860 of 2012Messrs Shaheen Dyeing u. The Commissioner Inland Revenue and others 28 W.P. No, 31629 of 2012Messrs Commercial Textile Dyeing and Printing Industries v. The Commissioner Inland Revenue and others 29 W.P. No, 31637 of 2012Messrs Royal Tubes (Pvt.)
14. Ltd. V. Federation of Pakistan and others 30 W.P. No, 31611 of 2012 Messrs The Erectors v.
15. Commissioner Inland Revenue and others 31 W.P. No, 31571 of 2012 Messrs Vita Pakistan Ltd. v.
16. The Federation of Pakistan and others 32 W.P. No, 31303 of 2012Messrs Maisonette; Luxury Apartments v. Federation of Pakistan and others 33 W.P. No, 31780 of 2012Messrs Hoover harmaceuticals (Put.) Ltd. v. The Commissioner Inland Revenue and others 34 W.P. No, 31781 of 2012 Messrs Synarome Manufacturing Co. (Pvt.) Ltd. v. The Commissioner Inland Revenue and others 35 W.P. No, 31782 of 2012Messrs Noorani Industries (Put.) Ltd. v. The Commissioner Inland Revenue and others 36 W.P. No, 31783 of 2012Messrs Sheikh Riaz Ahmad Chamara Ferosh v. The Commissioner Inland Revenue and others 37 W.P. No, 31784 of 2012Messrs Nabeela Kamal v. The Commissioner Inland Revenue and others 38 W.P. No, 31794 of 2012Messrs Coca Cola Beverages Pakistan Ltd. v. The Federation of Pakistan and others.
17. 39 W.P. No, 30913 of 2012Fine Engineering Works (Pvt.)
18. Ltd. v. The Federal Board of Revenue and others 40 W.P. No, 31732 of 2012Messrs Benz Industries Ltd. v.
19. The Commissioner Inland Revenue and others 41 W.P. No, 31733 of 2012Messrs Al-Abid Brothers Rice Mills v. The Commissioner Inland Revenue and others 42 W.P. No, 31734 of 2012Riaz Sizing Industries v.
20. Commissioner Inland Revenue and others 43 W.P. No, 31738 of 2012Messrs Al-Quresh Pet Bottles (Pvt.) Ltd. v. The Federation of Pakistan and others 44 W.P. No, 31739 of 2012Messrs Al-Quresh Board Mills v. The Federation of Pakistan and others 45 W.P. No, 31747 of 2012AG. Publications (Pvt.) Ltd. v.
21. The Federation of Pakistan and others 46 W.P. No, 31748 of 2012Jamshoro Joint Venture Ltd. v. The Federation of Pakistan and others 47 W.P. No, 31749 of 2012Phoenix Aviation (Pvt.) Ltd. v.
22. The Federation of Pakistan and others 48 W.P. No, 31750 of 2012Pioneer Gas (Pvt.) Ltd. v.
23. The Federation of Pakistan and others 49 W.P. No, 31224 of 2012Messrs Rehmat Nazir Rayon (Pvt.) Ltd. v. Commissioner.
24. Inland Revenue and others 50 W.P. No, 31218 of 2012Mian Muhammad Javaid v.
25. Commissioner Inland Revenue and others 51 W.P. No, 31154 of 2012Messrs Micronizer (Pvt.) Ltd. v.
26. Federation of Pakistan and others 52 W.P. No, 31170 of 2012Messrs Ferbzesons Trust v.
27. Federation of Pakistan and, others 53 W.P. No, 31156 of 2012Messrs New Malik Traders v.
28. Federation of Pakistan and others 54 W.P. No, 31636 of 2012 Messrs Poplon and Co. (Pvt.)
29. Ltd v. Federation of Pakistan and others 55 W.P. No, 31628 of 2012Messrs Prime Dyeing Industries v. The Commissioner Inland Revenue and others 56 W.P. No, 31630 of 2012Messrs Qadbross Engineering (Pvt.) Ltd. v. The Commissioner Inland Revenue and others 57 W.P. No, 31610 of 2012 Messrs Watt N Volt v.
30. Commissioner Inland Revenue and others 58 W.P. No, 31115 of 2012Messrs Ibrahim Fibres Ltd. v.
31. The Federation of Pakistan and others 59 W.P. No, 31690 of 2012Messrs Ikram Sheesha Elmonium Markaz v.
32. Commissioner Inland Revenue and others 60 W.P. No, 31155 of 2012Messrs Pak China Manufacturing (Pvt.) Ltd. v. Federation of Pakistan and others 61 W.P. No, 31756 of 2012Messrs Infotech (Put.) Ltd. v.
33. The Federation of Pakistan and others 62 W.P. No, 31879 of 2012Messrs Kohinoor Sugar Mills Ltd. V. The Federation of Pakistan and others 63 W.P. No, 31880 of 2012Talib Hussain v. The Federation of Pakistan and others 64 W.P. No, 31881 of 2012Messrs Gujranwala Electric Power Co. Ltd. v. The Federal Board of Revenue and others 65 W.P, No 31882 of 2012 Messrs Islam Soap Industries (Pvt.) Ltd. v. The Federation of Pakistan and others 66 W.P. No, 31895 of 2012Messrs ICL International (Pvt.)
34. Ltd. v. Federation of Pakistan and others 67 W.P. No, 31896 of 2012Syed Ali Hasnain Hamdani v.
35. Federation of Pakistan and others