JUDGMENT: MR. JUSTICE SYED MANSOOR ALI SHAH.-(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; 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: 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; 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; 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: 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 alongwith 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 |g 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 214C of the Income Tax Ordinance, 2001, Section 72B of the Sales Tax Act, 1990 and Section 42B of the Federal Excise Act, 2005.
6. These writ petitions are, therefore, allowed in the above terms with no order as to cost.
SCHEDULE-A SR.
NO.WRIT PETITION NO.TITLE OF THE CASE 1.W.P. No. 31754/2012 Ahsan Iqbal W aris vs. Commissioner Inland Revenue, etc 2.W.P. No. 31830/2012 Chenab Rice Mills vs. The Federation of Pakistan, etc. 3.W.P. No. 31752/2012 Shahzad Hussain vs. Commissioner Inland Revenue, etc. 4.W.P. No. 31742/2012 M/s. Anmol Engineering W orks vs. Commissioner Inland Revenue, etc. 5.W.P. No. 31740/2012 M/s. Symans Pharmaceuticals (Pvt.) Ltd.
Vs. Commissioner Inland Revenue, etc. 6.W.P. No. 31618/2012 Presson Descon International (Pvt.) Ltd.
Vs. The Federation of Pakistan, etc. 7.W.P.No. 31616/2012 Flying Paper Industries Ltd. Vs. The Federation of Pakistan, etc. 8.W.P. No. 31614/2012 Flying Cement Company Ltd. Vs. The Federation of Pakistan, etc. 9.W.P. No. 31612/2012 Fazal Cloth Mills Ltd. Vs. The Federation of Pakistan, etc. 10.W.P. No. 31538/2012 M/s. Nestle Pakistan Ltd. Vs. The Federal Board of Revenue, etc. 11.W.P. No. 31617/2012 Flying Board & Paper Products Ltd. Vs. The Federation of Pakistan, etc. 12.W.P.No. 31619/2012 Poly Paper & Board Mills (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 13.W.P. No. 31743/2012 M/s. Chenab Limited vs. The Federation of Pakistan, etc. 14.W.P. No. 31737/2012 M/s. Alka (Pvt.) Ltd. Vs. The Commissioner Inland Revenue, etc. 15.W.P. No. 31537/2012 DG Khan Cement Co. Ltd. Vs. The Federal Board of Revenue, etc. 16.W.P. No. 31613/2012 Vega Pharmaceuticals (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 17.W.P. No. 31615/2012 Zaman Paper & Board Mills (Pvt.) Ltd. Vs. Federation of Pakistan, etc. 18.W.P. No. 31753/2012 Naseer Ahmad Baloch vs. Commissioner Inland Revenue, etc. 19.W.P.No. 31757/2012 M/s. Haji Sons vs. The Federation of Pakistan, etc. 20.W.P. No. 31769/2012 M/s. Packages Club vs. The Commissioner Inland Revenue, etc. 21.W.P. No. 31848/2012 M/s. Koh-i -Noor International vs. Federation of Pakistan, etc. 22.W.P. No. 31849/2012 M/s. Mughal Electric Engineering Co. Vs. Federation of Pakistan, etc. 23.W.P. No. 31846/2012 M/s. Hale Enterprises vs. The Federation of Pakistan, etc. 24.W.P.No. 31857/2012 M/s. Bilal Textiles (Pvt.) Ltd. Vs. The Commissioner Inland Revenue, etc. 25.W.P. No. 31858/2012 Family Hospital (Pvt.) Ltd. Vs. The Commissioner Inland Revenue, etc. 26.W.P.No. 31859/2012 M/s. Wire Manufacturing Industry Ltd. Vs. The Commissioner Inland Revenue, etc. 27.W.P.No. 31860/2012 M/s. Shaheen Dyeing vs. The Commissioner Inland Revenue, etc. 28.W.P.No. 31629/2012 M/s. Commercial Textile Dyeing and Printing Industries vs. The Commissioner Inland Revenue, etc. 29.W.P. No. 31637/2012 M/s. Royal Tubes (Pvt.) Ltd. Vs. Federation of Pakistan, etc. 30.W.P.No. 3161 1/2012 M/s. The Erectors vs. Commissioner Inland Revenue, etc. 31.W.P. No. 31571/2012 M/s. V ita Pakistan Ltd. Vs. The Federation of Pakistan, etc. 32.W.P. No. 31303/2012 M/s. Maisonette Luxury Apartments vs. Federation of Pakistan, etc. 33.W.P. No. 31780/2012 M/s. Hoover Pharmaceuticals (Pvt.) Ltd.
Vs. The Commissioner Inland Revenue, etc. 34.W.P. No. 31781/2012 M/s. Synarome Manufacturing Co. (Pvt.)
Ltd. Vs. The Commissioner Inland Revenue, etc. 35.W.P. No. 31782/2012 M/s. Noorani Industries (Pvt.) Ltd. Vs. The Commissioner Inland Revenue, etc. 36.W.P. No. 31783/2012 M/s. Sheikh Riaz Ahmad Chamara Ferosh vs. The Commissioner Inland Revenue, etc. 37.W.P.No. 31784/2012 M/s. Nabeela Kamal vs. The Commissioner Inland Revenue, etc. 38.W.P. No. 31794/2012 M/s. Coca Cola Beverages Pakistan Ltd.
Vs. The Federation of Pakistan, etc. 39.W.P. No. 30913/2012 Fine Engineering W orks (Pvt.) Ltd. Vs. The Federal Board of Revenue, etc. 40.W.P. No. 31732/2012 M/s. Benz Industries Ltd. Vs. The Commissioner Inland Revenue, etc. 41.W.P. No. 31733/2012 M/s. Al-Abid Brothers Rice Mills vs. The Commissioner Inland Revenue, etc. 42.W.P. No. 31734/2012 Riaz Sizing Industries vs. Commissioner Inland Revenue, etc. 43.W.P. No. 31738/2012 M/s. Al-Quresh Pet Bottles (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 44.W.P. No. 31739/2012 M/s. Al-Quresh Board Mills vs. The Federation of Pakistan, etc. 45.W.P.No. 31747/2012 A.G. Publications (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 46.W.P. No. 31748/2012 Jamshoro Joint V enture Ltd. Vs. The Federation of Pakistan, etc. 47.W.P. No. 31749/2012 Phoenix Aviation (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 48.W.P. No. 31750/2012 Pioneer Gas (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 49.W.P.No. 31224/2012 M/s. Rehmat Nazir Rayon (Pvt.) Ltd. Vs. Commissioner Inland Revenue, etc. 50.W.P. No. 31218/2012 Mian Muhammad Javaid vs. Commissioner Inland Revenue, etc. 51.W.P. No. 31 154/2012 M/s. Micronizer (Pvt.) Ltd. Vs. Federation of Pakistan, etc. 52.W.P. No. 31 170/2012 M/s. Feroze sons Trust vs. Federation of Pakistan, etc. 53.W.P. No. 31 156/2012 M/s. New Malik Traders vs. Federation of Pakistan, etc. 54.W.P.No. 31636/2012 M/s. Poplon and Co. (Pvt.) Ltd. Vs. Federation of Pakistan, etc. 55.W.P. No. 31628/2012 M/s. Prime Dyeing Industries vs. The Commissioner Inland Revenue, etc. 56.W.P. No. 31630/2012 M/s. Qadbross Engineering (Pvt.) Ltd. Vs. The Commissioner Inland Revenue, etc. 57.W.P. No. 31610/2012 M/s. W att N V olt vs. Commissioner Inland Revenue, etc. 58.W.P. No. 31 115/2012 M/s. Ibrahim Fibres Ltd. Vs. The Federation of Pakistan, etc. 59.W.P. No. 31690/2012 M/s. Ikram Sheesha Elmonium Markaz vs. Commissioner Inland Revenue, etc. 60.W.P.No. 31 155/2012 M/s. Pak China Manufacturing (Pvt.) Ltd.
Vs. Federation of Pakistan, etc. 61.W.P. No. 31756/2012 M/s, Infotech (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 62.W.P. No. 31879/2012 M/s. Kohinoor Sugar Mills Ltd. Vs. The Federation of Pakistan, etc. 63.W.P. No. 31880/2012 Talib Hussain vs. The Federation of Pakistan, etc. 64.W.P.No. 31881/2012 M/s. Gujranwala Electric Power Co. Ltd.
Vs. The Federal Board of Revenue, etc. 65.W.P. No. 31882/2012 M/s. Islam Soap Industries (Pvt.) Ltd. Vs. The Federation of Pakistan, etc. 66.W.P. No. 31895/2012 M/s. ICL International Pvt. Ltd. Vs. Federation of Pakistan, etc. 67.W.P. No. 31896/2012 Syed Ali Hasnain Hamdani vs. Federation of Pakistan, etc.