SARDAR MUHAMMAD IQBAL, J.--Ghulam Shabbir Shah, petitioner, was a shareholder of Fazal Abbas & Co. Ltd., Chiniot, District Jhang. The Company was assessed to income-tax and was required to pay as tax a sum of Rs, 26,561.00 for the years 1949 to 1954. The petitioner was served with a notice by the Income-tax Officer requiring him to pay Rs, 2,592.00 as his share of the amount of Income-tax payable by Fazal Abbas & Co. Ltd. It was done after the respondents secured the names of the shareholders of the Company from the Registrar, Joint Stock Companies, and distributed the tax over the different shareholders. The Income-tax Officer also sent a certificate under section 46 of the Income-tax Act to the Collector, Jhang, for the recovery of the amount as arrears of land revenue. The Tehsildar, Chiniot, asked the petitioner to pay the aforementioned amount of tax vide notice dated the 18th of November 1958 (Annex. `B'). The petitioner has challenged the liability through this petition.
2. The Income-tax Officer in his reply raised a preliminary objection that the petitioner had the remedies under the Income-tax Act to challenge his order and since those alternate remedies have not been exhausted before approaching this Court, the petition was not competent. He further took up the position that the petitioner was a shareholder of the Company the initial capital of the Company was Rs, 2,00,000.00 out of which the called up capital was Rs, 52,750.00 and that the petitioner, therefore, was liable for the proportionate share. The Income-tax Officer, however, failed to cite any law in support of this averment.
3. It was stated in the petition that the Income-tax Officer might have proceeded under section 44 of the Income-tax Act to hold the petitioner liable. Section 44 applies to cases where any business, profession, or vocation carried on by a firm or association of persons has been discontinued, or, where the firm or an association of persons is dissolved, assessment could be made on the firm, the partners of the firm, the association of persons or the members thereof, as if no such discontinuance or dissolution has taken place and every person who was at the time of such discontinuance or dissolution a partner of such firm or a member of such association could, in respect of the income, profits and gains of the firm or association, be held jointly and severally liable for the amount of tax payable by the firm or association of persons. This provision is applicable only to a firm or an association of persons. It is not applicable to a company incorporated under the Companies Act for the reason that after a company is registered, it, by operation of law, becomes a person itself. A company is not an association of persons. Section 44, therefore, could not be pressed into service in making any of the shareholders liable even if the company was wound up. It appears that the difficulty was realised by the Legislature and to overcome it, section 43-B was added by Act XVI of 1963, relevant part of which provides : where any private company is wound up and any tax assessed on the company, whether before, or in the course of, or after its liquidation, in respect of any income of any previous year cannot be recovered, every person who was a director of the private company at any time during the relevant previous year shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company." If section 44 had been applicable to such a case, there was no point in enacting section 43-B. The said provision again does not make a shareholder liable either during the subsistence of the company or when it is wound up. A director of a private limited company can be proceeded against in certain circumstances envisaged therein and that too only after the company is wound up.
The order passed by the Income-tax Officer is without jurisdiction.
4. We find no force in the plea taken up by the Income-tax Officer that since the petitioner had an alternate remedy available to him by way of an appeal to challenge the impugned notice, the writ petition was not competent. As already observed, the impugned notice is without jurisdiction. The alternate remedy of appeal, in the circumstances, cannot operate as a bar for entertaining a petition which was filed before the coming into operation of the 1962-Constitution. In Tariq Transport Co., Lahore v. Sargodha-Bhera Bus Service, it was held by Muhammad Munir, C. J., that in case of absence of jurisdiction a certiorari may be granted even though the right of statutory appeal has not been availed of. S. A. Rahman, J., held in S. A. Haroon v. Collector of Customs, Karachi: "In most cases, Courts would act on the general common law rule 'that certiorari will not lie when there is another adequate remedy by appeal, writ of error or otherwise, where an inferior Court has jurisdiction' (Ferris on Extraordinary Legal Remedies, p. 185). But in a proper case where the question of jurisdiction is raised, the extraordinary jurisdiction of the High Court may be successfully invoked by way of certiorari". Again in Muhammad Amir Khan v. Controller of Estate Duty, the attack was on the very jurisdiction of the Controller of Estate Duty to proceed with the assessm ent of estate duty on account of section 74-A of the Estate Duty Act and an appeal had been bled during the pendency of the writ petition. It was held by their Lordships of the Supreme Court that the appeal could not stand in the way of the exercise of writ jurisdiction by the High Court, and that where an order is challenged as wholly without jurisdiction, a petition for a writ is a more appropriate remedy. In the cases of absence or excess of jurisdiction an alternate remedy has never been considered an adequate remedy for the reason that it is necessary A to give a quick relief in respect of orders which are a nullity, and, therefore, non est. In Nagina Silk Mill v.
Income-tax Officer, it was observed by S. A. Rahman, J: "In cases of absence or excess of jurisdiction or where the impugned order suffers from illegality on the face of the record, a certiorari may be granted even though the right of statutory appeal had not been availed of." All these authorities are of a period prior to the enforcement of the Constitution of the Islamic Republic of1 2 3 4 Pakistan, 1962. The present writ petition also relates to a period prior to that. In the case of absence of jurisdiction, the position even after the Constitution of 1962, is not different. In Fazal Din v.
Commissioner, Peshawar, it was held that a writ petition is "competent without exhausting the remedy of appeal in a case where there is an absence of jurisdiction. In regard to the initial lack of jurisdiction, the position admits of no doubt, because in any such case the order of a tribunal is a nullity and has no existence in the eye of law". It was further observed : "An absence of jurisdiction may occur when the authority has not been constituted as required by the statute or the person proceeded against is not subject to the jurisdiction of that authority or the ground on which the action is taken was not within the grounds stated by the statute or the order made is such as could not have been made under the statute". The shareholders of a company are not subject to the jurisdiction of the Income-tax Officer for making payment of the income-tax assessed on the company. The action taken by him is not within B the grounds stated by the Income-tax Act, and the order is such which could not have been made under the Act. The order of the Income-tax Officer thus being without jurisdiction could be challenged by means of a writ petition notwithstanding an alternate remedy of appeal being available to the petitioner.
5. In result, we accept the petition and declare that the impugned notice of demand is without lawful authority and consequently of no legal effect. We shall make no order as to costs. PLD 1958 SC (Pak.) 437 PLD 1959 SC (Pak.) 177 PLD 1961 SC 119 PLD 1963 SC 322 PLD 1968 Pesh. 30