MUHAMMAD SAJID MEHMOOD SETHI, J.---This consolidated judgment shall decide instant appeal, along with following connected case, as common questions of law and facts are involved in these cases:- I.C.A. No.255821 of 2018 titled Commissioner Inland Revenue and others v. M/s Numeric Distribution (Pvt.) Ltd. and others
2. Through instant appeal, appellant-department has challenged the consolidated judgment dated 02.04.2018, passed by learned Single Bench of this Court, in W.P. No. 39468 of 2016 , whereby writ petitions filed by taxpayers, challenging the constitutionality of Rule 12 of the Sales Tax Rules, 2006 ("the Rules of 2006 "), were allowed and the aforesaid Rule 12 to the extent of suspension of registration of a registered person without prior notice was held to be ultra vires the Constitution of the Islamic Republic of Pakistan, 1973 ("the Constitution") as well as the main enactment, thus, same was struck down.
3. Brief facts of the case are that respondent-taxpayer challenged the constitutionality of Rule 12 of the Rules of 2006, under which the Commissioner or Board was given the power of suspension or blacklisting of sales tax registration without issuance of notice to taxpayer . The said rule has been framed under Section 21(2) of the Sales Tax Act, 1990 ("the Act of 1990"). The learned Single Bench, after hearing the arguments of learned counsel for the parties, allowed the writ petitions holding that the said rule, to the extent of suspension of registration of a registered person without prior notice, is ultra vires the Constitution as well as the main enactment, thus, same was struck down. Hence, instant appeal.
4. Learned counsel/Legal Advisor for appellant-department submits that entire scheme of the Act of 1990 is based on Universal Self-Assessment, which provided ample opportunities to the respond ent-taxpayer to furnish accurate Sales Tax Returns. He acids that the provisions of Section 21 of the Act of 1990 and Rule 12 of the Rules of 2006 only come into play when the registered person fails to follow the prescribed procedure or commits tax fraud and in that scenario, principle of substantial justice shall prevail. He further submits that the Legislature deliberately excluded the registered person, who issued fake invoices, evaded tax or committed tax fraud, from the entitlement of any further notice. He adds that such registered person, under the Act and Rules ibid, cannot be heard to say that he is still entitled to a notice and an opportunity despite his fraudulent act. In the end, he submits that this material aspect of the matter has been overlooked by learned Single Judge while passing impugned judgment, thus, same is not sustainable in the eye of law .
5. Conversely , learned counsel for respondent-taxpayer defends the impugned judgment and submits that the Rule 12 of the Rules of 2006, being violative of the due process embodied in Article 10A and fundamental rights of being dealt with in accordance with law and freedom of business contained in Articles 4, 5 and 18 of the Constitution, has rightly been struck down by learned Single Bench of this Court. In support of his contentions, he has relied upon The University of DACCA through its Vice-Chairman and another v. Zakir Ahmed (PLD 1965 Supreme Court 90), Aftab Shahban Mirani v. President of Pakistan and others (1998 SCMR 1863 ), Babar Hussain Shah and another v. Mujeeb Ahmed Khan and another (2012 SCMR 1235 ), Shabbir Ahmed v. Kiran Khursheed and 8 others (2012 CLC 1236 ) and Messrs D.J. Builders and Developers through Partner and another v. Federation of Pakistan through Secretary , Ministry of Finance, Islamabad and 6 others (2016 PTD 1723 ).
6. Arguments heard. Available record perused.
7. Section 21(2) of the Act of 1990 envisages that where the Commissioner is satisfied that a registered person is found to have issued fake invoices or committed tax fraud, he may blacklist such person or suspend his registration in accordance with such procedure presc ribed by the Federal Board of Revenue. Rule 12 of the Rules of 2006 has been framed by taking authority of Section 21(2) of the Act of 1990. Rule 12 ibid confers an unbridled and unfettered power on the Commissioner concerned to suspend a registration of a registered person without notice and without affording an opportunity of hearing. The term 'satisfaction' must be subject to preliminary inquiry , perusal of record that registered person has issued fake invoices and issuance of Show-Cause Notice to registered person so as to enable the person to upend the satisfaction already arrived at by the Commissioner .
In this regard, Article 10A of the Constitution ensures fair trial and due proces s of law, which is reproduced hereunder:-- "10A. For the determination of his civil rights and obligations or in any criminal charge against him a person shall be entitled to a fair trial and due process."
8. Suspension of registration, without providing opportunity of hearing, offends the due process as contained in Article 10A of the Constitution. Likewise Article 18 of the Constitution confers the right on a person to enter any lawful profession or occupation and to conduct any lawful trade or business. Rule 12 impairs the right under Article 18 of the Constitution, conferred on all citizens.
9. Needless to say that Hon'ble Apex Court, in the case of Babar Hussain Shah and another supra, has shed light on the subject of due process in the following manner:-- "11.... Although from the very inception the concept of fair trial and due process has always been the golden principles of administration of justice but after incorporation of Article 10-A in the Constitution of the Islamic Republic of Pakistan, 1973 vide 18th Amendment, it has become more important that due process should be adopted for conducting a fair trial and order passed in violation of due process may be considered to be void....
10. Article 10A of the Constitution ensures right to fair trial. The Authority is under duty to confront the person against whom any adverse order is being passed, with proper notice detailing the reasons for taking any adverse action. No adverse order can be passed against a person without issuing notice and / or confronting the said person before passing any order . The spirit of Article 10A is premised on said proposition of law .
11. The term "due process of law" has been summarized by the Hon'ble Apex Court in the case of Aftab Shahban Mirani supra, with the following observation:- "12 .... It may be observed that by now it is a well settled proposition that a person cannot be condemned without providing him a fair opportunity to meet the allegation. In this regard reference may be made to the case of Government of Balochistan through Additional Chief Secretary v. Azizullah Memmon and 16 others (PLD 1993 SC 341), wherein after referring certain case law the following conclusion was recorded by this Court as to the right of access to Courts and justice:-- "12. Another aspect of the case is that by these provisions the rights of access to Courts and justice has been denied. This by itself is an infringement of fundamental rights which provide that every citizen shall be entitled to equal protection of law and will not be deprived of life or liberty save in accordance with law. An examination of Articles 9 and 25 read collectively does not permit the Legislature to frame such law which may bar right of access to the Courts of law and justice. This aspect of the case was considered in Sharaf Faridi v. Islamic Republic of Pakistan (PLD 1989 Karachi 404) when after referring to Syed Abul A'la Maudoodi's case (PLD. 1964 SC 673 at 710) and Ms. Benazir Bhutto's case ( PLD 1988 SC 416 ) had observed as follows:- "The right of 'access to justice to all' is a well-recognized inviolable right enshrined in Article 9 of the Constitution.
This right is equally found in the doctrine of 'due process of law. The right of access of justice includes the right to be treated according to law, the right to have a fair and proper trial and a right to have an impartial Court or Tribunal. This conclusion finds support from the observation of Willoughby in Cons titution of United States, Second Edition, V ol.II at page 1709 where the term 'due process of law' has been summarised as follows:--
(1) He shall have due notice of proceedings which af fect his rights.
(2) He shall be given reasonable opportunity to defend.
(3) That the Tribunal or Court before which his rights are adjudicated is so constituted as to give reasonable assurance of his honesty and impartiality , and
(4) That it is a Court of competent jurisdiction."
12. In the impugned judgment, learned Single Judge has aptly discussed the due process of law, 'the relevant portion whereof is reproduced hereunder:-- "19. Besides, it is an immutable principle that in all proceedings whether judicial or administrative, the principles of natural justice have to be observed if the proceedings might result in consequences affecting the person or property or other right of the parties concerned. Therefore, where a person is empowered to take decisions after factual investigation into the facts which would result in consequences affecting the person, property or other right of any other person, then the courts have inclined generally to imply that the power so given is coupled with a duty to act in accordance with the principles of natural justice and fairness. [The University of Dacca through its Vice- Chancellor and the Registrar , University of Dacca v . Zakir Ahmed (PLD 1965 Supreme Court 90)]
20. Undoubtedly the power of suspension of registration without prior notice is unlawful and impinges upon the rights of the petitioners to be treated in accordance with law and to be af forded due process of law ."
13. Learned Legal Advisor for appellant-department has failed to point out any illegality or legal infirmity in the above impugned/ findings, thus, same are liable to be upheld in circumstances.
14. Resultantly , instant appeal, along with connected appeal, being devoid of any merit, is hereby dismissed with no order as to costs.