Abid Aziz Sheikh, J.- This judgment will also decide writ petitions mentioned in Appendix-A, as common questions of law and facts are involved in all these petitions. Through these constitutional petitions, the petitioners have inter-alia challenged the vires of subsection (1A) of section 214C of the Income Tax Ordinance, 2001 (Ordinance) being ultra vires of the Constitution of Islamic Republic of Pakistan, 1973 (Constitution).
Petitioners in these constitutional petitions though have sought multiple prayers, but at the time of arguments, the impugned challenge has been confined to only vires of section 214C(1A) of the Ordinance, however, petitioners have reserved their right to agitate other issues through separate constitutional petitions, if need be.
2. Due to commonality of questions of law and facts involved in these petitions, it is not necessary to narrate or advert to the facts in each one of the case separately . However , to illustrate the factual background upon which, these constitutional petitions are founded, it is convenient to narrate the facts in the instant matter i.e. writ petition No.10035/2017. The provision of section 214C of the Ordinance for selection of Audit by Board was introduced through Finance Act, 2010. Consequently , the Federal Board of Revenue (Board) issued Audit Policy , 2016 to conduct parametric selection of audit in terms of section 214C of the Ordinance. The petitioner was informed through notice dated 19.1.2017, that petitioner 's case has been selected for audit and that said audit would be held in terms of section 214C of the Ordinance. The petitioner requested for audit param eters on the basis of which, the petitioner was selected for audit through its representation on 20.2.2017 under section 7 of the Federal Board of Revenue Act, 2007 (FBR Act). However , the said representation was declined on 29.3.2017 on the ground that in view of section 214C(1A) of the Ordinance, the audit parameters could not be communicated to the petitioner . The similar response was also given to other petitioners who were selected for audit under parametric selection. All these petitioners being aggrieved have filed these constitutional petitions challenging the vires of subsection (1A) of section 214C of the Ordinance (herein after referred to as impugned provision ).
3. Mr. Muhammad Ajmal Khan, Advocate, one of the learned counsel for the petitioners argued that impugned provision of section 214C(1A) of the Ordinance, which required the Board to keep the parameters for selection of case for audit confidential is ultra vires of provision of Articles 4,8,10-A,19 and 19-A of the Constitution. Further submits that decision of Board to keep the parameters for selection of audit confidential is also against the law settled by this Court in Messrs Premier Industrial Chemical Manufacturing Co. vs. Commissioner Inland Revenue etc (2013 PTD 398 ) and Messrs Ittefaq Rice Mills vs. Federation of Pakistan and others (2013 PTD 1274 ).
4. Mr. Naveed A. Andrabi, Advocate for petitioners submits that provision of section 214C(1A) does not specifically restrain the Board after selection, from disclosing the specific parameter on the basis of which, the petitioners are selected for audit and therefore, Board is mis-constructing the impugned provisio n of section 214C(1A). Further submits that impugned provision is violative of petitioner 's fundamental right of fair trial and due process guaranteed under Article 10-A of the Constitution. Submits that even petitioner 's right of business under Article 18 of the Constitution has been infringed as petitioners have unnecessarily been involved in giving details of their accounts, during audit without any specific allegation. He submits that judgment of CIT vs. Media Network etc (2006 PTD 2502 ) referred to in replies filed by respondent department relates to pre-filing of return period under Income Tax Ordinance, 1979 (Repealed Ordinance) and not to post filing of return situation, under present Ordinance. He therefore, submits that observations made in said judgment cannot be made basis to impose restrictions on petitioner 's fundamental right of information through impugned provision. He submits that judgment of CIR vs. Allah Din Steel (2018 SCMR 1328 ) is also based on audit through computer balloting and not on parametric selection of audit which is on different footing. He therefore, argued that law settled by this Court in DHA vs. CIR (2015 PTD 2538 ) regarding parametric audit shall remain applicable.
5. Mr. Abad-ur-Rehman, Advocate for petitioners argued that risk parameters are negative indicators and alleged violation of law, therefore, non-disclosure of said parameters amounts to violation of due process of law under Article 10-A of the Constitution. He submits that without confronting any allegation, petitioner cannot be asked to produce books of accounts as it will amount to self incrimination, not permissible under Article 13(b) of the Constitution. He submits that audit by Commissioner under section 177 of the Ordinance is a structured discretion, whereas impugned provision rendered audit under section 214C of the Ordinance as unstructured and granted arbitrary discretionary power to Board, which is not permissible under law. He submits that right of information is guaranteed under Article 19 and 19-A of the Constitution and the impugned provision is not only violative of said Articles and but also does not fall in the exceptions provided in the said Articles or Right of Access to Information Act, 2017. He submits that no similar confidentiality is attached to the audit parame ters for sales tax or excise duty audit, which also result in discrimination with the petitioner , regarding income tax audit. He finally submits that even if the impugned provision is not to be strike down, it can be read down so as to bring it inconsonance with the other similar tax provisions and the constitution. Mr. Shahbaz Butt, Advocate and other learned counsel for the petitioners reiterated and adopted the same arguments on behalf of the petitioners.
6. Mr. Liaquat Ali Ch., learned counsel for the respondent FBR on the other hand argued that mere selection for audit does not cause any actionable injury to tax payers. Submits that guidelines for selection of audit are administrative in nature and meant only for internal consumption of tax authorities, therefore, no fundamental right of petitioners has been infringed for not disclosing said guidelines. He placed reliance on cases of Messrs Allah Din Steel and Messrs Media Network and others supra. Submits that restriction through impugned provision on right of information, is reasonable to avoid tax evasion as also observed by Hon'ble Supreme Court in M/S Media Network case supra. Submits that Article 10-A of the Constitution is not applicable because due process is only required, where person is condemned but in the present cases, mere selection of audit does not amount to an assessment order or impose any tax liability . Submits that selection of audit being not a matter of public importance, the Article 19-A of the Constitution is also not attracted. He submits that where legislation has in clear terms kept parameters confidential, the Court cannot look into the wisdom of legislation to strike down the law.
Submits that even principle of reading down is not attracted in the present cases. He placed reliance on Fauji Foundation and another vs. Shamimur Rehman (PLD 1983 Supreme Court 457), Province of Sindh through Chief Secretary and others vs. M.Q.M. through Deputy Convener and others (PLD 2014 Supreme Court 531), Syed Mukhtar Hussain Shah vs. Mst. Saba Imtiaz and others (PLD 2011 Supreme Court 260), The Punjab Province vs. Malik Khizar Hayat Khan Tiwana (PLD 1956 F.C 200), Lahore Development Authority through D.G and others vs. Ms. Imrana T iwana and others (2015 SCMR 1739 ).
7. Mr. Muhammad Asif, learned counsel for the respondent department argued that section 214C of the Ordinance has to be read holistically to interpret the impugned provision. He submits that reading of above provision as a whole, shows that said parameters are to be kept confidential from persons or class of persons who are selected for audit. Submits that impugned provision is a non-obstante and mandatory clause, hence binding on the FBR.
Submits that learned Sindh High Court in Suit No.1277/2018 titled Azee Securities (Pvt.) Limited vs. Federation of Pakistan etc has already upheld the vires of section 214C(1A) of the Ordinance.
8. Malik Abdullah Raza, Advocate also representing the respondent department argued that the impugned provision should be given its literal meaning and there is no scope for reading-in or reading out words from the said provision. He submits that in case, the legislation intended that parameters be disclosed to the assessee, the said exception could be provided in section 214C of the Ordinance, in same manner as exceptions have been provided in section 216 of the Ordinance. He placed reliance on The Collector of Sales Tax, Gujranwala and others vs. Messrs Super Asia Mohamma d Din and Sons and others (2017 SCMR 1427 ), Khan Gul Khan and others vs. Daraz Khan (2010 SCMR 539), Federation of Pakistan and others vs. Ammar Textile Mills (Pvt.) Limited and others (2002 SCMR 510), Star Textile Ltd and 5 others vs. Governm ent of Sindh etc (2002 SCMR 356) and Messrs MKB Spinning Mills (Pvt.) Ltd vs. Federation of Pakistan and others (2018 PTD 2364 ). He further submits that the FBR has already introduced rule 231-F of the Income Tax Rules, 2002 (Rules) to disclose the general principles on the basis of which, the audit parameters are framed, hence, there is no need to disclose entire audit parameters.
9. Mr. Zafar Iqbal Ch., Advocate on behalf of respondent department submits that under Article 19-A of the Constitution, the right of information, is for matter of public importance subject to reasonable restrictions. He submits that neither petitioner claim for disclosure of parameters is a matter of public importance nor it can be argued that confidentiality through impugned provision is not a reasonable restriction. Submits that Hon'ble Supreme Court in Messrs Media Network case already observed that prior disclosure of parameters may result in massive evasion and mis-use of audit policy . He also placed reliance on Kohinoor Sugar Mills vs. Federation of Pakistan and others (2018 PTD 821) to argue that petitioner will have no caus e of action, if parameters are not disclosed, as proper notice and hearing be given to assessee under section 177(6) of the Ordinance after selection for audit.
10. Mr. Azmat Hayat Khan Lodhi, Assistant Attorney General appeared on behalf of Federation and also in pursuant to notice under Order XXVII-A CPC. He submits that reply filed by FBR may be treated as reply of the Federation.
He submits that petitioners have no locus-standi to challenge the vires of section 214C(1A) of the Ordinance as mere selection for audit does not amount to actionable claim. He submits that no discrimination has been made with the petitioners as audit policy is applicable across the board in the country. He placed reliance on Messrs Allah Din Steel case supra to submit that no vested right has been taken away as selection of audit is not an adverse order.
He also supported the arguments of learned counsel for the respondent department and FBR to submit that disclosure parameters will cause mis-use of audit policy as held by Hon'ble Supreme Court in Media Network case supra. Learned Assistant Attorney General submits that matter pertaining to parameters for selection of Audit, throughout the country , is indeed a matter of public importance and Article 19-A of the Constitution is attracted. He however , submits that impugned provision is a reasonable restriction on right of information under Article 19-A of the Constitution and also covered under the exceptions provided under section 16(1)(d)(i) of the Right of Access to Information Act, 2017 (Act of 2017) .
11. I have heard the arguments of learned counsel for the parties and perused the record with their able assistance.
12. Section 214C of the Ordinance was promulgated through Finance Act, 2010 which was further amended through Finance Act, 2013. For ready reference, provision of section 214C of the Ordinance is reproduced hereunder:- 214C. Selection for audit by the Board .---(1) The Board may select persons or classes of persons for audit of Income T ax affairs through computer ballot which may be random or parametric as the Board may deem fit.
(1A) Notwithstanding anything contained in this Ordinance or any other law, for the time being in force, the Board shall keep the parameters confidential.
(2) Audit of Income Tax affairs of persons selected under sub-section (1) shall be conducted as per procedure given in section 177 and all the provision s of the Ordinance, except the first proviso to sub-section (1) of Section 177, shall apply accordingly .
(3) For the removal of doubt, it is hereby declared that Board shall be deemed always to have had the power to select any persons or classes of persons for audit of Income T ax Affairs.
[Explanation.---For the removal of doubt, it is declared that the powers of the Commissioner under section 177 are independent of the powers of the Board under this section and nothing contained in this section restricts the powers of the Commissioner to call for the record or documents including books of accounts of a taxpayer for audit and to conduct audit under section 177].
Under the above section 214C of the Ordinance, the Board may select persons or classes of persons for audit of income tax through computer balloting which may be random or parametric as the Board may deem fit.
13. The selection of cases in the past was mostly through random ballot, however , the Audit Policy , 2016 (Policy , 2016) proposed paradigm shift from past and focus has been realigned from random to parametric selection and from general to risk based approach. As per Policy 2016, this approach was to minimize the chances of selection of compliant tax payer and to focus on high risk areas. Simultaneously in year 2016, through SRO 131(I)/2016 dated 18.2.2016, the Federal Board of Revenue inserted rule "231F" in the Income Tax Rules, 2002 (Rules) for selection of audit under section 214C of the Ordinance. The relevant clauses of said rules relating to risk parameters is reproduced hereunder:- 231F.-Selection and conduct of audit.-(1) This rule shall apply to section of cases for audit by the FBR under section 214C of the Income Tax Ordinance, 2001 (XLIX of 2001).
(2) The following steps shall be followed for selection of cases for audit through a computer ballot on random and parametric selection basis for tax years mentioned therein, namely:-
(i) for the purpose of selection of cases on parametric basis, risk parameters for persons or classes or persons to be used for balloting, wherever necessary , shall be determined by the Board, as under:-
(A) risk parameters for persons or classes of persons to be used for balloting shall be determined by the Board;
(B) audit selection parameters may be based upon the following:-
(I) financial ratios for the year viz a viz the history of the case;
(II) financial ratios viz a viz industrial, sectoral or national ratios;
(III) Industrial comparisons or bench marks;
(IV) quantum of losses or refunds beyond certain thresholds: or
(V) compliance history; and
(j) computer balloting process in both categories of selection for audit shall be held in the presence of representatives from Chambers of Commerce and Industries and representatives of T ax Bar Associations.
The rule 231F ibid provides that for the purpose of selection of cases for audit on parametric basis, the risk parameters for persons or classes of persons to be used by balloting, shall be determined by Board and they may be based upon financial ratio for the year viz-a-viz history of the case, industrial sectorial or national ratios, industrial comparison or bench marks or quantum of losses or refund beyond certain thresholds or compliance history of the persons or classes of persons.
14. Though the audit policy proposed the shift from random to parameter selection and FBR has also given guidelines to determine parameters under rules, however , despite demand, the said parameters determine by the Board are not disclosed to persons or classes of persons who were hit by those parameters and selected for audit due to confidentiality clause under impugned subsection (1A) of section 214C of the Ordinance. The main argument of the petitioners is that impugned provision of 214C(1A) of the Ordinance is ultra vires of their fundamental right to information under Article 19 and 19-A and fair trial under Article 10-A of the Constitution. On the other hand, respondent department and Federal Government stance is that impugned section 214C(1A) of the Ordinance is a reasonable restriction and same does not impinge upon any of the fundamental rights of the petitioners.
15. In view of above respective stance of the parties, the moot legal question require determination in these constitutional petitions is that whether impugned provision of 214C(1A) of the Ordinance impinge upon any of the fundamental right of the petitioners under Article 19, 19-A and 10-A of the Constitution. For ready reference, Articles 19, 19-A and 10-A of the Constitution are reproduced hereunder:- Art. 19. Freedom of speech, etc.-Every citizen shall have the right to freedom of speech and expression, and there shall be freedom of the press, subject to any reasonable restrictions imposed by law in the interest of the glory of Islam or the integrity , security or defence of Pakistan or any part thereo f, friendly relations with foreign States, public order , decency or morality , or in relation to contempt of court, commission of or incitement to an offence.
Art. 19A. Right to information .--Every citizen shall have the right to have access to information in all matters of public importance subject to regulation and reasonable restrictions imposed by law .
10A. Right to fair trial.--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.
16. The right of information under Articles 19 and 19-A of the Constitution is well entrenched fundamental right of every citizen. The people of Pakistan have right to know every public act and every thing that is done in the public way by public functionaries. Before 18 amendment in the Constitution in year 2010, Article 19 of the Constitution guaranteed every citizen "freedom of speech and expression". The august Supreme Court in (PLD 1993 Supreme Court 473) titled Mian Muhammad Nawaz Sharif vs. President of Pakistan etc held that "freedom of speech and expression" includes right to receive information. However, in year 2010, Article 19-A of the Constitution was inserted through 18 Amendment in the Constitution and right to have access to information in all matters of public importance was made independent fundamental right of very citizen.
17. The learned Full Bench of this Court in judgment reported Province of Punjab vs. Qaisar Iqbal etc (PLD 2018 Lahore 198), discussed the relevant case law and scope of right of information and access to information under Article 19 and 19-A of the Constitution as under:- Right to information and access to information in all matters of public importance is indisputably a fundamental right guaranteed under Article 19 and 19-A of the Constitution. The right of information stems from the requirement that members of a democratic society should be sufficiently informed that they may influence intelligently the decision which may affect themselves. The people of Pakistan have a right to know every public act, everything that is done in public way, by their public functionaries and chosen representatives. People are entitled to know the particulars of every public transaction, acquire information in all matters of public importance and to disseminate it. It enables people to contribute on debate on social and moral issues and matter of public importance. Without information, a democratic electorate cannot make responsible judgments about its representatives. Freedom of information is the only vehicle of political discourse so essential to democracy and it is equally important in facilitating artistic and scholarly endeavours of all sorts. In sum, the fundamental principle involved here is the people's right to know and freedom of information and freedom of speech and expression should therefore, receive a generous support from all those who believe in democracy and the participation of people in the administration and matters of public importance.
In year 2010, Article 19-A was inserted in Part II Chapter one of the Constitution through Constitutional (Eighteenth Amendment) Act 2010 (Eighteenth Amendment) and right to have access to information in all matters of public importance was made independent fundamental right. Article 19-A of the Constitution empowers every citizen of Pakistan to seek information from public institutions in all matters of public importance and also hold them accountable and answerable. The august Supreme Court in Watan Party case supra, while discussing Article 19-A of the Constitution held that Article 19- A of the Constitution has empowered the citizens of Pakistan by making access to information a justiciable right of the people rather than being largesse bestowed by the state at its whim. Further held that in those petitions, petitioners only sought toth th enforce the peoples? right to know the truth about what their government and its functionaries were up to, and that was by no means, a political question and was fully justiciable fundamental right enumerated in the Constitution. The honourable Supreme Court also held that fundamental right under Article 19-A is much broader and more assertive than the statutory right under the "Freedom of Information Ordinance, 2002", which by its own terms was restricted to disclosure of official record only.
In Hamid Mir and others vs. Federation of Pakistan and others (PLD 2013 SC 244), the honourable Supreme Court held that in view of provisions of Article 19-A of the Constitution, Ministry of Information and Broadcasting was obliged to disclose the nature and use of all funds allocated to it including the secret funds. Division Bench of Sindh High Court in Saifan uz Zaman Khan vs. Federation of Pakistan through Secretary , Ministry of Finance, Government of Pakistan, Islamabad and seven others (PLD 2017 Sindh 559) held that right to information under Article 19-A of the Constitution was of immense value in promoting transparency by ensuring that citizens had knowledge of matters concerning public administration. In Shabbir Hussain vs. Executive District Officer (Education) Larkana and 5 others (2012 CLC 16) and Muhammad Ismail and others vs. Province of Sindh through Secretary , Education and Literacy Department, Karachi and others (2012 PLC (CS) 620), it is reiterated that under Article 19-A, access to information in matters of public importance would be right of every citizen.
18. In Indian Constitution, there is no specific and separate provision like Article 19-A of the Constitution for right to information. However , Indian Courts have liberally interpreted right of freedom of expression, under Article 19 of Indian Constitution to include right of information. Some of the case law on right of information from Indian Jurisdiction (also discussed in Qaisar Iqbal case supra) are as under:- (i). In case Indian Express Newspaper (Bombay) Private Ltd. & others etc vs. Union of India etc (1985 (1) SCC 641), Court held that:- ?
"Freedom of expression has four broad social purpose to serve: (i) it helps an individual to attain self fulfilment, (ii) it assists in the discovery of truth, (iii) participating in decision making, and (iv) it provides a mechanism by which it would be possible to establish a reasonable balance between stability and social change. All members of society should be able to form their own beliefs and communicate them freely to others. In sum, the fundamental principle is the people's right to know ."
(ii). In case the Secretary , Ministry of Information & Broad casting vs. Cricket Association of Benga l etc (AIR 1995 SC 1236) , it is held:- ?
"For ensuring the free speech right of the citizens of this country , it is necessary that the citizens have the benefit of plurality of views and a range of opinions on all public issues. A successful democracy posits an aware' citizenry .
Diversity of opinion, views, ideas and ideologies is essential to enable the citizens to arrive at informed judgment on all issues touching them."
(iii). In case State of U.P vs. Raj Narain and others (AIR 1975 SC 865), it is held:-?
"In a Government of responsibility like ours, where all the agents of the public must be responsible for their conduct, there can be but few secrets. The people of this country have a right to know every public act, everything that is done in a public way, by their public functionaries. They are entitled to know the particulars of every public transaction in all its bearing."
(iv). In case S.P. Gupta and others vs. Union of India and others (AIR 1982 Supreme Court 149), Court held that:- ?
"Where a society has chosen to accept democracy as its creedal faith, it is elementary that the citizens ought to know what their government is doing. The citizens have a right to decide by whom and by what rules they shall be governed and they are entitled to call on those who govern on their behalf to account for their conduct. No democratic government can survive without accountability and the basic postulate of accountability is that the people should have information about the functioning of the government. It is only if people know how government is functioning that they can fulfill the role which democracy assigns to them and make democracy a really effective participatory democracy."
(v). In case of Sheela Barse vs. Union of India (AIR 1986 Supreme Court 1773) , the Court held:- ?= "We are of the view that the petitioner should have access to information and should be permitted to visit jails, children's home, remand homes, observation homes, borstal schools and all institu tions connected with housing of delinquent or destitute children. We would like to point out that this is not an adversary litigation and the petitioner need not be looked upon as an adversary . She has in fact volunteered to do what the State should have done."
(vi). In case of Suri Dinesh T rivedi vs. Union of India etc (1997 (4) SC 306), the Court held as under:- ?
"In modern constitutional democracies, it is axiomatic that citizens have a right to know about the affairs of the Government which, having been elected by them, seeks to formulate, sound policies of governance aimed at their welfare. "
(vii). In case Peoples Union for Civil Liberties vs. Union of India (AIR 2003 Supreme Court 2363), it is held:- ?
"The aforesaid passage leaves no doubt that right to participate by casting vote at the time of election would be meaningless unless the voters are well informed about all sides of the issues, in respect of which they are called upon to express their views by casting their votes. Disinformation, misinformation, non-information all equally create an uniformed citizenry which would finally make democracy a mobocra cy and farce."
19. No doubt, right of information under Article 19 and 19-A of the Constitution is fundamental right of every citizen but this right is not absolute. This right is subject to regulation and reasonable restrictions imposed by law, as specifically mentioned in Article 19 and 19-A of the Constitution.
20. There is no dispute that impugned provision does not prescribe any regulation, hence the next question is whether impugned section 214C(1A) of the Ordinance is a "reasonable restriction imposed by law" on the right of information under Article 19 and 19-A of the Constitution. The Hon'ble Supreme Court in Pakistan Broadcasters Association vs. Pakistan Media Regulatory Authority (PLD 2016 Supreme Court 692) defined the expression "reasonable restriction" as under:-?
"It is certainly not easy to define "reasonableness" with precision. It is neither possible nor advisable to prescribe any abstract standard of universal application of reasonableness. However, factors such as the nature of the right infringed, duration and extent of the restriction, the causes and circumstances promoting the restriction, and the manner as well as the purpose for which the restrictions are imposed are to be considered. The extent of the malice sought to be prevented and/or remedied and the disproportion of the restriction may also be examined in the context of reasonableness or otherwise of the imposition. It needs to be kept in mind that "reasonable" implies intelligent care and deliberation, that is, the choice of course that reason dictates. For an action to be qualified as reasonable, it must also be just, right and fair and should neither be arbitrary nor fanciful or oppressive."
The Indian Supreme Court in Abdul Hakim Quraishi and others vs. State of Bihar (AIR 1961 SC 448) defined phrase "reasonable restriction " as under: "The phrase 'reasonable restriction' connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The word 'reasonable' implies intelligent care and deliberation, that is, the choice of a course which reason dictates.
Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in Article 19(1)(g) and the social control permitted by clause (6) of Article 19, it must be held to be wanting in that quality ."
21. The test of reasonableness as laid down in above case law is that Court should not only consider the factors such as duration and extent of the restriction but also the circumstances and manners in which, those restrictions are imposed. Further, there are no abstract standards or general pattern of reasonableness but Court has to keep in mind that restriction should be proportionate to the urgency of the evil sought to be remediate by said restriction. Generally speaking the validity of primary legislation such as Act of the Parliament is not open to challenge on the ground of reasonablene ss and such ground is normally available to challenge the subordinate legislation such as rules, regulation or act of executive but this general rule does not apply where under the Constitution, fundamental right conferred is subject to reasonable restriction imposed by law. No doubt, impugned provision is a non-obstante and overridi ng clause and indeed under Article 19 and 19-A of the Constitution, a reasonable restriction can be imposed on right to information, however , even non-obstante clause is subject to Constitution and this Court while applying the test of reasonableness is required to find out whether by impugned provision, the legislature has transgressed or not the reasonable limits envisage d by Article 19 and 19-A of the Constitution.
22. Though impugned subsection (1A) of section 214C of the Ordinance does not provide that why parameters are kept confidential. However , the respondent FBR in their replies (filed in connected W.P.No.1 12614/2017, 112073/2017) and through their learned counsel explained that parameters are kept confidential to avoid possibility of massive tax evasion and frustration of Audit Policy as observed by august Supreme Court in para 23 of the Media Network case supra. This argument of the respondent department and FBR is carefully examined by this Court on the touch stone of reasonableness. In this context, it is relevant to note that case of Media Network case supra relates to self assessment under section 59 of the erstwhile Income Tax Ordinance, 1979 (Repealed Ordinance) and the Hon'ble Supreme Court in para 23 of the said judgment observed that the very object of provision of section 59(1A) under the Repealed Ordinance would have been frustrated if taxpayer were informed before hand of the category of cases or person which would be selected for audit and possibility of tax evasion under the scheme could not be ruled out. However, in para 34 of the said judgment, Hon'ble Supreme Court specifically directed that before final selection of cases, Commissioner are required to confront the assessees with the material and communicate them the basis of their proposed selection for audit.
23. Though the above judgment of Hon'ble Supreme Court relates to selection of audit by Commissioner Income Tax under section 59 of the Repealed Ordinance and to the period before promulgation of Article 19-A of the Constitution in year 2010 through 18 amendment, however, even in said judgment, it was specifically directed that basis for proposed selection for audit shall be communicated before final selection of the case. Further the present controversy relates to parametric selection of audit by Board after returns are filed by assessees under the Ordinance, hence there is no question of any tax evasion or frustration of Audit Policy, merely because parameters are disclosed. Therefore, the reliance of the respondent department on para 23 of Media Network case to justify the impugned restriction is misplaced.
24. The matter regarding selection of audit on parametric basis under the Ordinance was considered by this Court as well as Hon'ble Supreme Court and in number of cases and disclosure of param eters was never considered as a threat resulting in evasion of tax or frustration of Audit Policy . Rather the learned Courts have repeatedly held that risk parameters should be fair and publically advertised for the sake of taxpayer convenience. In this context, some of the cases and observations made therein relating to disclosure of parameters for selection of Audit are reproduced hereunder:-
(i) In case Messrs Ittefaq Rice Mills vs. Federation of Pakistan and others (2013 PTD 1274 ), it is held as under:- "Needless to say that FBR has to show that the risk parameters have been duly framed by FBR and have been publically advertised for the sake of taxpayers convenience along with the risk strategy adopted by the FBR (reference - commitment made by FBR in Premier Industrial Chemical Manufacturing Co. case)".
(ii) In case Messrs Premier Industrial Chemical Manufacturing Co. vs. Commissioner Inland Revenue and 3 other (2013 PTD 398), it is held as under:- After arguing the case at some length, the parties have arrived at the following consensus:--
(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;
(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; (Emphasis supplied)
(iii) In case Defence Housing Authority vs. Commissioner Inland Revenue etc,(2015 PTD 2538 ), this Court held that selection of audit cannot be termed as detrimental to the right of the assessee, nevertheless, power of FBR to select for audit is not unbridled and the discretion has to be structured justly , fairly and in transparent manner .th
(iv) Treet Corporation Limited vs. Federation of Pakistan etc (Writ Petition No.11253/2017). Though this case was regarding sales tax audit, however, for disclosure of risk parameters, it is held as under:- "Be that as it may, it seems that FBR has not, while selecting the case of the petitioner for audit, heeded to the concerns expressed by the superior courts in the judgments referred to above and a number of other precedents over time. The focus and emphasis of the superior courts has been on lending transparency and fairness to the entire process and in case the selection is parametric in nature, to lay down a clear audit policy by which it can be gleaned that FBR has duly framed the risk parameters and has publicized them openly. In the instant case, although an audit policy has duly been framed and from the preamble of the policy, reproduced above, it seems that much emphasis has been laid on a paradigm shift in the mindset of FBR which focuses on realignment from random to parametric selection and from general to risk based approach, FBR has woefully been lacking in laying down a clear policy which would show the risk parameters on the basis of which selection for audit is being conducted. It was only upon the prompting of the petitioner that the petitioner was informed of the reasons for selection of the petitioner's case for audit and which too has been reproduced above. However, this is not a proper compliance of the judgments of the superior courts brought forth above. The requirement of those judgments will not be satisfied if a person was informed at a later stage of the reasons which weighed with FBR in selecting a particular person for audit. The essential requirement is for the risk parameters to be laid down and clearly defined along with the audit policy by FBR and those risk parameters should form the basis for parametric selection and none else. Since admittedly no risk parameters have been provided by FBR, this would give unbridled and unstructured powers in the hands of the officers of FBR to select any registered person for audit.
This seems to have been the case in the instant matter as well. The raison d'etre of parametric selection has been brought forth in the preamble of the Audit Policy , 2016 itself and the underlying purpose seems to be to minimize chances of selection of compliant taxpayers resulting in increased confidence for the system. The purpose in the estimation of FBR is to assist FBR in broadening the tax base and to focus on high risk areas".
(v) Commissioner of Income Tax etc vs. Fatima Sharif Textile etc,(2009 PTD 37). Though this matter was regarding selection of audit under section 177 of the Ordinance by the Commissioner Inland Revenue, however , regarding disclosing the criteria/reasons for selection of Audit, Hon'ble Supreme Court held as under:- "In view of the above arrangement between the parties, the appeals are disposed of with consent, consequently , the portions of impugned judgment reproduced hereinabove are deleted with the observation that let appellants issue fresh notices to the respondents in terms of section 177 of the Ordinance, as it was prevailing at the relevant time, disclosing criteria/reasons for selecting their cases for purpose of audit ".
(vi) Chairman FBR etc vs. Idrees Traders etc,(2012 PTD 693).In this case, regarding question whether assessees cases are covered under Audit Policy , the august Supreme Court held as under:-
(ii) The department is directed to follow the policy in letter and spirit, which has been reproduced hereinabove and if the letters have not been withdrawn, reasons should be assigned and after providing opportunity to the respondents, it be clearly pointed out to them that their cases are not covered under the policy and they may apply afresh if need be. (Emphasis supplied)
25. The above case law shows that before promulgation of impugned provision of subsection (1A) to section 214C of the Ordinance through Finance Act, 2013, the disclosure of parameters for Audit by Board was considered by Courts as a rule and not against public interest or threat resulting in tax evasion. Further respondent department or Federation never raised such argument in any of the above cases. The test of "reasonableness" as laid down by Hon'ble Supreme Court in Pakistan Broadcasters Association case supra, the extent of the restriction and the malice said restriction sought to prevent should be proportionate. In present case, it is not legally justified that what evil will be remedied by keeping the parameters confidential, especially when it is repeatedly directed by Courts that parameters be transparent and publically disclosed.
26. It is also relevant to note that Audit Policy, 2016 itself provide that paradymic shift from random to parametric selection audit and from general to risk base approach, will minimize chance of selection of Audit of compliant taxpayer . This means that taxpayer who are selected are in some manner not compliant taxpayers, hence they have right to know that under which particular parameter , their case fall for selection of audit. For restriction to be reasonable, it must also be just, fair and should neither be arbitrary nor fanciful or oppressive.
27. Further , there is no such confidentiality attached to disclosure of parameters for selection of audit by Board under Sales Tax Act, 1990 (Sales Tax Act) and Federal Excise Act, 2005 (Excise Act), rather for audit under said laws, the risk parameters are available on the websites for information of the general public. It is hard to understand that if at all disclosure of risk parameters is threat for tax evasion or can frustrate the Audit Policy (as argued by the respondents), then why same restriction on disclosure of parameter is not applied on other tax laws.
There is no uniform policy in taxing statute for non disclosure of parameters, which also render the impugned restriction under section 214C(1A) of the Ordinance unreasonable.
28. The learned Assistant Attorney General attempted to argue that disclosure of parameters fall under the exceptions provided under section 16 (1)(d)(i) of the Right of Access to Information Act, 2017 (Act of 2017) and Article 6 and 7 of the Qanoon-e-Shahdat Order , 1984 (Order 1984). I am afraid that this argument is also mis- conceived. Before Act of 2017, the Freedom of Information Ordinance, 2002 (Ordinance 2002) was in field. If at all, the disclosure of parameters was already covered under any of the exceptions provided under the Ordinance 2002 (now Act of 2017) or Order 1984, then there was no need to promulgate section 214C(1A) of the Ordinance at the first place. Further the said exceptions would also be equally applicable to other taxing statutes including sales tax and federal excise duty, but admittedly these exceptions are not applied to disclosure of risk parameters for selection of audit by Board under above taxing provisions. It is also relevant to note that it was never the case of the respondent department or of the Federal Government before Courts in any of the Audit cases discussed above, that parameters cannot be disclosed in view of provision of Ordinance 2002 or Order 1984. Even in this case, petitioners are not denied information on the ground that parameters fall in any of the exceptions of Act of 2017, Ordinance 2002 or Order 1984 but denied parameters only due to impugned provision of subsection (1A) of Section 214C of the Ordinance. Even otherwise, the exceptions under section 16(1)(d)(i) of the Act of 2017 relates to premature disclosure of any tax and duties or policy , which may frustrate the policy, hence same is not attracted to the present case for disclosure of parameters to the selectees for selection of audit.
29. Learned counsel for the respondents vehemently argued that Hon'ble Supreme Court in Allah Din Steel case supra held that mere selection of audit does not cause actionable injury to the taxpayer. No doubt, mere selection for audit cannot be detrimental to right of assessee, hence it cannot be said that right of fair trial or due process under Article 10-A of the Constitution has been infringed. Nevertheless, this does not mean that petitioners cannot be disclosed the risk parameters for selection of their audit which is their fundamental right under Article 19 and 19-A of the Constitution. Further, the judgment of Sindh High Court in Azee Securities (Pvt.)
Ltd supra relied upon by respondent is merely on stay application and does not discuss vires of section 214C(1A) of the Ordinance.
30. The impugned provision is also unreasonable for giving arbitrary and unstructured power to the Board. The income tax audit is conducted by Commissioner under section 177 or by Board under section 214C of the Ordinance. The Commissioner under section 177 is bound to give reasons for impugned selection for audit whereas the Board under section 214C has absolute discretion for selection of Audit and is not even bound to disclose parameters. It is settled law that discretion must be structured and exercised justly, fairly and in transparent manner.
31. The learned counsel for the respondent department (Mr. Liaquat Ali Ch., Advocate) argued that parameters for audit selection under section 214C is not a "matter of public importance ", therefore, Article 19-A of the Constitution is not applicable. This argument is not only baseless but also contradictory to stance of the respondents. If this argument is accepted, then for right of information, only Article 19 of the Constitution will be applicable and the only reasonable restriction could be in the interest of glory of Islam, integrity , security or defence of Pakistan or any part of friendly relation with foreign State, public order , decency or morality or in relation to contempt of Court as specifically provided in Article 19 of the Constitution. It is neither the case of the respondents that restriction on right of information under impugned section 214C(1A) of the Ordinance is based on above considerations nor impugned provision itself appears to be covered under any of the above grounds for keeping the parameters confidential.
32. The learned Assistant Attorney General (who was not only representing the Federation but also appeared in pursuant to notice under Order XXVII-A CPC) on the other hand argued that audit selection parameters for persons or class of persons is a matter of public importance and therefore, Article 19-A of the Constitution is applicable and right of information is subject to regulation and any reasonable restriction imposed by law. I intend to agree with this argument of learned Assistant Attorney General. The term "matter of public importance" is a matter which effects and has its repercussions on the public at large. The risk parameters for audit of persons or classes of persons under section 214C by Board are applicable to taxpayers throughout the country , therefore, it cannot be said that matter is not of public importance and Article 19-A of the Constitution is not attracted. The learned Full Bench of this Court in case of Qaisar Iqbal supra discussed the scope of word public importance under Article 19-A of the Constitution as under:- "Under clause 19-A of the Constitution, every citizen shall have the right to have access to information in matter of "public importance". The word "public importance" used in Article 19-A of the Constitution is not defined term.
However, term public importance according to dictionary meaning could be defined that "question which affects and has its repercussions on the public at large and it also includes the purpose and aim in which the general interest of the community particularly interest of individual is directly or widely concerned". The same interpretation was expressed by august Supreme Court in Ch. Muhammad Akram vs. Registrar, Islamabad High Court and others (PLD 2016 Supreme Court 961) and in State of J. & K. and others vs. Bakshi Gulam Muhammad and others (AIR 1967 SC 122). The reasons recorded by Government itself in its letter dated 17.06.2017 for holding inquiry, when juxtapose with the definition of "public importance" narrated above, it can safely be concluded that the inquiry report of a Tribunal is a matter of public importance and every citizen has right under Article 19-A to have excess to this inquiry report, indeed subject to reasonable restrictions imposed by law. Even otherwise under section 3 of the Ordinance 1969, inquiry could only take place in definite matter of public importance. "
33. The expression "public importance" was used in Article 19-A of the Constitution after 18 amendment in Constitution, however , this expression was already available in Article 184(3) of the Constitution from the very provision of the Constitution, 1973. This expression was repeatedly interpreted by Hon'ble Supreme Court from time to time. Some of the case law and findings recorded by Hon'ble Supreme Court regarding expression "public importance" is reproduced hereunder:- In case Ch. Manzoor Elahi vs. Federation of Pakistan etc (PLD 1975 Supreme Court 66), it is held as under:- "Seen in this light, there can be little doubt as to the public importance of the questions arising in this case. I think I will not be far wrong in saying that it is not often that a single case raises so many questions of public importance touching the liberty of the citizen. In all systems of law which cherish individual freedom and liberty , and which provide constitutional safeguards and guarantees in this behalf, any invasion of such freedom in circumstances which raise serious questions regarding the effectiveness and availability of those safeguards, must be regarded as a matter of great public importance".
In case Miss Benazir Bhutto vs. Federation of Pakistan etc (PLD 1988 Supreme Court 416), it is held as under:- "Lastly is the consideration of the connotation of the expression "public importance" which is tagged to the enforcement of the Fundamental Rights as a pre-condition of the exercise of the power . This should not be understood in a limited sense, but in the gamut of the constitutional rights of freedoms and liberties, their protection and invasion of such freedoms in a manner which raises a serious question regarding their enforcement. Such matters can be viewed as of public importance, whether they arise from an individual's case touching his human rights of liberty and freedom, or of a class or a group of persons as they would also be legitimately covered by this expression" .
34. The same view was also expressed by Hon'ble Supreme Court in I.A. Sharwani and others vs. Government of Pakistan etc (1991 SCMR 1041 ), Syed Zulfiqar Mehdi and others vs. Pakistan International Airlines Corporation through M.D, Karachi and others (1998 SCMR 793), Mian Muhammad Shahbaz Sharif vs. Federation of Pakistan etc (PLD 2004 Supreme Court 583), Ch. Muhammad Siddique and 2 others vs. Government of Pakistan etc (PLD 2005 Supreme Court 1), Watan Party and others vs. Federation of Pakistan and others (PLD 2012th Supreme Court 292), Dr. Muhammad Tahir-ul Qadri vs. Federation of Pakistan etc (PLD 2013 Supreme Court 413). The law settled by Hon'ble Supreme Court in afore-noted judgments is that whether the particular matter involved the element of public importance is a question which is to be determined by the Court with reference to facts and circumstances of each case. However , to assure the character of public importance, matter must be such that it effects people at large and not an individual from a particular class of group. The above test of "matter of public importance" is squarely applicable to risk parameters for selection of Audit of persons and classes of persons applicable throughout the country .
35. Though petitioners have challenged the vires of section 214C(1A) of the Ordinance, however , learned counsel for the petitioners during course of arguments submits that they have no cavil if parameters are kept confidential by the Board, however , when any of the assessee is selected for audit by the Board on the basis of risk parameters, then at least said assessee should have right to know that which particular parameter was applied to him for selection of Audit. This line of argument of the petitioners is carefully deliberated. The only ground urged by respondents to justify the reasonableness of impugned provision, is the observation made by Hon'ble Supreme Court in para 23 of the Media Network case supra . Though, said judgment is not applicable to parametric audit selection under the Ordinance (as already discussed in para 22,23 and 24 above), however , this argument of the petitioners will in fact be inline with the law settled by Hon'ble Supreme Court in Media Network case supra, where in para 34, it was specifically directed by Hon'ble Supreme Court that assessee will be communicated the basis of their proposed selection.
36. The next question require determination is that whether impugned provision of subsection (1A) of Section 214C of the Ordinance can possibly be interpreted that parameters shall be kept confidential by the Board, however , particular parameter may be informed to a selectee, if required by him, which was the basis for his selection of Audit on parametric basis. Plain reading of impugned provision of subsection (1A) of Section 214C of the Ordinance shows that Board is required to keep the parameters confidential, howe ver, there is no specific bar that an assessee selected for audit, will not be informed the particular risk parameter applied to him for selection of Audit. In the circumstances, there can be two possible interpretations of impugned subsection (1A) of Section 214C of the Ordinance. First interpretation can be that parameters will be kept confidential from every one and for all time and no information will be disclosed in any eventuality . The other possible interpretation is that the parameters shall be kept confidential by the Board before selection of Audit, however , once person is selected for Audit, he can be informed about the particular risk parameter applied to him for selection of Audit, if required by him.
37. If the first interpretation of complete curtain secrecy be applied, then the impugned provision will not be sustainable being unreasonable restriction on the right of information and ultra vires of Article 19 and 19-A of the Constitution as discussed in preceding paragraphs of this judgment. However , if later construction is adopted this will not only save the impugned provision but the same will also remain functional as complete confidentiality of parameters will be maintained by the Board before selection of Audit and even after selection, only specific parameter will be required to be disclosed to the selectee of Audit on demand. The later interpretation is also in consonance with the settled law that when two constructions are reasonably possible, then preference should be given to one which helps to carry out beneficial purpose of the Act and ensure smooth and harmonious working of the Constitution and eschew the other which will lead to absurdity and make the fundamental right nugatory .
38. The same principle is also embodied in the well settled rule of reading down or recasting the statute. In this regard, some of the case law are reproduced hereunder:-
(i) In case Province of Sindh through Chief Secretary etc vs. M.Q.M etc (PLD 2014 Supreme Court 531), it is held as under:- "An argument was raised that the Court should make every effort to save the statute and this can be done by invoking the principle of 'reading in' or 'reading down'. However in this context two principles have to be kept in view. First, that the object of 'reading down' is primarily to save the statute and in doing so the paramount question would be whether in the event of reading down, can the statute remain functional? Second, would the legislature have enacted the law , if that issue had been brought to its notice which is being agitated before the Court? "
(ii) In case Messrs Elahi Cotton Mills Ltd etc vs. FOP etc (PLD 1997 Supreme Court 582) , it is held as under:- "That the theory of reading down is a rule of interpretation which is restored to by the Courts when they find a provision read literally seems to offend a fundamental right or falls outside the competence of the particular Legislature".
(iii) In case Haroon-ur -Rashid vs. LDA etc ( 2016 SCMR 931 ), it is held as under:- "It is settled position in law that while interpreting the law or any provision of any statute all efforts are made by the Court to save the statute by applying various tools of interpretation one of the rule of harmonious construction being rule of reading down and rule of severance. Rule of reading down, a statutory provision means that a statutory provision is generally read and or toned or narrowed down, applying restrictive meaning in its application.
Rule of severance means to trim down or slice away invalid portion which is otherwise generally considered to be part of statute or provision, purpose is to save as much as to bring the statute or provision within the ambit of constitution and law as declared by the superior Courts and to protect it from being declared ultra vires or unconstitutional as a whole. If such trimming or slicing away is possible then the Court declare such part to be beyond the legislative competence and leave the reminder valid and operative.
(iv) The question regarding "reading down" also came under discussion in Syed Mukhtar Hussain Shah v. Mst.
Saba Imtiaz (PLD 201 1 SC 260 ) wherein it has inter alia been observed as under:-- "Because according to the literal approach of reading a statute, the statute has to be read literally by giving the words used therein, ordinary , natural and grammatical meaning. Besides, the addition and substraction of a word in a statute is not justified, except where for the interpretation thereof the principle of reading in and reading down may be pressed into service in certain cases".
39. In view of the aforesaid judgments, the foremost consideration for the Court should be to save the statute while following the rule of reading down or reading into. Though the Court is only to interpret the law and not to legislate, none the less the legislation cannot be asked to resolve difficulties in implementation of its intention and spirit of law and in such an eventuality , it is the duty of the Court to interpret the statute liberally to advance the cause of statute and save it from being strike down being unconstitutional.
40. For the reasons recorded in the preceding paragraphs, all these consti tutional petitions mentioned in Appendix-A are partially allowed in the following terms:- i) The impugned provision is construed and read down to the effect that under subsection (1A) of Section 214C of the Ordinance, the Board shall keep the parameters confidential. However , once persons or classes of persons are selected for audit under section 214C of the Ordinance, they shall be informed about the particular risk parameter applied to them for selection of audit, if demanded by them for their information. ii) The impugned orders for not disclosing the specific parameter applied to petitioners for selection of their cases for audit under section 214C of the Ordin ance, are declared to be illegal and witho ut lawful authority and therefore set aside. iii) Consequently, the respondent Board is directed to inform the petitioners forthwith if requested by them, the specific parameters on the basis of which, their cases were selected for audit under section 214C of the Ordinance. iv) It is clarified that the scope of this judgment is only confined to vires of subsection (1A) of Section 214C of the Ordinance and its consequential effects. Therefore, if petitioners have raised any other issue in these petitions which is not discussed and adjudicated in this judgment, they will be at liberty to raise that issue afresh in appropriate proceedings.
41. Before parting with this judgment, this Court must acknowledge with appreciation the valuable assistance rendered by learned counsel for the parties. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.