MUHAMMAD SAJID MEHMOOD SETH I, J.:- Through this constitutional petition, petitioner has assailed notice dated 28.03.2019, issued by respondent No.2 / Deputy Commissioner Inland Revenue, Lahore, under Section 48(1)(b) of the Sales Tax Act, 1990 ("the Act of 1990" ) read with Rules 71(2)(b) & 71(2)(d) of Chapter XI (Recovery) of the Sales Tax Rules, 2006 ("the Rules of 2006" ), whereby the bank authorities were ordered to attach petitioner 's bank accounts for recovery of outstanding liabilities, with the following prayer:- "Under the circumstances, it is most respectfully prayed that this Honorable Court may be pleased to: i. set aside the impugned notice dated 28th of March, 2019 and declare it to be illegal, unconstitutional, without lawful authority and void ab initio; ii. declare the impugned actions to be illegal, unconstitutional and violative of the fundamental rights of the petitioner as guaranteed under the Constitution of Pakistan, 1973; iii. direct the respondents to refund the amount of Rs.1,079,298,451/- recovered illegally from the bank account of the petitioner along with interest thereupon from the date of withdrawal till the date of actual refund; and iv. restrain respondents and in particular respondent No.1 from taking any coercive or adverse measures against the petitioners under the provision of Income Tax Ordinance, 2001 or any other applicable law, while withdrawing the recovery notices."
2. Brief facts, necessary for disposal of instant petition, are that petitioner-company is engaged in generating electricity and allegedly has paid all the due taxes to respondent-FBR and Punjab Revenue Authority . The respondents created a demand of Rs.98 6,088,81 1/- along with default surcharge and penalty vide assessment order dated 11.01.2018. Petitioner assailed said order by filing appeal before Commissioner Inland Revenue (Appeals), Lahore / respondent No.4, which was rejected vide order dated 27.03.2019. Subsequently , vide notice dated 28.03.2019, petitioner 's bank accounts had been directed to be attached. Hence, instant petition.
3. Learned counsel for petitioner submits that impugned notice regarding attachment of petitioner 's bank accounts has been issued on the next day of decision of his tax appeal by the first appellate authority . She adds that without providing the mandatory time provided under Rule 71 of the Rules of 2006 i.e. thirty days from the date on which the Government dues are adjudged, respondent-department has recovered the amount in an illegal and unlawful manner , thus, no opportunity of hearing was given to petitioner . She argues that impugned actions of respondent- department are not sustainable in the eye of law. In support of his submissions, he referred to Sun-Rise Bottling Company (Pvt.) Ltd. through Chief Executive v. Federation of Pakistan and 4 others (2006 PTD 535), Karachi Shipyard & Engineering Works Ltd., Kara chi v. Additional Collector , Customs, Excise and Sales Tax (Adjudication- III), Government of Pakistan, Karachi and 2 others (2006 PTD 2207 ) and Messrs Huawei Technologies Pakistan (Pvt.) Ltd. v . Commissioner Inland Revenue and others (2016 PTD 1799 ).
4. Conversely , learned Legal Advisor for respondent-department defends the impugned notice and contends that learned counsel for petitioner has failed to point out any illegality or legal infirmity therein, thus, same is liable to be upheld. He contends that thirty days' time as provided under Rule 71 of the Rules of 2006, has already been lapsed, as the aforesaid mandatory period has to be reckoned from the date when the dues in question were adjudged, which means the assessment order , not appellate order , hence, no violation of the Rule ibid has been committed. In support of his contentions, he relied upon Messrs Highnoon Laboratories v. Assistant Collector , Sales Tax and Central Excise and others (2003 PTD 2722 ), Messrs Paramount Spinning Mills Ltd. v. Customs, Sales Tax and Central Excise Appellate Tribunal and another (2012 SCMR 1860 ), Punjab Beverages Co. (Pvt.) Ltd. through Senior Finance Manager and others v. Additional Commissioner Inland Revenue and others (2015 PTD 2296 ) and order dated 07.08.2017, passed by learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore in STA No.228/LB/2017 titled M/s Appolo Solar Development Pakistan Ltd., Lahore v . CIR, R TO, Lahore .
5. Arguments heard. Available record perused.
6. Under the law, it is mandatory for any referring authority to first provide thirty days to such person against whom the dues are 'adjudged' to pay the tax amount due. Only after expiry of said period, the referring authority can deduct the amount from any money owing to the person from whom such amount is recoverable and which may be at the disposal or in the control of such officer. The department can only serve a notice under Rule 71(2) of the Rules of 2006 after the expiry of mand atory period prescribed under Rule 71 (1) ibid. Without observing the mandatory requirements provided in law, the recovery proceedings are not tenab le. For ease of reference, Rule 71(1) of the Rules of 2006 is reproduced hereunder:- "71. Initiation of recovery action.-- (1) On expiry of thirty days from the date on which the Government dues are adjudged, the referring authority shall deduct the amount from any money owing to the person from whom such amount is recoverable and which may be at the disposal or in the control of such officer."
7. The question arises as to whether time prescribed in Rule 71(1) ibid would also be granted after the decision of first appellate authority, especially when remedy of second appeal before an independent forum i.e. Appellate Tribunal is still available to petitioner. In the instant case, assessment order was passed on 11.01.2018, whereby respondents created a demand of Rs.986,088,811/- along with default surcharge and penalty. Petitioner's appeal was rejected by CIR (Appeals) on 27.03.2019 and on the very next day i.e. 28.03.2019, respondent No.2 issued notice with direction to attach petitioner's bank accounts and remit the amount in favour of respondent No.3 under banking instruments. The impugned notice is reproduced hereunder:- "SUBJECT:- NOTICE FOR ATTACHMENT OF BANK ACCOUNTS UNDER SECTION 48(1)(B) OF THE SALES TAX ACT, 1990 READ WITH RULES 71 (2)(B) AND 71(2)(D) OF CHAPTER XI (RECOVERY) OF THE SALES TAX RULES, 2006 FOR RECOVERY OF OUTSTANDING LIABILITIES.
WHEREAS, Government dues amounting to Rs.986,088,81 1/- alongwith default surcharge Rs.63,626,976/- under section 34(1) of the Sales Tax Act, 1990 (calculated upto 15/06/2017, to be re-calcu lated and recovered at the time of payment) and penalty Rs.29,582,664/- under section 33(19) of the Sales Tax Act, 1990 (i.e. total Rs.1,079,298,451 ) assessment order No.10/2018 issued vide C.No.479 dated 11.01.2018 (for the tax periods of 04/2016, 05/2016, 12/2016 and 04/2017) M/S Quaid-e Azam Thermal Power (Pvt.) Limited, Office No.7-C, First Floor , Gulberg-III, Lahore, having Sales Tax Registration No.32778761 15213 and NTN: 442131 1-5 which they have failed to pay so far .
2. NOW , THEREFORE, in exercise of the powers conferred upon me under section 48(1)(b) of the Sales Tax Act, 1990 read with Rule 71(2)(b) and 71(2)(d) of Chapter XI of the Sales Tax Rules, 2006, I do hereby , require above mentioned banking authorities to attach all the Bank Account of the defaulters i.e. M/s Quaid-e-Azam Thermal Power (Pvt.) Limited, Of fice No.7-C, First Floor , Gulberg-III, Lahore with immediate ef fect. "
8. The above notice shows that neither any order of first appellate authority i.e. Commissioner Inland Revenue (Appeals) has been referred nor its copy was directly sent to petitioner asking it to deposit the amoun t due, at least within a reasonable time. There is also no mention of any previous notice given to petitioner after passing of the assessment order . In the given circumstances, petitioner was entitled to be given thirty days to satisfy the demand and only thereafter , impugned coercive measure of deduction of amount from bank accounts of petitioner could be initiated.
9. The law requires that the determined recoverable amount should be made known to the taxpayer by service (communication) of assessment or appellate order, as the case may be and description of the said order, date of service and amount recoverable under it, should reflect in the notices for demand, including notice under the afore-referred provisions of law. It is further supported from Articles 10A and 19A of the Constitution, which guarantee that necessary information be disclosed and a fair opportunity be given to a person being subjected to coercive measures under the relevant provisions of law.
10. The assessee has not been given reasonable time to approach the higher forum i.e. Appellate Tribunal and if such process is allowed, the remedy of appeal before said independent forum, provided under the Statute, will become redundant. Such course is not only harsh but also unreasonable. Normally , the superior courts suspend the recovery proceedings / coercive measures unless the order creating such demand has undergone the scrutiny of at least one independent forum, which in this case is the Appellate Tribunal before which an appeal was to be filed by the petitioner . Reference is made to the cases of Sun-Rise Bottling Company and Messrs Huawei Technologies Pakistan supra.
11. Needless to say that an integral, intrinsic and incidental part of law under Article 4 of the Constitution of the Islamic Republic of Pakistan, 1973 ("the Constitution" ) is the right to procedural due process, right to be treated fairly at all times, right to procedural fairness and right to procedural propriety . Petitioner , being a citizen of the Islamic Republic of Pakistan, has the right to a fair procedure, which has been constitutionally guaranteed in our country . Article 4 of our Constitution is a heroic and vibrant blend of the cardinal principle of natural justice, procedural fairness and procedural propriety of the English Jurisprudence and Procedural Due process of the American Jurisprudence. The Constitution has boldly recognized this right to be an immutable right of every citizen or of any other person for the time being in Pakistan. Reference can be made to 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 ), Sarfraz Saleem v. Federation of Pakistan and others (PLD 2014 Supreme Court 232), Naubahar Ali v. Vice-Chancellor and others (2010 PLC (C.S.) 783), Muhammad Umar v. D.G. Excise and Taxation and others (2011 PLC (C.S.) 384 ) and Shabbir Ahmed v . Kiran Khursheed and 8 others (2012 CLC 1236 ).
12. In view of the above, instant petition is allowed . Consequently , impugned notice and subsequent recovery proceedings are declared to be illegal and without lawful authority . The matter is remitted to respondent No.2 to issue fresh notice calling upon the petitioner to pay the amount due within reasonable time and if it fails to either pay the amount or produce stay order from learned Appellate Tribunal, action for recovery as warranted by law may be taken against petitioner . 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.