This judgment shall decide the instant petition as well as Writ Petitions No. 2293/2016, 1946/2017, 1991/2018 and 394/2019 as common questions of law and facts are involved.
2. The petitioner , in W.P. No. 111/2019, has challenged show cause notice issued on 21.12.2018 for charging and payment of Super Tax under Section 4B of the Income Tax Ordinance, 2001.
3. The petitioner , in Writ Petition No. 2293/2016, has challenged the show cause notice as well as vires of section 4B of the Income Tax Ordinance, 2001.
4. The petitioners, in Writ Petitions No. 1946/2017, 1991/2018 and 394/2019, have challenged, vires of section 4B of the Income Tax Ordinance, 2001 as well as show cause notices issued by the tax department.
5. Learned counsel for the petitioner , in Writ Petition No. 111/2019, submitted that points agitated in the show cause notice have already been settled by the Appellate Tribunal Inland Revenue as well as this Court in Tax Reference No. 55/2009. It was contended that in the referred position of law, the questions settled are binding upon the respondent department.
6. Learned counsel for the petitioner , in W.P. No. 2293/2016 , inter alia, contended that section 4B of 2001 Ordinance was inserted through Finance Act, 2015 and amendment was made in the same through Finance Act, 2016. It was submitted that under section 4B (2)(ii) amendment was made in 2016, however , show-cause notice is asking for payment of charges from 2015. It was submitted that there cannot be any demand under the law when amendment is made effective respectively . It was submitted that levy of Super Tax as in the form of fee amounts to double taxation, hence not sustainable.
7. The petitioners, in Writ Petitions No. 1946/2017, 1991/2018 and 394/2019, also challenges vires of section 4B of the Income Tax Ordinance, 2001 and make similar contentions of the chargeability of Section 4B as is made by the learned counsel for petitioner in W rit Petition No. 2293/2016.
8. Learned counsel for the respondent department, inter alia, contended that question regarding vires of section 4B of the Income Tax Ordinance, 2001 has been settled by this Court in case titled "M/s. The Attock Oil Co. Ltd. versus Federation of Pakistan, etc." (W.P. No. 4260/2017), It was further contended that the above-mentioned petitions are not maintainable in light of the judgment of the august Apex Court inasmuch as show cause notice has only been impugned. Reliance is placed on cases reported as Pakistan State Oil company Ltd. versus Collector of Customs, E&ST (Adjudication-II) and others (2006 SCMR 425) Messrs Abdullah Corporation versus Deputy Collect Customs, and others (2007 PTD 1211). It was further submitted that petitioners have alternate and adequate remedy by pursuing through departmental hierarchy . Reliance was placed on case reported as Pakistan Tobacco Company Ltd versus Federation of Pakistan and others (2016 PTD 596). It was further submitted that question of double taxatio n and vires of the Super Tax levied through section 4B ibid has been settled not only by this Court but also by the Hon'ble Lahore High Court in case reported as D.G. Khan Cement Company Limited versus Federal Board of Revenue and others (2018 PTD 287 ).
9. Arguments advanced by the learned counsels for the parties have been heard and the documents placed on record examined with their able assistance.
10. The question regarding vires of Section 4B of the Income Tax Ordinance, 2001 is concerned, the matter stands settled by the decision of the Hon'ble Lahore High Court in case reported as D. G. Khan Cement Company Limited versus Federal Board of Revenue and others ( 2018 PTD 287 ) In the referred judgment, it was observed as follow: "The rule is that in case double taxation has expressly been provided by the statu te, the court will give effect to it However , a prohibition has been placed on the courts to avoid construing a provision in such a manner that it leads to double taxation. Thus the two concepts are distinct and separate and must be borne in mind at all times. If an impost has been levied as a tax by clear language of the statute, the courts cannot hold the said imposition as ultra vires on the touchstone of double taxation. However , if the intent is not very clear , the courts wilt not put a construction on the charging section which will amount to double taxation. This is distinction which needs to be brought home."
This Court as well in case.titled "M/s. The Attock Oil Co. Ltd. versus Federation of Pakistan, etc." (W.P. No. 4260/2017), observed as follows: "8. Section 4B was inserted vide Finance Act, 2015, and later amended through Finance Act, 2016. Through the said provision the legislature has imposed "super tax" for rehabilitation of temp orarily displaced persons. The liability is required to be discharged by persons who are specified in Division IIA Part I of the First Schedule of the Ordinance of 2001. Sub-section 2 of section 48 describes the income for the purposes of computing and recovery of the levy. Section 100 is in respect of those entities which are engaged in production of oil and natural gas, and exploration and extraction of other mineral deposits. For the purposes of computing tax, rules have been incorporated in Part I of the Fifth Schedule of the Ordinance, 2001.
9. A cumulative reading of the above provisions shows that the expression "tax" has a wide scope in the context of the Ordinance of 2001. The legislature in its wisdom and through insertion- of section 48 intended the levy of super tax for rehabilitation of displaced persons. The mere incorporation of said levy in the Ordinance of 2001 leaves no doubt that the legislature had intended to treat it as a tax and not a fee. The judgments rendered by the august Supreme Court in cases titled Federation of Pakistan through Secretary M/o Petroleum and Natural Resources and another vs. Durrani Ceramics and others [2014 SCMR 1630 ] and "Worker's Welfare Funds vs. East Pakistan Chrome Tannery (Pvt.) Ltd" [PLD 2017 SC 28] are in respect of statutes other than the Ordinance of 2001. The distinguishing feature is the definition of tax given in the Ordinance of 2001 which, inter alia, includes fee. Section 4B and the levy there-under is covered under the definition of "tax" provided unde r sub section 63 of section 2 of the Ordinance of 2001. The judgments are, therefore, distinguishable and moreove r, the mandatory ingredients for treating a levy as a fee are also not fulfilled in the instant case.
10. The argument raised by the learned Counsels that the levy under Section 4B of the Ordinance of 2001 ought to be treated as fee rather than tax is not relevant in the light of above discussion. The learned Counsels despite their able assistance could not raise any ground so as to strike down the levy imposed under section 4B of the Ordinance 2001. The argument that the Act of 1948 is a special law while the Ordinance of 2001 is of, general nature is without force. The latter statute explicitly deals with tax on income while that is not the case with the former . The Ordinance of 2001 is a special law in the context of tax on income and therefore, its provisions would have an overriding effect over the Act of 1948. Special provisions have been incorporated in the Ordinance of 2001. The mechanism for computing tax payable under the law by the companies engaged in the business of production and exploration of petroleum products has been provided in the form of rules which have been incorporated in the fifth Schedule.
11. This Court is satisfied that section 4B of the Ordinance of 2001 and its insertion was within the competence of the lower House of Majlis-e-Shoora i.e. National Assembly through a Money Bill. It is, therefore, declared that section 4B was validly inserted through the Finance Act, 2015 and that it does not suffer from any illegality nor is violative of any constitutional provision. The argument advanced by the learned Counsels relating to computing tax relating to income derived from other sources is concerned, that too has been dealt in the rules. This Court while exercising jurisdiction under Article 199 of the Constitution cannot undertake an exercise for computing the tax liability of the petitioner Companies. The latter may approach the concerned Commissioner for this purpose. If the latter receives representations from the petitioner Companies, then it is expected that they shall be decided after affording opportunity of hearing."
In so far as challenge to the show cause notice is concerned all the various grounds including the fact that points agitated in the same have been settled by the Superior Courts does not make a petition under Article 199 of the Constitution maintainable. It is trite law that a show cause notice is not an order but rather puts the machinery into action. The petitioners are at liberty to raise all legal and factual objections to the show cause notice issued by the Department. It is also settled principle that petition under Article 199 of the Const itution on merits of show cause notice is not maintainable, however , the only challenge can be made regarding the jurisdiction.
11. In the above petitions, the petitioners have also challenged merits of the show-cause notice, which they can duly contest before the issuing Authority . As noted above, the question regarding the vires of Section 4B ibid and the same being in nature of fee already stand settled in the abovementioned judgments.
12. In view of the above, the instant petitions are without merit and are accordingly dismissed .