JAWAD HASSAN, J. The nucleus of the controversy fallen for determination is the anthropology of Section 4B of the Income Tax Ordinance, 2001 (the "Ordinance ") viz a viz its character and nature for being a complete code onto itself with the semantic underpinnings as to exclusion of the machinery provisions of the Ordinance i.e. Section 122(5A) read with Section 122(9) of the Ordinance. The findings will also discuss the principles of interpretation employed for fiscal laws as well as the maintainability of writ petition against show cause notices on the touchstone of the ripeness doctrine. The Petitioner has invoked the constitutional jurisdiction of this Court under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 (the "Constitution") by challenging two show cause notices dated 22.12.2017 and 03.01.2018 respectively issued by the Respondent No.3/Additional Commissioner Inland Revenue on the ground that aforesaid-Respondent had no power to issue the same under section 122 (5A) read with 122(9) of the Ordinance as the power to issue such notices only laid with the Respondent No.2/Commissioner Inland Revenue under Section 4B of the Ordinance.
I. BRIEF BACKGROUND OF THE CASE
2. The Petitioner is the part of the Fatima Group of Companies which has made significant investments in large- scale manufacturing plants, utilizing technology and promoting manufacturing excellence, which extends to1 fertilizer , sugar , textile, commodities trading, mining and energy . It is a private limited company and is also a leading commercial exporter/importer of different commodities (i.e. export of molasses and import of sugar & fertilizers). It is a registered taxpayer and has received show cause notices dated 22.12.2017 under Section 122(5)(a) of the Ordinance and then on 03.01.2018 issue d by the Respondent No.3. Instead of filing replies to the aforesaid show cause notices, the Petitioner filed this constitutional petition with the stance that power to assess and determine liability of super tax vests only with the Respondent No.2. This Court issued notices to the Respondents on 22.01.2018 and also granted interim relief on the rule of consistency , as a similar relief was granted in W.P.No.126992 of 2017 and W.P.No.10477 of 2017. The Respondents filed report and para-wise comments on 09.04.2018 by raising preliminary objections to the maintainability of the petition.
II. PETITIONER'S ARGUMENTS
3. Advocate Chaudhary Muhammad Ali, counsel for the Petitioner inter-alia contended that impugned show cause notices were issued under section 122 (9) read with section 122 (5A) of the Ordinance to amend the deemed assessment of income of the Petitioner; that assessing the Super Tax on income by the Respondent No. 3 is without lawful authority , without jurisdiction, malafide and an illegal assumption of power under section 122 (5A) of the Ordinance as such the same is against the letter , intent and spirit of the Ordinance and the Constitution; that language of section 122(9) of the Ordinance clearly demonstrate that "No assessment shall be amended, or further amended, under this section unless the taxpayer has been provided with an opportunity of being heard"; that the Respondent No.3 has no power to issue show cause notices because in section 122(5A) of the Ordinance, the word used is 'Commissioner ' only.
4. Chaudhary Muhammad Ali, Advocate further argued that section 4B of the Ordinance is a complete section with all of its mechanism because language of sub-section of Section 4 refers to as Charging Sections, Definition Sections, Collection Sections, Recover y Sections and Legislative Sections and other miscellaneous Sections; that provision for the purposes of assessment has been specifically provided for under sub-section 4 of Section 4B and bare reading of the same reveals that legislature has provided for assessment for the purposes of Section 4B separately , for which the Respondent No. 2 has been exclusively empowered to assess and collect such levy; that powers have been given by the legislature to the Respondent No.4 under Section 237 of the Ordinance to frame rule for the purpose of Section 4B. However , no rules have been framed so far to give effect to the provision of Section 4B of the Ordinance. The counsel for the Petitioner has argued that Sectio n 4B's heading is super tax and recovery because the Ordinance has Chapters, Parts wherein division is made primarily through Chapters and there are certain Sections which are Definitions, Charging Penal, Recovery , Asses sment and others. Therefore, he further argued that since the law is the command of sovereign and enforces through Statutes which were without heading, chapters and parts. He mention ed that since 1547, the King of England started printing the Statutes in separate numbering and then in 1796, House of Commons appointed a comm ittee to consider most effective means of promulgating the Statutes and the committee recommended the responsibility for the drafting of marginal notes to be shifted from King' s Printer . However , despite such recommendations, in 1831 the English theoretical jurist Professor Jeremy Bentham advocated the numbering of sections to make statutes more practical and readable. The suggestions that the sections, created by the Parliament should carry descriptive heading appeared expressly in 1838 in a letter of Arthur Symonds of the Board of Trade to CP Thomson, President of Board of Trade.
Ch. Muhammad Ali, Advocate next contended that the view is now settled that the Headings or titles prefixed to sections can be referred to in construing an Act but conflicting opinions have been expressed on the questions as to what weight should be attached to the headings. However , this question was settled by the Supreme Court of India in "Raiburumatham Prabbaker V. Rawatmal" (2004) 4 SCC 766) wherein it was held that "It is not permissible to assign the heading or title of a section a limited role to play in the construction of statutes. They may be taken as very broad and general indicators of the nature of the subject matter dealt with thereunder . The heading or title may also be taken as condensed name assigned to indicate collectively the characteristics of the subject matter dealt with the enactment underneath; though the name would always be brief having its own limitations. In case of conflict between the plain language of the provision and the meaning of the heading or title, the heading or title would not control the meaning which is clearly and plainly discernible from the language of the provision thereunder ." In order to strengthen the contentions, the counsel for the Petitioner , Chaudhary Muhammad Ali has relied on "PAKIST AN BROADCASTERS ASSOCIA TION & 10 others Versus PEMRA" (PLD 2014 630), "VAGINA SILK MILL LYALLPUR Versus INCOME TAX OFFICER etc" (PLD 1963 SC 322), "COMMISSIONER OF INCOME TAX Versus ELI LILLY PAKIST AN LIMITED & others" (2009 SCMR 1279 ), "GATRON (INDUSTRIES) LIMITED Versus GOVERNMENT OF PAKIST AN and others" (1999 SCMR 1072 ), "KHALID MEHMOOD Versus COLLECT OR OF CUST OMS" (1999 SCMR 1881 ), "AL AHRAM BUILDERS (PRIV ATE)
LIMITED Versus Income Tax Tribunal " (1993 SCMR 29), "MARI PETROLEUM COMP ANY LIMITED Versus FEDERA TION OF PAKIST AN & 3 others" (2019 PTD 1774 ), "COLLECT OR OF SALES TAX Versus KHURSHID SPINNING MILLS LIMITED & another" (2017 PTD 196), "RAFIQ UR REHMAN Versus FEDERA TION OF PAKIST AN etc" (2017 PTD 1178), "MUHAMMAD ASLAM Versus FEDERA TION OF PAKIST AN & Others" (2017 PTD 803), "ZAVER PETROLEUM CORPORA TION Versus FEDERAL BOARD OF REVENUE & another" (2016 PTD 2332 ), "CHAUDHAR Y SUGAR MILLS LIMITED Versus CHIEF COMMISSIONER & 2 others" (2016 PTD 527), "OIL AND GAS DEVELOPMENT COMP ANY LIMITED Versus Federal Board of Revenue and 2 others" (2016 PTD 1675 ), "KK OIL AND GHEE MILLS (Private) Limited Versus FEDERAL BOARD OF REVENUE and others" (2016 PTD 2601 ), "Messers J.K. BROTHERS PAKIST AN (PRIV ATE) LIMITED Versus The Additional Commissioner Inland Revenue and another" (2016 PTD 461), "DAEWOO PAKIST AN EXPRESS BUS SERVICE LIMITED Versus Federation of Pakistan etc"
(2016 PTD 152), "KASHMIR SUGAR MILLS LIMITED Versus FEDERA TION OF PAKIST AN etc" (2016 PTD 1649 ), "MUSLIM COMMERCIAL BANK LIMITED Versus DEPUTY COMMISSIONER OF INCOME-T AX & others" (2004 PTD 1901 ), "MURREE BREWER Y CO LTD Versus PAKIST AN Through the Secretary to Government of Pakistan Works Division and 2 others" (PTD 1972 SC 279), "MESSERS USMANIA GLASS SHEET FACTORY LIMITED, Chittagong Versus Sales Tax Officer, Chittagong" (1971 PTD 1), "JAMAL SALAM Versus DEPUTY COLLECT OR CUST OMS" (2012 PTD 1471 ), "Ocean Pakistan Limited Versus FEDERAL BOARD OF REVENUE & Others" (2012 PTD 1374 ) and" IRAM SHAHDAI Versus PRINCIP AL SCHOOL OF NURSING MAYO HOSPIT AL & others" (2017 PLC (C.S.) 943). He also relied on W.P. No. 10477 of 2017 titled "Maple Leaf Cement Factory Limited V ersus Additional Commissioner Inland Revenue etc".
I. RESPONDENT'S ARGUMENTS
5. Learned counsel for the Respondents, FBR, Malik Zafar Ali Thaheem has controverted the arguments of learned counsel for the Petitioner and stated that the Commissioner Inland Revenue, Corporate Zone, RTO, Multan has delegated his powers and functions under Section 122(5A) vide order No.CIR( Corp.Zone)/R TO-MN/272 dated 29.07.2016 in accordance with the provision of section 210 of the Ordinance therefore, the proceedings under section 122(5A) have been initiated as per law. He argued that section 4B of the Ordinance provides for determination of tax liability under said provision which essentially involves amendment of return of income and sub-section 3 of Section 4B clearly indicates that super tax payable shall be paid, collected and deposited on the date and in the manner as specified in sub-section (1) of Section 137 of the Ordinance and provisions of Chapter X of the Ordinance, which deals with returns, assessment, appeals and collection and recovery of tax, can be applied. He further argued that Section 122 of the Ordinance is applicable to supe r tax as the Commissioner may amend an assessment order treated as issued under Section 120 or issued under Section 121 by making such alteration or additions as the Commission er considered necessary . He next argued that sub section 4 of Section 4B of the Ordinance empowers the Commissioner to determine the super tax liability and to serve order to taxpayer regarding determination of liability to taxpayer . He next argued that Section 4B relates to super tax imposed for rehabilitation of temporarily displaced persons which itself is a charging section with definition of recovery procedure & assessment mechanism and the rate for calculation of tax have been specified in Division IIA of Part I of the First Schedule of the Ordinance. Lastly Malik Zafar Ali Thaheem Advocate argued that writ against show cause notices is not maintainable and relied on "D.G. KHAN CEMENT COMP ANY LIMITED Versus FEDERAL BOARD OF REVENUE and others" (2018 PTD 287), "MUHAMMAD ASLAM Versus FEDERATION OF PAKIST AN and others"( 2017 PTD 803),"Messrs OCEAN PAKIST AN LTD Versus FEDERAL BOARD OF REVENUE, ISLAMABAD and others"( 2012 PTD 1374 ), and "Messrs NOBLE (PVT) LTD through Manager Finance and Administration Versus FEDERAL BOARD OF REVENUE through Chairman and 4 others"( 2009 PTD 841 ).
IV. FISCAL ANTHROPOLOGY
6. Legal anthropology examines the relationship amongst society , culture, and law (taxes levied) in societies at various levels of political, economic, and social complexity . Legal anthropology is a sub-field of the discipline of anthropology . In the case at hand, it is the fiscal anthropology , which needs to be explored. In Murray & Carter 's Guide to Income Tax Practice at page 3, Earl Cairns of the House of Lords said: "as I understand the principle of all fiscal legislation it is this: if the person sought to be taxed comes within the letter of the law, he must be taxed, however great the hardship may appear to the judicial mind....In other words, if there be admissible in any statute what is called an equitable construction, certainly such a construction is not admissible in a taxing statute, where you can simply adhere to the words of the statute."
In 1916 the Lord Stanley Buckmaster of the House of Lords remarked, "...if the words of the statute can only reasonably bear one meaning, it is not, in my opinion, within the competence of the Courts to consider the fairness or the unfairness of the result that ensues. That is a matter for Parliamen t and not for H.M's judges." The words of Mr. Justice Rowlatt in the case of Cape Brandy Syndicate vs. Inland Revenue Commissioners, [1921] 1 KB 64 also need to be mentioned when he said, "there is no room for any intention, there is no equity about a tax, there is no presumption of parties to a tax, you read nothing in, you imply nothing, but you look fairly at what is said and at what is said clearly and that is the tax."
7. If we were to quickly stroll through the history of taxation, it would emerge that taxation in some form was present since ancient Egypt and Greece. The Romans also introduced the concept of customs duties on imports and exports, and the Great Britain inherited its tax history from the Roman Empire. If we look at the history of the sub-continent, the Income Tax was introduced by the British Government through the Income Tax Act 1860 (which was replica of the then respective British law) to overcome the financial difficulties after the 1857 war of independence. Subsequently , four Income Tax Acts of 1886, 1918, 1922 and 1939 were introduced in British India which were important developments to the tax system. After independence in 1947, Pakistan adopted the Income Tax Act, 1922 as its official income tax law, which was modified several times. This was replaced by the Income Tax Ordinance, 1979. Subsequently , the current Income Tax Ordinance, 2001 was introduced and FBR has also notified the Income Tax Rules, 2002.
8. The Finance Act, 2015 (the "Act") was passed by the National Assembly of Pakistan on June 29, 2015 which, inter alia, amended the Ordinance by inserting Section 2(28A) and Section 4(B) in the Ordinance, vide Section 9(2) of the Act. Through Section 4B of the Ordinance, an additional tax in form of Super Tax has been levied in terms of which a levy has been imposed for rehabilitation of temporarily displaced persons at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division. The present dispute in the instant proceedings relates to this legal development regarding its mode and manner of being applied.
V. CONSTITUTIONAL MOOT POINTS
9. In order to resolve the controversy in the matter , this Court deems it appropriate to frame the following constitutional moot points:
1. What is the scope of Section 4B of the Ordinance and whether it is a complete comprehensive section with its own mechanism of charging, definitions, recovery , assessment, procedure?
2. Whether Section 4B can be applied to recover any amount without framing the rules by the Board under sub- section 6 of Section 4B?
3. Whether Section 122 of the Ordinance is applicable to super tax under Section 4B of the Ordinance in absence of its notified rules?
4. Whether Additional Commissioner Inland Revenue has powers to issue show cause notice of Section 4B(1) read with Section 122 of the Ordinance?
5. Whether writ is maintainable against show cause notice under the Ordinance, without filing reply to show cause notice?
VI. DETERMINA TION BY THE COURT (AS PER ARTICLE 201 OF THE CONSTITUTION)
A. LEGAL ANA TOMY OF SELF-CONT AINED CODE
10. As stated earlier , super tax has been imposed for the rehabilitation of temporarily displaced persons for the tax year 2015 and has been extended till 2017. Section 4B of the Ordinance reads as under:- 4B. Super tax for rehabilitation of temporarily displaced persons.--- (1) A super tax shall be imposed for rehabilitation of temporarily displaced persons, for tax years 2015 to 2017, at the rates specified in Division IIA of Part I of the First Schedule, on income of every person specified in the said Division.
(2) For the purposes of this section, "income" shall be the sum of the following:--
(i) profit on debt, dividend, capital gains, brokerage and commission;
(ii) taxable income 4[(other than brought forward depreciation and brought forward business losses)] under section 9 of this Ordinance, if not included in clause (i);
(iii) imputable income as defined in clause (28A) of section 2 excluding amounts specified in clause (i); and
(iv) income computed under Fourth, Fifth, Seventh and Eighth Schedules.
(3) The super tax payable under subsection (1) shall be paid, collected and deposited on the date and in the manner as specified in subsection (1) of section 137 and all provisions of Chapter X of the Ordinance shall apply .
(4) Where the super tax is not paid by a person liable to pay it, the Commissioner shall by an order in writing, determine the super tax payable, and shall serve upon the person, a notice of demand specifying the super tax payable and within the time specified under section 137 of the Ordinance.
(5) Where the super tax is not paid by a person liable to pay it, the Commissioner shall recover the super tax payable under subsection (1) and the provisions of Parts IV, X, XI and XII of Chapter X and Part I of Chapter XI of the Ordinance shall, so far as may be, apply to the collection of super tax as these apply to the collection of tax under the Ordinance.
(6) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.
(emphasis added ).
11. With regard to the limb concerning the features of independence, stand alone, self-executory and self- contained nature of the provision, it is instructive to glean through the case of "PAKIST AN INDUSTRIAL DEVELOPMENT CORPORA TION Versus PAKIST AN THROUGH THE SECRET ARY, MINISTR Y OF FINANCE"
(1992 SCMR 891) where a challenge to super tax levied by virtue of Section 55 of the Income Tax Act, 1922 was made on the basis of double taxation. The Hon'ble Supreme Court had observed at para 15 as follows: "Section 55 clearly provides that super -tax will be in addition to the income-tax on the total income of the previous year at the rate laid down for that year by the `Central Act'. According to section 56 total income as assessed for the purposes of income-tax shall be the total income for purposes of super -tax. Section 58 applies the provisions of Income Tax Act relating to charge, assessment, collection and recovery of income-tax to super -tax as well. Super- tax is, therefore, independent, separate and-quite distinct from income-tax . It is a tax in addition to income-tax on the total income of the assessee. Super -tax has been levied in addition to income-tax by a clear and independent provision for whose charge, assessment and recovery procedure has been provided by section 58.
The Legislature by clear unambiguous and in definite terms levied super -tax on the total income determined for purposes of income-tax".
12. Going by the ratio decidendi of the afore referred case, suffice it to observe that the super tax, by its very nature, relates to an additional duty of income tax and this charge has been recognized to exist independent of the income tax. Hence, in so far as the charge/levy of the super tax is concerned, Section 4B definitely emerges as an independent provision. This Court has held in a case titled "D.G. KHAN CEMENT COMP ANY LIMITED Versus FEDERAL BOARD OF REVENUE and others" (2018 PTD 287) that "evidently if the legislature has enacted a separate provision for the charge of super tax, the intention and mood of the legisla ture is very clear and no further expression is required to hold that the legislature intended for separate charge in the nature of super tax". This view has been ratified by the Division Bench of this Court on 28.2.2020 and in a case reported as "DG KHAN CEMENT Versus FEDERA TION OF P AKIST AN etc" ( 2020 LHC 1066 ).
13. However , that said, the flip side is with regard to the applicability of machinery provisions of the Ordinance to this particular section. It has been argued on behalf of the Petitioner that Section 4B clasps its own machinery provisions for assessment and recovery and exclude the machinery provisions of the Ordinance i.e. Section 122(5A) read with Section 122(9) of the Ordinance.
14. It is noteworthy to mention that apparently sub-section (3) of 4B of the Ordinance envisages application of all provisions of Chapter X. This Chapter happens to contain Section 122 of the Ordinance. Further Section 4B also finds specific reference to Section 137(1) of the Ordinance with regard to payment, collection and deposit. Similarly sub-section (5) of 4B imports the provisions of Part IV, X, XI and XII of Chapter X and Part 1 of Chapter XI with regard to recovery of super tax and finds mention of the following words, "so far as may be, apply to the collection of super tax as these apply to the collection of tax under the Ordinance". Thus, Section 4B encapsulates and makes direct reference to the above-referred provisions of the Ordinance suggesting their applicability while interpreting Section 4B of the Ordinance.
B. SCHEME OF INTERPRETING A TAXING ST ATUTE
15. Devouring Section 4B might give an enigmatic impression in terms of being a self-contained code yet encompassing within its ambit other provisions of the Ordinance with regard to assessment and recovery i.e. the so-called machinery provisions. In order to grapple with the real construct of the section and to cast aside clouds of doubt, reference will have to be made to the principles of construction/interpretation of a fiscal statute. I shall turn to that in the proceeding part of the judgment.
16. Firstly , a momentary peep into the self-executing provisions relating to fiscal legislation is in order . With advantage, reference is made to the case of "NESTLE PAKIST AN LTD. and others Versus FEDERAL BOARD OF REVENUE and others"( 2017 PTD 686) wherein the Court discussed self-executing provisions at para 7 in the following words: A passage, in the 10th Edn. of NS Bindra's Interpretation of Statues, has dealt with self-executing provisions relating to fiscal legislations, which is also reproduced being relevant to the subject of this judgment:- "A constitutional provision authorising the levy of a tax is without effect, unless provision for such levy is made by the legislature, but, it fully supplemented by legislation in force at the time of its adoption, it takes effect at once. A provision requiring the legislature to levy a tax at a certain rate has been held self-executing. Provisions that property shall be assessed for taxes under general law and by uniform rules according to its value are self- executing. Moreover , a provision has been held self-executing, which authorised the levy by local officers of a tax to an amount and for purposes specified, subject to compliance with conditions fully stated therein. A constitutional provision limiting the rate of taxation does not require legislative action to enforce it and goes into effect at once, unless it appears from a consideration of the whole instrument that it was the intent of the framers to postpone the operation of the provision until action by the legislature.
Provisions authorising municipal authorities to levy taxes, providing for an increase in the rate in taxation on submission to a vote of the taxpayers, or for assessments by a jury or by commissioners, requiring the legislature to provide a uniform system of taxation, declaring that all taxes shall be uniform to be collected under general laws, declaring that all property shall be taxed in proportion to its value, 'to be ascertained as provided by law,' providing for the payment of certain taxes into the common school fund and for their distribu tion, declaring that certain kinds of property shall be taxable as provided by law, requiring provision to be made by general laws to prevent the abuse by municipal corporations of the powers of taxation and contracting debts and provisions for the collection of taxes without suit are not self-executing and require supplemental legislation to render them effective. A provision fixing the minimum amount at which patented mining claims shall be assessed is self-executing. Constitutional provisions declaring certain classes of property exempt from taxation are self executing; but provisions authorising the legislature to exempt specified classes of property , or requiring the exemption of certain property from taxation by general law, are not operative until such legislation is enacted. In all of the cases on this subject, if it appears from the provision that anything remains to be done to complete the objects contemplated, it is to that extent is inoperative, and will remain so until all such requirements are complied with."
It is recapitulated that a provision is self-e xecuting if rights granted or duties imposed are enforceable in absence of any supplementary legislation; in other words if manifest intention is found in language of the provision that power conferred should go into immediate effect and no ancillary legislation is necessary , then the provision is self- executing. The provision is not self-executing if it indicates merely a line of policy or principles, without giving means by which such policy or principles are to be carried into effect, or it is directed in the provision for framing of Rules through delegated powers to enforce the rights, duties or powers given therein .(emphasis supplied)
17. Hence, the literature contained in books, Law and Practice of Income Tax by Nani Palkivalla and J Kanga and Interpretation of Statue by NS Bindra regarding self-executing provisions clearly spells out that the provision cannot be taken to be self-executing if it is directed in the provision for framing of Rules. In our case as well rules under sub-section (6) of Section 4B are yet to be framed which buttresses that the section is not self-executory as such.
However , the impact of non-existence of rules on the application of a statutory provision shall be discussed in the latter half.
18. Furthermore, the learned Bench of this Court while deciding the Writ Petition No. 3522 of 2017 (different from the one reported in (2018 PTD 287), with the same title mentioned in the earlier part) titled "D.G. KHAN CEMENT COMP ANY LIMITED Versus FEDERAL BOARD OF REVENUE and others" had the occasion to dilate upon the scope of Super Tax under Section 4B of the Ordinance. It was held that: .... clearly the intention of the legislature is to specify a special procedure in respect of super tax and, therefore section 4B of the Ordinance is a complete code unto itself. Moreover , by sub section (6) of section 4B, the Board may make rules for carrying out the purpo ses of this section. This further gives powers to the Board to make rules by a notification and which rules may provide all matters for carrying out the purpose of section 4B. Therefore, although the enumerations of section 4B do not clearly oust the other provisions of the Ordinance, by necessary intendment the intention of the legislature is to clothe the Commissioner special powers for the assessment and recovery of super tax.
Subsequently this Court in the Writ Petition No. 10477 of 2017 titled "Maple Leaf Cement Factory Versus Additional Commissioner Inland Revenue and others" approved of the reasoning of the above referred (supra) case with regard to Section 4B being a complete code.
19. I respectfully do not subscribe to the opinion of the above-referred cases (supra) in particular to the extent of the finding that Section 4B is a complete code on to itself and has to be read independently of all other provisions of the Ordinance specifically mentioned in Section 4B of the Ordinance.
20. In holding this view, I have taken guidance from the principles of construction and rules of interpretation of fiscal statutes and case precedents surrounding them. To set it on the legal plane, reference is made to the case of "PARTNERSHIP CONCERN Versus THE DEPUTY COLLECT OR CENTRAL EXCISE AND SALES TAX, LAHORE and 3 others" (PLD 1989 Lahore 337) where Rustam S. Sidhwa J. beautifully summarized the getup of the Fiscal Statutes in general by opining: "18. There are three distinct types of provisions generally in every fiscal enactment. The charging provisions, which relate to the levy or charge of the tax, which usually state that tax is to be levied and on what matter , or goods or income and in which manner and at what rate and matters relevant thereto. The assessment provisions, which deal with the assessment, calculation or quantification of the tax for the purposes of determining the amount of tax due and payable or which has escaped collection or has been under assessed for assessed at a lower rate or on which excessive relief or refund has been allowed. The collection provisions, which relate to the mode and manner of receipt or collection of the tax. The charging sections have to be strictly construed and any benefit found therein has to be given to the tax-payer . However , the assessment and collection provisions are merely the machinery sections and they can be liberally construed.
19. The words "levied", "charged", "paid" and "collected" generally used in charging sections do not indicate that assessment provisions or collection provisions are included in the charging sections. These words are only used in a general sense to indicate that the duty or tax would be demanded or collected at the rate or in the manner as provided by the charging section. The procedures as regards assessment and collection are separately provided for .
20. However , it is possible to conceive of cases where the word "levied" or "collec ted" in the charging sections of certain enactments have perforce to be construed as covering assessment proceedings also, if no separate provisions are found in the enactments to cover assessment proceedings. In such cases the word "levied" or "charged" could validly be construed as including assessment or the entire process of collecting the tax. But this would be on the principle of implied construction or necessity .
21. The words "levied" "charged", "collected", "paid" and "payable" are generally found connected with charging sections in fiscal enactments. In charging sections the words "levied" generally means to raise, impose or collect tax or duty. In Abdul Rashid v. Central Board of Revenue and others (PLD 1965 Pesh. 249) the word "levied", as used in Articles 48 and 237 of the Constitution of 1962, was held to relate to the charging provision i.e. fixation of a rate of duty. By itself the word "levie d", charged" and "collected" does not impose the charge. The charge or imposition arises by virtue of the language of the charging section itself. These words only point or give indication to the element of demand, namely , that it will be demanded, claimed or collected at the rate and/or in the manner provided in the charging section. Howeve r, apart from charging sections, the word "levy" or "levied" in other parts of fiscal enactments could indicate not only the power to impose or raise a tax or duty, but also to assess or collect the same, depending upon how, where and in what context the word is used and whether such extended meaning is possible, There is no cardinal rule that wherever the word "levy" or "levied" occurs, the element of assessment or collection must be deemed. (emphasis mine)
21. Moreover , in the case reported as "Messrs MUL TAN ELECTRIC POWER CO. LIMITED (MEPCO) through Chief Executive Versus COMMISSIONER, INLAND REVENUE (WHT), REGIONAL TAX OFFICER, MUL TAN and another ( 2016 PTD 2567 ), the Court observed that: "9 Statute must be read as an organic whole and all its provisions must be harmoniously `reconciled instead of picking out inconsistency between different provisions. The principle of interpretation of statute is that all provisions of a statute have to be read together and harmonious construction is to be placed on such provisions so that no provision is rendered nugatory . ....
11. Needless to observe here that words should be read in their ordinary , natural and grammatical meaning, subject to the rider that in construing the words in the legislative instrument/provision of law, the most liberal construction should be put upon the words so that the same may have effect in their widest amplitude".(emphasis added).
22. Similarly in "PAKIST AN TOBACCO COMP ANY LTD. Versus FEDERA TION OF PAKIST AN and others"
(2016 PTD 596 ) the Court opined: "15 It is settled law that while interpreting fiscal statutes the Court looks at what is clearly said; there is no room for any intendment; nor is there any equity about a tax; there is no presumption as to tax; nothing was to be read in or implied and one could only look fairly at the language used. These principles were stated by Rowlett J regarding the interpretation of fiscal statutes in the case of 'Cape Brandy Syndicate v. Inland Revenue Commissioner', (1921) 1 KB 64. The taxing statute has to be interpreted strictly , and as a corollary any defect or omission cannot be inferred. Moreover , it is settled law that the parameters provided in a taxing statute determines chargeability and levying of a tax. Moreover , the law ought to be interpreted in the case of fiscal statutes by looking at the language in its literal and ordinary meaning. A fiscal statute cannot be declared ultra vires on the touchstone of reasonableness or otherwise, as the same has been declared by the august Supreme Court to be a matter of legislative policy and not for the Court to adjudicate upon.....
20. It is settled law that unlike the principle of strict construction in the case of charging sections, the machinery provisions are construed liberally so as to effectuate the charging provisions. The august Supreme Court has observed and held in the case of 'Pearl Continental Hotel and another v. Government of N.-W .F.P. and others'
[2010 PTD 2018] that 'We are in no doubt that the machinery provisions, where provided, have to be construed liberally and in a manner aiding the realization of proper tax and to prevent avoidance of the tax".
23. Correspondingly in the case "ALLIED MOT ORS LTD. through Manager Finance Versus COMMISSIONER OF INCOME-T AX and another" (2004 PTD 1173) while interpreting provisions of Income Tax Ordinance 2001, the Court held, inter alia that: "a scheme of law is to be examined in its totality and no provision of law is to be considered in isolation".
(emphasis added)
Yet another case precedent is "COMMISSIONER OF INCOME-T AX Versus Messrs KAMRAN MODEL FACTORY" (2002 PTD 14 ) where it was said that: "The Assessing Officer would have no option but to make an order for levy of Workers' Welfare Fund on the principle of interpretation of statute that every word used in a statute has to be given effect to and no word or provisions of a statute is to be treated as surplusage and redundant. ...."
24. Moreover , in the case of Mustafa Prestressed R.C.C Pipe Works Ltd. Karachi Versus Commissioner of Sales T ax Karachi [(1990) 62 T ax 119 (H.C.Kar .)] the Court graciously observed that: "It is well settled principle of interpretation that all the provisions of an enactment have to be construed harmoniously".
In the case Hirjana & Co. (Pak) Ltd. Karachi versus Commissioner of Sales Tax, Central Karachi [(1975) 31 Tax 78 (S.C.Pak. )] again the Apex Court had the oppor tunity of discussing the rules of interpretation to be employed while dealing with fiscal statutes and held that: "We may here observe that in interpreting the taxing statute the courts must look to the words of the statute and interpret it in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provisions in the statute so as to support assumed deficiency".
25. In the case CIT Versus Nagina Talkies (property) Karachi [(1974) 29 Tax 115 (H.C Kar.)]it was again opined that: "In fiscal statutes the meaning has to be ascertained from the plain language of the statute and nothing is to be implied in such statute".
Likewise, in the case "COMMISSIONER OF INCOME-T AX, EAST PAKIST AN, DACCA Versus MESSRS HOOSEN KASAM DADA, KARACHI" ( 1960 PTD 574 ), the Court observed: "14. In interpreting the statute, one is to see whether a reasonable meaning can be given after reconciling the various provisions contained in the different sections and not to read one section independently of all other sections and give any unreasonable interpretation."
26. Trawling through the case law and reckoning the principles of interpretation of fiscal laws, I harbour no doubts in saying that Legislature has envisaged application of provisions of assessment and recovery as contained in Chapter X i.e. inter alia Sections 120 and 122 of the Ordinance to Section 4B by employing the term "all" in Section 4B sub section (3). Similarly sub section (5) of Section 4B imports the provisions of Part IV, X, XI and XII of Chapter X and Part 1 of Chapter XI with regard to collection and recovery of super tax and finds mention of the following words, "so far as may be, apply to the collection of super tax as these apply to the collection of tax under the Ordinance".
27. To my mind, the Legislature has used the words consciously and or provisions of a statute is to be treated as surplusage and redundant when interpreted in its literal and ordinary meaning. It is trite law that provisions in a taxing statute must be harmoniously reconciled instead of picking out any inconsistency between the different provisions. Thus, all provisions of a statute have to be read together and harmonious construction is to be placed on such provisions so that no provision is rendered nugatory . Hence, in so far as the charge/levy of super tax is concerned, Section 4B appears to be an independent provision. However , its sub sections (3), (4) and (5) need to be read in consonance with each other along with the other provisions of the Ordinance as specified in those sections.
C. CLEA VAGE DUE T O NON-FRAMING OF THE RULES
28. Consequently , this leads me to dilate upon another related ancillary matter i.e. whether Section 4B could be applied to recover the amount without framing of rule by the Board as envisaged by sub-section (6) of 4B of the Ordinance? Sub-section 4B of the Ordina nce says that the Board may make rules for carrying out the purpose of Section 4B. The Hon'ble Supreme Court has settled this question in the case "SHAHID PERV AIZ Versus EJAZ AHMAD" ( 2017 SCMR 206 ) where it opined that: "It is settled law that the operation of a statute or any statutory provision is not dependent upon framing of the Rules. In some cases the absence of Rules may affect the enforceability or operatability of the statute...The framing of Rules would be generally relevant for determining as to whether the power under the statute has been exercised properly or not, but the existence of Rules could neither save nor destroy the constitutional validity of the Rules".
D. APPLICABILITY OF SECTION 122 ONT O SECTION 4B
29. Now coming to the question, while bearing in mind the discussion elaborated previously , whether the stand- alone provisions of Section 4B of the Ordinance allow incursion of Section 122(5A) read with 122(9) of the Ordinance? In other words, whether Section 4B exclusively clothes the Commissioner with the special powers for the assessment and recovery of super tax and precludes the machinery provisions of the Ordinance i.e. Sections 122(5A) read with 122 (9). The answer is in the negative for the reasons extensively dealt in the earlier part of this judgment where it was said that Section 4B of the Ordinance does not preclude the scope of other sections i.e. Sections 122(5A) and 122(9) of the Ordinance as express reference has been made to them in Section 4B of the Ordinance. Following the principles of interpretation, they have to be read in consonance with each other .
30. Noticeably the Legislature has envis aged a broad sweep application of the provisions of Chapter X of the Ordinance which entails Section 122 and is clear from the wording of sub-section (3) of 4B of the Ordinance.
Moreover , sub-section (5) of Section 4B also imports machinery provisions of the Ordinance as discussed extensively in afore referred paras of the judgment. As a corollary , it follows that Section 4B along with its sub sections ought to be read in conjunction with the machinery provisions of the Ordinance i.e. Section 122. Hence the Commissioner can very well invoke and utilize the provisions of Section 4B read with Section 122(5A) read with 122(9) of the Ordinance.
E. ASPECT OF DELEGA TION
31. Another question which crops up amidst this controversy , which is crucial and connected, is whether the power to assess and determine liability for the purposes of super tax under Section 4B vests exclusively with the Commissioner Inland Revenue or the same could be delegated to the Additional Commissioner Inland Revenue for invoking the machinery provisions i.e. 122(5A) read with 122(9) of the Ordinance. It is noteworthy to mention that the scheme of the Ordinance in respect of the powers and functions of the Respondents is such that upon filing of the return by a tax payer , such return becomes an assessment order of the Commissioner Inland Revenue under the scheme of universal self-assessment captured by Section 120 of the Ordinance.
32. The Commissioner Inland Revenue is then empowered under sub sections (5) and (5A) of Section 122 to amend and revise such assessment orders after ensuring that the conditions laid down for the exercise of jurisdiction with respect to the afore said provisions are duly met. As aptly pointed out in the Division Bench judgment reported as "PAK TELECOM MOBILE LTD. and others Versus FEDERAL BOARD OF REVENUE through its Chairman, Islamabad and others" ( 2013 PTD 2151 ) of the Islamabad High Court at para 9: "assessment made under section 122(5A) of the Income Tax Ordinance, 2001 is previously a conversion of return of income tax into assessment order by legal fiction, as the law deems a return to be an assessment order .
Consequently it could be amended under section 122(5A) by the Commissioner".
In the same judgment, the power of delegation by the Commissioner was discussed in the following words: "The Commissioner could delegate the powers and functions under section 122 (5A) of the Income Tax Ordinance, 2001 to an officer not below the rank of Additional Commissioner , therefore, he has validly delegated these powers, vested in him as provided by section 210 of the Income T ax Ordinance".
33. It is evident that under Section 210 of the Ordinance, the Commissioner can delegate his powers and functions.
Further Section 210 (1A) reveals that the power in terms of Section 122(5A) regarding amendment of assessment could not be delegated below the rank of the Additional Commissioner .
34. The contention of the Petitioner that delegation cannot be done while assessing and determining the liability for super tax is fallacious. This fact is strengt hened from bare reading of Section 210(1) of the Ordinance which reads as follows: The Commissioner [subject to sub-section (1A),] may, by an order in writing, delegate to any [Officer of Inland Revenue, subordinate to the Commissioner] all or any of the powers or functions conferred upon or assigned to the Commissioner under this Ordinance , other than the power of delegation. (emphasis added).
35. Bare reading of the section manifestly lays down that delegation of power could be done under the Ordinance subject only to sub section (1A). Therefore, without imputing a stretched meaning into the taxing statute, it is clear that Section 210 applies to Section 4B of the Ordinance as well. In other words, all those sections in the Ordinance which deal with the powers and responsibilities of the Commissioner , the-said powers could very well be delegated by the Commissioner as per the mandate of Section 210 of the Ordinance. Section 4B is indeed part of the Ordinance being one of the sections so the applicability of Section 210 cannot be excluded.
36. Moreover , it is suffice to observe that Section 4B does not specifically exclude applicability of Section 210 from its purview . In fact sub section (5) of Section 4B imports the provisions of Part IV, X, XI and XII of Chapter X and Part 1 of Chapter XI with regard to collection and recovery of super tax and finds mention of the following words, "so far as may be, apply to the collection of super tax as these apply to the collectio n of tax under the Ordinance". It is worth mentioning that Section 210 falls under Chapter XI, which finds mention in sub section (5) of 4B of the Ordinance. It is clear from the language of Section 4B that not only provisions of recovery but provisions of assessment of the Ordinance which collectively could be referred as the machinery provisions of the Ordinance have also been made applicable to it.
37. In this regard it is pointed out that the powers under section 122(5A) read with 122(9) of the Ordinance, so vested, were initially conferred by the Legislature in 1959 by enshrining Section 34 in repealed Income Tax Act, 1922. Identical provisions were the part of repealed Income Tax Ordinance, 1979, in which, same were expressed as Section 66-A. Simultaneously , the same have been incorporated by way of now Section 122(5A) read with sub Section 9 of the Ordinance. As opined in the case "PAK TELECOM MOBILE LTD. and others Versus FEDERAL BOARD OF REVENUE through its Chairman, Islamabad and others (supra), "the current Income Tax Ordinance, 2001 has introduced a legal fiction whereby all acts are done in the name of Commissioner . In order to avoid controversies, the powers have been delegated to subordinate officers. In this regard, attention is drawn to Article 90 of the Constitution, which provides that the executive authority of the Federation shall be exercised in the name of the President."
38. This brings me to the question of authority of the Additional Commissioner under Section 122(5A) of the Ordinance. This issue was settled by the below referred decision of the Hon'ble Supreme Court in the case of "Messrs OCEAN PAKIST AN LTD Versus FEDERAL BOARD OF REVENUE, ISLAMABAD and others" (2012 PTD 1374 ). The August Court, while approving of the delegation of powers to the Additional Commissioner , observed inter alia, "that the petitioner can raise all possible factual and legal objections before the authority , which has sought its explanation by issuing show-cause notice."
39. Now that I have discussed and established that the delegation could be validly done under the Ordinance and its applicability cannot be precluded from Section 4B of the Ordinance, it will be in order to mention that for constituting a valid delegation of power s under Section 210(1) of the Ordinance, certain conditions must be satisfied. In the case bearing W.P No. 27535 of 2016 titled Jahangir Tareen Khan vs. Federation of Pakistan etc., this Court held that in order to constitute a valid delegation, the following conditions must be satisfied:
(a) The delegation must be in writing;
(b) The delegation order must specify precisely the powers and functions of the Commissioner Inland Revenue that have been delegated to the delegate; (c) The delegation order must specify the persons in respect to whom the powers and functions of the Commissioner Inland Revenue have been delegated."
40. In the latter part, I will discuss whether the Jurisdiction Order dated 29.07.201 6 relied upon by the counsel for the Respondents satisfy the above-referred conditions.
F. DOCTRINE OF RIPENESS AND ITS EFFECT ON SHOW CAUSE NOTICE
41. Now coming to the point whether writ petition is maintainable against show cause notice, it will be in the fitness of things to take guidance from the dictum of the case precedents developed on this particular issue. It will emerge that the consistent view of the Courts has been that a mere show cause notice is not an adverse order . However , the Court in exercise of its Constitutional jurisdiction could take up writs to challen ge the show cause notice if it is found that the show cause notice is totally non est i.e. want of jurisdiction of the issuing authority or has been issued malafidely i.e. merely to harass the subject.
42. First in line is the case "MUGHAL-E-AZAM BANQUET COMPLEX through Managing Partner Versus FEDERA TION OF PAKIST AN through Secretary" (2011 PTD 2260 ) where "doctrine of ripeness " was elaborated by Syed Mansoor Ali Shah, J . in the following words:
5. The other aspect of the matter is that mere issuance of Show-Cause Notice does not mean that the case will invariably be decided against the petitioner and there is always a possibility that the same may be decided in favour of the petitioner . Laying challenge to a show cause notice is, therefore, no different that filing a petition on the basis of an apprehension or a specula tion. Such a petition is premature and not ripe for adjudication. "Just as a case can be brought too late, ...it can be brought too early , and not yet be ripe for adjudication... until the controversy has become concrete and focused, it is difficult for the Court to evaluate the practical merits of the position of each party ."The basic rational behind the "Ripeness" doctrine is "to prevent the courts through avoidance of premature adjudication, from entangling themselves, in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." "Ripeness" requires that an issue be sufficiently formed and felt to be a justifiable controversy ...As courts insist on a concrete context, that context enables them to better see the problems that they are supposed to redress. As courts insist on completed agency action, that insistence may (1) eliminate the waste of courts deciding disputes that might be mooted as an agency runs its course, (2) assure the courts of the knowledge gained from applied agency expertise, and (3) provide them with a record already developed by the agency . .....
7. Petitioner , however , can invoke the constitutional jurisdiction of this Court, if the Show-Cause Notice is not issued by a competent authority or the liability in the Show Cause Notice is palpably unlawful and without jurisdiction. This is not so in the present case. Show -Cause Notice is admittedly issued by a competent authority and its contents do not prima facie reveal that the liability is ultra vices the law .
43. The Court in "Messrs SIEMENS AKTIENGESELLSCHAFT ("SIEMENS AG") 2 through Auth orized Person Versus PAKIST AN through Secretary Revenue Division and 3 others" (2016 PTD 1158), aptly explained the meaning of the phrase "show cause notice" and went on to explain how a Petition er could come within the fold of an aggrieved person when filing a writ against the show cause notice in the following terms: "While exercising jurisdiction under Article 199 of the Constitution, the powers of a High Court are circumscribed by certain limitations and trappings, as expressly provided therein. The petitioner invoking jurisdiction has to satisfy the Court that it comes within the fold of an 'aggrieved party'; there is no other adequate remedy provided by law; the person against whom relief is being sought satisfies the test laid down in sub-article (5) of Article 199 of the Constitution, and no disputed question of fact is involved.
A person is aggrieved if rights are infringed or an adverse order has been passed affecting or threatening to affect rights. The question for this Court to answer, therefore, is whether a show cause notice can be treated as an adverse order . If the answer is in the negative, then under what circumstances may a show cause notice make a person an aggrieved party for the purposes of Article 199 of the Constitution.
We may start with the determination of the nature of the instrument known as a 'Show Cause Notice'. The Black's Law Dictionary , 8th Edition, defines the 'show cause' as "to produce a satisfactory explanation or excuse, usu. in connection with a motion or application to a Court". Likewise, 'notice' is defined as "legal notification required by law or agreement, or imparted by operation of law as a result of some fact (such as the recording of an instrument); definite legal cognizance, actual or constructive, of an existing right or title. A person has notice of a fact or condition if that person (1) has actual notice of it; (2) has received information about if; (3) has reason to know about it; (4) knows about a related fact; or (5) is considered as official filing or recording". 'Due notice' is defined as "sufficient and proper notice that is intended to and likely to reach a particular person or the public; notice that is legally , adequate given the particular circumstance", 'Reasonable notice' is defined "notice that is fairly to be expected or required under the particular circumstances". Words and Phrases, Vol. 28-B, Permanent Edition, inter alia, describes a 'notice' as meaning 'intelligence by whatever means communic ated; information; knowledge; a constitutional requirement of due process, which includes allegations, opportunity to answer , and trial according to some settled course of procedure'.
A show cause notice is essentially an instrument whereby an authorised person under the law informs a person regarding allegations, material or facts which may form the basis for proceedings against such person, and may eventually culminate in an adverse order . A show cause notice is indeed the first requirement of compliance with 'due process' to inform the person against whom proceedings are intended to be initiated. The purpose is to put the person to notice by giving sufficient information so as provide an adequate opportunity of submitting an explanation. An authorised person empowered under the law, after issuing a show cause notice, is under a mandatory obligation to provide a purposive and meaningful opportunity of hearing, depending on the facts and circumstances in each case, allow the person proceeded against to produce evidence and where necessary an opportunity of cross-examination. After incorporation of Article 10-A of the Constitution the aforementioned requirements have become an integral part of the fundamental right of 'due process'.
Show Cause Notice is, therefore, the first step of the proceedings in compliance with the mandatory requirements of due process. By no stretch of the imagination can a show cause notice be treated or construed as an adverse order , so as to make a person an aggrieved person or party within the context of Article 199 of the Constitution. It is, rather , to enable the person, the subject, to rebut the allegations contained in the show cause notice. If satisfied with the explanation, the authorised office r is under a statutory duty to vacate the show cause notice and terminate the proceedings. However , the only two exception which may give a cause of grievance and thus make a person an aggrieved person in the context of Article 199 of the Constitution are, firstly , when it is issued by a person who is nod authorised under the law or conferred with the power or jurisdiction and secondly , when the powers and jurisdiction have been exercised by an authorised person for purposes alien to the empowering statute i.e. exercised for mala fide reasons. These are the only two exceptions ordinarily recognised in the precedent law which would make a person an 'aggrieved party' for the purposes of Article 199 of the Constitution, and thus invoke the jurisdiction there under .
44. In case titled "Dr. SEEMA IRFAN and others Versus FEDERA TION OF PAKIST AN" (PLD 2019 Sindh 519) the Court discussed the cases with regard to the maintainability of writ against show cause notice in the following words: ---This court in exercise of its extraordinary constitutional jurisdiction may take up writs to challenge the show cause notice if it is found to be lack of jurisdiction, barred by law or abuse of process of the court or coram non judice and obviously in such situation, may quash it but not in every case filed with the expectation and anticipation of ad-interim order by the assesse.
45. The Court in supra judgment further discussed judicial precedents at para 17 with regard to challenge to the show cause notice and maintainability of writ petitions: 2 2002 SCMR 805 (Khalid Mahmood Ch. v. Government of the Punjab) . Disputed show-cause notice was still at preliminary stage. Competent Authority after considering petitioners' replies, if came to the conclusion that it was a case of taking further proceedings under the Ordinance then it would be required to constitute an Enquiry Committee or appoint an Enquiry Officer. Constitutional petition had rightly been held to be premature and dismissed as such.
3. 2011 PTD 2103 (Karachi Bulk Storage and Terminals (Pvt.) Ltd. v. Collector of Central Excise and Land Customs ).Constitutional petition challenging issuance of show-cause notice by authority . Petition involving questions as to whether such notice was issued with lawful authority or not; and whether interpretation of Section 2(6) of Sales Tax Act, 1951 made by authority was in accordance with law or not. Petitioner had questioned jurisdiction of authority and its action in issuing such notice was alleged to be prejudicial, unjust and mala fide.
Constitutional petition was maintainable in circumstances. INDIAN PRECEDENTS
46. Discussion on maintainability of writ against show cause notice has been extensively dealt with by the Superior Court of India in the following pronouncements:
1. Union of India (UOI) and others v . Vicco Laboratories (2007) 13 SCC 270 Normally , the writ court should not interfere at the stage of issuance of show cause notice by the authorities. In such a case, the parties get ample opport unity to put forth their contentions before the concerned authorities and to satisfy the concerned authorities about the absence of case for proceeding against the person against whom the show cause notices have been issued. Abstinence from interference at the stage of issuance of show cause notice in order to relegate the parties to the proceedings before the concerned authorities is the normal rule. However , the said rule is not without exceptions. Where a Show Cause notice is issued either without jurisdiction or in an abuse of process of law, certainly in that case, the writ court would not hesitate to interfere even at the stage of issuance of show cause notice. The interference at the show cause notice stage should be rare and not in a routine manner .
2. SBQ Steels Limited v. The Commissioner of Customs, Central Excise and Service Tax, Guntur Commissionerate. 2013 (2) ALD 158 It is off course true that the show cause notice cannot be read hyper -technically and it is well settled that it is to be read reasonably . But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegation s contained in the show cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. Therefo re, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice.
3. State of Uttar Pradesh v . Brahma Datt Sharma (1987) 2 SCC 179.
The High Court was not justified in quashing the show cause notice. When a show cause notice is issued to a Govt. servant under a statutory provision calling upon him to show cause, ordinarily the Govt. servant must place his case before the authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. The purpose of issuing show cause notice is to afford opportunity of hearing to the Govt. servant and once cause is shown it is open to the Govt. to consider the matter in the light of the facts and submissions placed by the Govt. servant and only thereafter a final decision in the matter could be taken. Interference by the Court before that stage would be premature.
4. The Special Director and others v . Muhammad Ghulam Ghouse and others AIR 2004 SC 1467 , This Court in a large number of cases has deprecated the practice of the High Court's entertaining writ petitions questioning legality of the show cause notices stalling enquiries as proposed and retarding investigative process to find actual facts with the participation and in the presence of the parties. Unless, the High Court is satisfied that the show cause notice was totally non est. in the eye of law for absolute want of jurisdiction of the authority to even investigate into facts, writ petitions should not be entertained for the mere asking and as a matter of routine, and the writ petitioner should invariably be directed to respond to the show cause notice and take all stands highlighted in the writ petition. Whether the show cause notice was founded on any legal premises is a jurisdictional issue which can even be urged by the recipient of the notice and such issues also can be adjudicated by the authority issuing the very notice initially , before the aggrieved could approach the Court. Further , when the Court passes an interim order it should be careful to see that the statutory functionaries specially and specifically constituted for the purpose are not denuded of powers and authority to initially decide the matter and ensure that ultimate relief which may or may not be finally granted in the writ petition is accorded to the writ petitioner even at the threshold by the interim protection, not granted.
5. Union of India and others v . Kunisetty Satyanarayana AIR 2007 SC 906, The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge- sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdiction to do so. It is quite possible that after considering the reply to the show-cause notice or after holding an enquiry the authority concerned may drop the proceedings and/or hold that the charges are not established. It is well settled that a writ lies when some right of any party is infringed. A mere show-cau se notice or charge-sheet does not infringe the right of any one. It is only when a final order imposing some punishment or otherwise adversely affecting a party is passed, that the said party can be said to have any grievance. Writ jurisdiction is discretionary jurisdiction and hence such discretion under Article 226 should not ordinarily be exercised by quashing a show-cause notice or charge sheet.
6. M/s. Kirloskar Computer Service Limited, Bangalore v. Union of India and others 1997 (73) ECR 651 (Karnataka), Court interference is justifiable only if the excise authorities have acted beyond the scope of the power available to them under the statute, i.e. if they have acted without jurisdiction. When the authorities are fully empowered to decide whether computer software development on a commercial scale amoun ts to manufacture or not, there decision, whether correct, partially correct, or even incorrect, is fully within their jurisdiction. Their finding cannot be said to be without jurisdiction merely because it adversely affects the assessee. As there is no inherent lack of jurisdiction in the CCE's order , the Court declines to intervene in the matter . The test for determining whether the order is competent, is not whether the same is as accurate as ought to be, but whether the power which the authority has involved to pass the order is truly available to it under the statute. If the answer be in the affirmative it would matter little whether the conclusion drawn by the authority was wholly correct, partially correct and partially incorrect or wholly incorrect, if the Collector eventually comes to a conclusion adverse to the petitioner , the same can be assailed in appeal before the prescribed appellate authority , but just because the Collector may pass an order which may not be to the liking of the petitioner , or may not eventually stand the test of scrutiny by a higher authority or Court would not affect the jurisdiction of the Authority to pass an order . In other words the jurisdiction to pass an order is different from a duty to pass a correct order . If there is no inherent lack of jurisdiction then just because the order that the Authority has passed or may propose to pass is not or may not be a correct order is no reason why the authority should be prevented from exercising its jurisdiction. Similarly if the Authority lacks inherent jurisdiction to pass an order , then even if the conclusion arrived at by it on merits may be legally unexceptionable, the order shall have to be set aside. Law not only requires that correct orders should be passed by it also requires that the same must be passed by the Authorities competent to do so. The remedy against an incorrect order passed by an Authority competent to do so is not a short cut to the High Court but recourse to the statutory remedies prescribed by the Act.
47. Sequentially in the case of "MARI PETROLEUM COMP ANY LIMITE D through General Manager Finance, Islamabad Versus FEDERA TION OF PAKIST AN through Secretary Revenue, Islamabad and 3 others"( 2019 PTD 1774 ), it was observed: "It is well settled that mere issuance of a show-cause notice does not amount to an adverse action. .... It is also well settled that a writ petition against the mere issuance of a show-cause notice is not maintainable unless the same is wholly without jurisdiction and in violation of a statute. ...." Similarly in the case "Messrs ATTOCK GEN LTD Versus ADDITIONAL COMMISSIONER (AUDIT), LARGETAXPAYER UNIT, ISLAMABAD and 3 others" (2019 MLD 870) the Court opined that: "18. It would be pertinent to refer to the precedent law expounded by the Supreme Court of India with regard to entertaining constitutional petition when the challenge is against a show-cause notice. It is well settled principle propounded by the Court that ordinarily no writ lies against a show-cause notice. It has been a consistent view of the Court in India that a mere show-cau se notice is not an adverse order and, therefore, the petition invoking jurisdiction against a show-cause notice is considered premature. The rational or reason is discussed in various judgments. It is noted that the authority after hearing the subject and considering the explanation or reply , if satisfied, may drop the proceedings. The only two exceptions to the rule that ordinarily writ will not be issued against a show-cause notice are, (a) when the Court is satisfied that the show-cause notice is totally non est. i.e. want of jurisdiction of the issuing authority and (b) issued malafidely e.g. to merely harass the subject. ....
19. In the light of the settled principles, it may be concluded as follows:--
(i) Show-cause notice is not an adverse order unless it could be clearly shown to the satisfaction of the Court that it has been issued by an authority not vested with jurisdiction or it was issued for mala fide reasons.
(ii) The exception relating to want of jurisdiction does not include every jurisdictional error. A wrong exercise of jurisdiction or interpretation of the law cannot be treated as want of jurisdiction.
(iii) Constitutional jurisdiction is exercised if the Court is satisfied that the person is an 'aggrieved party' within the context of Article 199 of the Constitution and no adequate remedy is provided by law. If adequate statutory remedies are provided under the relevant statute, it is to be taken into consideration while exercising discretion under Article 199 of the Constitution.
(iv) By passing or circumventing statutory forums is to be discouraged.
(v) The approach should be to advance the object and purpose of a statute and every effort made to uphold the sanctity of the legislative intent rather defeating it".
48. In the case of "COLLECT OR OF SALES TAX VS KHURSHID SPINNING MILLS LIMITED & ANOTHER"( 2017 PTD 196 ) [Lahore], the Court held that: "Objection qua jurisdiction is a basic lacuna on assumption of jurisdiction, which can be raised at any stage of proceedings including the appeal inasmuch as it goes to the very root of the matter and renders entire proceedings coram non judice"
Further in the case "ZAVER PETROLEUM CORPORA TION Vs FEDERAL BOARD OF REVENUE & another (2016 PTD 2332 ). It was observed as under: "20.Lastly I shall advert to the question of maintainability of the petition. There is no cavil to the proposition that a mere notice or a show cause notice is not an adverse order and, therefore, a petition under Article 199 of the Constitution would not be competent. The exception to this general rule is a grievance relating to the notice or show cause notice suffering from want of jurisdiction. It has been held by the august Supreme Court in the judgment titled "Commissioner of Income Tax v. Eli Lilly Pakistan (Pvt.) Ltd." [2009 SCMR 1279 ] that the rule barring jurisdiction in the case of exercising powers under Article 199 of the Constitution when a show cause notice has been assailed is not an absolute rule, but rather a rule by which the jurisdiction is regulated. The exercise of jurisdiction in the case of a show cause notice has been held to be justified when the said notice is palpably without jurisdiction and/or issued on the basis of mala fide. Reliance is placed on "Gatron (Industries) Ltd. v.
Government of Pakistan and others" [1999 SCMR 1072 ] and "Murree Brewery Co. Ltd. v. Pakistan through Secretary to GOP , Works and Division and 2 others" [ PLD 1972 SC 279 ].
21. For what has been discussed above, the instant petitions are allowed. The show cause notices are declared as having been issued by persons not vested with power or jurisdiction. Howe ver, it shall be open for the Commissioner or such officer vested with the powers and jurisdiction to adjudicat e under section 11 of the Act of 1990, if he deems necessary , to issue fresh show cause notices".
49. Similarly , in the following long line of cases, referred below , the common thread running through in all of the decisions is that the writ is maintainable against a show cause notice if the same is, inter alia, suffering from want of jurisdiction.
(1) "CHAUDHAR Y SUGAR MILLS LIMITE D VS CHIEF COMMISSIONER & 2 OTHERS" (2016 PTD 527)
[Lahore] "Superior courts have already held that if the liability in the show cause notice is palpably unlawful or show cause notice is ultra vires, without jurisdiction or with mala fide intent, such action is to be nipped in the bud". [Para 13]
(2) "OIL AND GAS DEVELOPMENT COMP ANY LIMITED VS FEDERAL BOARD OF REVENUE AND 2 OTHERS" ( 2016 PTD 1675 ) [Islamabad] "Lastly I shall advert to the question of maintainability of the petition. There is no cavil to the proposition that a mere notice or a show cause notice is not an adverse order and, therefore, a petition under Article 199 of the Constitution would not be competent. The exception to this general rule is a grievance relati ng to the notice or show cause notice suf fering from want of jurisdiction". [Para 20]
(3) "KK OIL AND GHEE MILLS (PRIV ATE) LIMITED VS FEDERAL BOARD OF REVENUE AND OTHERS"
(2016 PTD 2601 ) [Islamabad] "There is no cavil to the proposition that a mere notice or a show cause notic e is not an adverse order and, therefore, a petition under Article 199 of the Constitution would not be competent. The exception to this general rule is a grievance relating to the notice or show cause notice suffering from want of jurisdiction". [Para 13]
(4) "MESSERS J.K. BROTHERS PAKIST AN (PRIV ATE) LIMITED VS THE ADDITIONAL COMMISSIONER INLAND REVENUE AND ANOTHER"( 2016 PTD 461 ) [Lahore] "The objection of the learned counsel for the respondents that the writ petition against impugned show cause notice was not maintainable, is not of much substance. If an act is illegal and facts of the case confirm the said illegality , there is no bar in exercising writ jurisdictio n. Superior courts of the country have already held that if the show cause notice is ultra vires, without jurisdiction or with mala fide intent, such action is to be nipped in the bud. Reference, in this regard, can be made to the case of Mughal-E-Azam Banquet Complex 2011 PTD 2260 and Northern Power Generation Company Ltd. v . Federation of Pakistan and others ( 2015 PTD 2052 )". [Para 8] (5) "COMMISSIONER OF INCOME T AX VS ELI LILL Y PAKIST AN LIMITED & OTHERS" ( 2009 SCMR 1279 )
"The tendency to bypass the remedy provided in the relevant statute and to press into service constitutional jurisdiction of the High Court was to be discouraged, though in certain cases invoki ng of such jurisdiction instead of availing the statutory remedy was justified, e.g. when the impugned order/action was palpably without jurisdiction and/or mala fide. To force an aggrieved person in such a case to approach the forum provided under the relevant statute may not be just and proper . [ Para 56] Once a party opted to invoke the remedies provided for under the relevant statut e, he could not at his sweet will switch over to constitutional jurisdiction of the High Court in the mid of the proceedings in the absence of any compelling and justifiable reason. [Para 56] In the instant cases too, the jurisdiction of the Income Tax authorities to issue the impugned show cause notices was successfully brought under challenge before the High Courts and it was found that the notices were not competently issued in view of the prospective application of the provisions of section 122 of the Ordinance". [ Para 56]
(6) "MUSLIM COMMERCIAL BANK LIMITED VS DEPUTY COMMISSIONER OF INCOME-T AX & OTHERS"
(2004 PTD 1901 ) [Karachi ] "Where the show-cause notice is so patently illegal, void or wanting in jurisdiction that any further recourse to alternative remedy might only be counte rproductive and by invoking Article 199 the mischief could forthwith be nipped in the bud then in such matters existence of alternative remedy would not bar the exercise of Constitutional jurisdiction". [ Para 18, Headnote H]
(7) "AL AHRAM BUILDERS (PRIV ATE) LIMITED VS INCOME T AX TRIBUNAL"( 1993 SCMR 29 )
"The tendency to bypass remedy provided under the relevant statute to press into service constitutional jurisdiction of the High Court has developed lately , which is to be discouraged. However , in certain cases invoking of constitutional jurisdiction of the High Court instead of availing of remedy provided for under the relevant statute may be justified, for example when the impugned order/action is palpably without jurisdiction and/or mala fide. To force an aggrieved person in such a case to approach the forum provided under the relevant statute may not be just and proper". [Para 9]
(8) "MURREE BREWER Y CO LTD VS PAKIST AN THROUGH THE SECRET ARY TO GOVERNMENT OF PAKIST AN WORKS DIVISION AND 2 OTHERS"( PLD 1972 SC 279 )
"The rule that the High Court will not entertain a writ petition when other appropriate remedy is yet available is not a rule of law barring jurisdiction but a rule by which the Court regulates its jurisdict ion. One of the well recognized exceptions to the general rule is a case where an order is attacked on the ground that it was wholly without authority . Where a statutory functionary acts mala fide or in a partial, unjust and oppressive manner , the High Court in the exercise of its writ jurisdiction has power to grant relief to the aggrieved party". [Pg 287 Headnote A]
50. In the case of "OCEAN PAKIST AN LIMITED Versus FEDERAL BOARD OF REVENUE & OTHER" (2012 PTD 1374 ) the Hon'ble Supreme Court while, observing that the reply to show cause notice contained all the objections with regard to application of law i.e. the Ordinance, 1979 or the Ordinance, 2001; the question of liability of the Petitioner , including challenge to the competency of the Additional Commis sioner Inland Revenue to issue show-cause notice, remarked that: "All the legal objections raised in the proceedings by petitioner company , are similarly raised before the competent forum who has issued the show-cause notice, any finding on any of the legal objections by this Court is likely to cause prejudice to the case of the petitioner company before the income tax hierarchy .In view of the facts noted herein above i.e. filing of reply to show-cause notice by the petitioner -company wherein all objections raised before us, noted hereinabove, have been duly raised before the competent forum, and that there is no final determination by the competent authority on the issues involved in the matter , coupled with the fact that the petitioner can raise all possible factual and legal objections before the authority , which has sought its explanation by issuing show-cause notice, we intend to agree with the findings recorded by the learned Single Judge in Chambers of the High Court by means of the impugned judgment; as such this petition is dismissed being devoid of merits".
51. Writ against show cause notice is maintainable in present case because show cause notices have been issued by incompetent authority . The case mentioned (supra) is not applicable to the peculiar set of circumstances in the case in hand. However , the point in mentioning it is to state that all the objections as mentioned above including challenge to the competency of the authority , that issued the show cause notice, could also be raised before the authority issuing the show cause notice.
52. Moving further , it is reiterated that the Courts in the afore referred cases have held that issuance of a show cause notice is itself a complete act and decision which could be subject to judicial review if inter alia, the show cause notice was not lawfully issued by the competent authority , if the issuance of the show cause notice was ultra vires the relevant law and if the issuance of the show cause notice was without jurisdiction or with mala fide .
VII. ANAL YSIS
53. The whys and wherefores lead me to a finale that whether in the case in hand the show cause notice has been issued without jurisdiction and is non est in the eye of law? For that purpose a glance at the jurisdiction order dated 29.07.2016 relied upon by the Respond ents is quintessential in order to see the scope of delegation and the nomenclature of the delegatee. In the present case, it is seen that the show cause notices were issued by the Additional Commissioner , (Audit) Range- 1, Zone-Corporate, Inland Revenue whereas the authority or delegation as per the jurisdiction order was given to the Officer Inland Revenue as could be seen from the below referr ed order: Sr. #Authority Function in relation to which powers are delegatedArea of jurisdiction /class of persons
(1) (2) (3) (4) Officer Inland Revenue assigned the charge of investigation & Prosecution Unit- II Corporate Zone, RTO Multani) Under the Income T ax Ordinance, 2001
(a) Exercise power under section 176 (except in respect of Banks and financial institutions, which is subject to approval of the Commissioner).
(b) Impose penalty under Part X of Chapter-X in respect of cases other than under audit on non- compliance of statutory notices;
(c) Any other power and function Specially assigned/delegated by the Commissioner Inland Revenue (Corporate Zone), R TO, Multan. -----------------Cases as may be specifically assigned by the Commissioner or the Chief Commissioner or the Board.
2 ------------------- ----------------- ---------------
54. This in turn gives rise to two anomalies. Firstly , whether delegation could be made for Section 122 of the Ordinance under Section 210 to an officer below the rank of the Additional Commissioner . Secondly , whether the ingredients constituting a valid delegation were fulfilled in this case? In order to comment upon these vital questions, it is worth mentioning that the nomenclatures of the posts cannot be taken lightly as Section 207 of the Ordinance lays down the structure of the Federal Board of Revenue which is as follows:
(i) Chief Commissioner (Administrative Head)
(ii) Commissioner
(iii) Additional Commissioner
(iv) Deputy Commissioner
(v) Assistant Commissioner
(vi) Officer Inland Revenue
55. At the cost of repetition, it is reiterated that although under Section 210 of the Ordinance the Commissioner can delegate his powers and functions but Section 210 (1A) clarifies that the power in terms of Section 122(5A) regarding amendment of assessment could not be delegated below the rank of the Additional Commissioner . In the present case the authority was given to the Officer Inland Revenue which could not have been done as per the spirit of the Ordinance. Moreover the Jurisdiction Order dated 29.07.2016 does not meet the criteria and the conditions stipulated in the case W.P No. 27535 of 2016 titled Jahangir Tareen Khan vs. Federation of Pakistan etc, mentioned above for constituting a valid delegation as the powers and functions have not been specified particularly with regard to Section 122 of the Ordinance.
56. For the reasons adumbrated above, the writ petition is allowed and the show cause notices dated 22.12.2017 and 3.01.2018 are declared to be without lawful authority and of no legal effect hence totally non est. in the eye of law for absolute want of jurisdiction. A Matter of Interpretation: Federal Courts and the Law - New Edition (The University Center fot the Human Values Series Book 47) Kindle Edition by Justice Antonin Scalia, Judge, Us Supreme Court