MUHAMMAD SAJID MEHMOOD SETHI, J.----This consolidated judgment shall also decide PTR No.401 of 2010, as common questions of law and facts are involved in these cases.
2. Through instant Reference Application under Section 133 of the Income Tax Ordinance, 2001 ("the Ordinance of 2001 "), following questions of law, urged to have arisen out of impugned order dated 06.01.2010, passed by learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore ("Appellate Tribunal "), have been proposed for our opinion:-
1. Whether on the -facts and in the circumstances of the case, the learned ITAT was justified to maintain the order of CIT(A) in which it was held that order under section 221 of the Income Tax Ordinance, 2001 charging WWF was passed after the period of thirty (30) days whereas the legislature has not prescribed any time limitation in the WWF Ordinance, 1971?
2. Whether on the facts and in the circumstances of the case, non-charging of WWF at the time of original assessment was a mistake apparent from record which could be rectified under section 221 of the Income Tax Ordinance, 2001 within prescribed time limit under section 221?
3. Brief facts of the case are that respondent-taxpayer , a private limited company , deriving income from steel re- rolling mills, filed income tax return for tax year 2004, which was treated as assessment order in terms of Section 120 of the Ordinance of 2001. Later on, the Taxation Officer observed that respondent-taxpayer was a manufacturer , thus, liable to pay Workers Welfare Fund ("WWF") under Section 4 of the Workers Welfare Fund Ordinance, 1971. Therefore, a notice under Section 221 was issued to rectify the assessment, which culminated in passing of order-in-original dated 18.09.2008. Feeling aggrieved, respondent-taxpayer filed appeal before CIT (Appeals), which was accepted with the observation that WWF was charged beyond reasonable time of thirty days as held by Hon'ble High Court of Sindh in the case of Commissioner of Income-T ax v. Messrs Kamran Model Factory (2002 PTD 14). Feeling dissatisfied, applicant-departme nt filed appeal before learned Appellate Tribunal, which was dismissed vide order dated 06.01.2010. Hence, instant Reference Application.
4. Learned Legal Advisor for applicant-department contends that learned Appellate Tribunal has erred in appreciating that no time limitation to charge WWF has been provided in WWF Ordinance and even otherwise, non-charging of WWF was not a mistake floating on record, thus, same could not have been rectified by invoking provisions of Section 221 of the Ordinance of 2001.
5. Conversely , learned counsel for respondent-taxpayer defends the impugned order .
6. Arguments heard. Available record perused.
7. The factual matrix of the case is that assessment order pertaining to tax year 2004 was rectified by charging WWF vide order dated 18.09.2008 by the Taxation Officer. However , in appeal, CIT(Appeals) held the order of Taxation Officer unsustainable while taking guidance from the judgment of Hon'ble High Court of Sindh in the case of Messrs Kamran Model Factory supra, whereby interpreting the phrase "as soon thereafter as may be" appearing in original Section 4(4) of WWF Ordinance, the Court observed that the Assessing Officer would have to 2021] Commissioner Inland Revenue v. Kamal Steel Re-Rolling 1399 Mills Limited make an order for levy of WWF within the period of 30-days on his omission to make such an order at the time of framing the assessment.
However , learned Appellate Tribunal upheld the decision of CIT (Appeals) with the observation that amendment brought in Section 4(4) of WWF Ordinance omitting the words "At the time of making an assessment under (the Ordinance), or as soon thereafter as may be" did not authorize the Taxation Officer to apply aforesaid amended provision retrospectively .
8. We have carefully gone through the decisions of learned forums below as well as the proposed questions. In our opinion, the questions referred in Reference Application do not arise out of the order of learned Appellate Tribunal and under the law, only questions arising out of order of learned Appellate Tribunal are to be preferred in Reference Application. This Court would only procee d to hear the Reference Application if it is satisfied that a question of law arises out of the order passed by Appella te Tribunal. As per Section 133(2), Reference Application shall set out the facts, the determination of the Appellate Tribunal and the question of law which arises out of its order . The language of subsections (1), (2) and (3) of Section 133 of the Ordinance of 2001, clearly suggests that questions of law, which may be referred are only those which arise out of the order of Appellate Tribunal: It is now a settled law that only those questions can be raised before the learned High Court which are questions of law and are arising from the order of the Tribunal. Reference can be made to Messrs F.M.Y. Industries Ltd. v. Deputy Commissioner Income Tax and another (2014 SCMR 907), Messrs Squibb Pakistan (Pvt.) Ltd. and another v. Commissioner of Income Tax and another (2017 SCMR 1006 ), Commissioner of Income-T ax/W ealth Tax Companies Zone, Faisalabad v. Messrs Taj Flour Mills (Pvt.) Ltd. (2005 PTD 1142) and Commissioner of Income Tax / Wealth Tax, Zone-C, Lahore v. Messrs Minhas Automotive Industries, Lahore (2005 PTD 2338 ).
9. We are clear in our mind that the proposed questions are misconceived and do not arise from the order of Appellate Tribunal as these were neither mooted upon before it nor ruled upon by Appellate Tribunal. Therefore, in order to decide real issues between the parties, we reframe the following question:- Whether learned Appellate Tribunal was justified in holding that the Taxation Officer was not authorized even under the amended provision of Section 4(4) of WWF to charge WWF by applying the aforesaid provision retrospectively?
For better understanding, the provisions of Section 4(4) of the WWF Ordinance and its impact and effect, before and after amendment brought through the Finance Act, 2008, are reproduced hereunder:- Before Amendment (4). At the time of making an assessmen t under (the Ordinance), or as soon thereafter as may be, the Taxation Officer shall, by order in writing, determine the amount due from industrial establishment under subsection (1), if any, after taking into account the amount paid by the industrial establishment under subsection (3) in respect of the year and the industrial establishment shall pay the amount so determined on or before the date specified in the order ."
After Amendment (4). Taxation Officer shall, by order in writing, determine the amount due from industrial establishment under subsection (1), if any, after taking into account the amount paid by the industrial establishment under subsection (3) in respect of the year and the industrial establishment shall pay the amount so determined on or before the date specified in the order ."
A bare reading of afore-referred provision, both prior and after amendment, clearly suggests that it does not specifically prescribe that it would operate retrospectively .
10. Needless to say that change in subst antive law, which divested and adversely affected the vested rights of the parties should always have prospective application, unless by express word of the legislation and/or by necessary intendment/implication such law had been made applicable retrospectively . Substituted section cannot obliterate accrued rights. It is well-settled now that the Courts lean against giving retrospective operation where no vested rights or past transactions prejudicially affect or exist. A legislation does not operate retrospectively if it touches a right in existence at time of passing of legislation. Rights of parties are to be decided according to law existing when action began unless provision made to contrary . Where statute itself does not make its operation retrospective, it would not be reasonable to claim that by necessary implication it has retrospective operation.
Reference can be made to Nagina Silk Mill, Lyallpur v. The Income Tax Officer, A-Ward Lyallpur and another (PLD 1963 SC 322), Adnan Afzan v. Capt. Sher Afzal (PLD 1969 SC 187), Nabi Ahmed and another v. Home Secretary , Government of West Pakistan, Lahore and 4 others (PLD 1969 SC 599), Province of East Pakistan v. Sharafatullah and 87 others (PLD 1970 SC 514), Sona and another v. The State and others (PLD 1970 SC 264), Hassan and others v. Fancy Foundation (PLD 1975 SC 1), The Collector , Customs and Central Excise, Peshawar and others v. Messrs Rais Khan Limited through Muhammad Hashim (1996 SCMR 83), Malik Gul Hasan and Co. and 5 others v. Allied Bank of Pakistan (1996 SCMR 237), Manzoor Ali and 39 others v. United Bank Limited through President (2005 SCMR 1785 ), Commissioner of Income Tax v. Messrs Eli Lilly Pakistan (Pvt.) Ltd. (2009 PTD 1392 ), Muhammad Tariq Badr and another v. National Bank of Pakistan and others (2013 SCMR 314) and Badshah Gul Wazir v. Government of Khyber Pakhtunkhwa through Chief Secretary and others (2015 SCMR 43 ).
The issue regarding retrospective application of a provision has already been settled by this Court vide judgment dated 01.06.2021, passed in PTR No.292 of 2012 titled Commissioner Inland Revenue v. Messrs Olympia Chemicals Ltd., Lahore.
11. In view of the above, our answer to the issue framed by us is in affirmative i.e. in favour of respondent- taxpayer and against the applicant-department:
12. This Reference Application, along with connected Reference Application, is decided against applicant- department.
13. Office shall send a copy of this judgment under seal of the Court to learned Appellate Tribunal as per Section 133(5) of the Ordinance of 2001.