ASIM HAFEEZ, J.----Petitioner assails validity of Notice dated 30.09.2020, whereby factum of selection for Audit for the tax period July 2017 to June 2018, by Federal Board of Revenue ("Board") in exercise of powers conferred under Section 72-B of the Sales Tax Act, 1990 ("The Act"), was conveyed. It appears that till the filing of this petition no objection / reply was submitted in response to the notice.
2. Learned counsel contends that petitioner is constrained to file instant petition as Notice in question, wherein petitioner was selected for audit by the Board, was contrary to the mandate of one of the provisos to subsection (2) of section 25 of the Act, which reads as; "Provided also that audit under this section shall be conducted only once in every three years".
3. It is the case of the petitioner that same underwent audit for tax period July, 2015 to June, 2016 -- and audit report was accordingly prepared -- hence, no audit can be conducted before the lapse of three years, thereafter .
Learned counsel relied on the ratio of the decision in the case of "Faisalabad. Electric Supply Company Limited (FESCO) v. The Federation of Pakistan through Secretary Finance, Islam abad and others 2019 PTD 1780 .
4. The controversy hinges on the point that whether ratio in the case of "Faisalabad Electric Supply Company Limited (FESCO) (supra), is attracted in the facts of instant case. Before dwelling on the issue, it is appropriate to highlight glaring distinction between the cue at hand and the one referred. In the instant case selection for audit was consequent to the exercise of authority/power by the Board in terms of section 72-B of the Act. It is expedient to reproduce section 72-B, ibid, which read as; "[72B. Selection for audit by the Board. - (1) The Board may select persons or classes of persons for, audit or tax affairs through computer ballot which may be random or parametric as the Board may deem fit.
(1A) Notwithstanding anything contained in this Act or any other law, for the time being in force the Board shall keep the selection parameters confidential.
(2) Audit of tax affairs of persons select under subsection (1) shall be conducted as per procedure given in section 25 and all the provisions of this Act shall apply accordingly .
(3) For the removal of doubt, it is hereby declared that the Board shall be deemed always to have had the power to select any persons or classes of persons for audit of tax affairs under this section.] [Emphasis supplied]
5. There is no gainsaying that ratio / reasoning of the decision in the case of "Faisalabad Electric Supply Company Limited (FESCO), (supra) is not applicable to this case, wherein, simplicitor , proceedings of audit under section 25 of the Act were under challenges. I do not find any discussion or reason ing therein, holding that powers exercisable by the Board under section 72-B of the Act are subjected to or regula ted by the proviso to subsection
(2) of section 25 of the Act. In terms of subsection (2) of section 72-B, by reference procedure prescribed under section 25 of the Act shall be adopted for conducting the audit, pursuant to the selection by the Board. Subsection
(2) of section 72-B of the Act cannot be construed in a manner to render subsection (1) of section 72-B, of the Act, subservient to proviso to subsection. (2) of section 25 of the Act or to encumber / circumscribe / limit the power of the Board. The use of expression "audit under this section " in proviso to subsection (2) of section 25 of the Act is significant, which limits the applicability and scope of the proviso and affirms independence of section 72-B of the Act. The question of independence/mutually exclusiveness of sections 72-B and 25 of the Act came up for discussion before learned Full Bench of Hon'ble Islamabad High Court Islamabad in the case of A "Pakistan Telecommunication Company Ltd v. Federation of Pakistan" (2017) 15 TAX 27 (HC. Isl:) = (2016 PTD 1484 ).
(paragraph 44 thereof" wherein it was held that 'section 25 and section 72B of the Act are independent of each other'. To support this construction reference is also made to the cases of "Laraib Energy Ltd. through Chief Executive Officer v. Commissioner Inland Revenue (Provincial Taxes) Mirpur Azad Jammu and Kashmir and 5 others" (2015 PTD 165) and "Warid Telecom (Pvt.) Ltd. v. Commissioner Inland Revenue and others"
(2013) 107 Tax 278 (H.C. Isl.) = (PTCL, 2013 CL 331). The case of Pakistan Telecommunicatio n Company Ltd.
(supra) and other decisions referred were handed down before the insertion of proviso to subsection (2) of section 25 of the Act-inserted by Finance Act, 2018 nonetheless question of individuality of each of the sections is acknowledged and iterated.
6. The authority and jurisdiction of the Board under section 72-B of the Act is neither an issue nor disputed.
Additionally , no prejudice, bias or injury would occasion upon mere selection for audit. Reference is made to the dictum laid in the case of "Commissioner Inland Revenue, Sialkot and others v. Messrs Allah Din Steel and Rolling Mills and others" ( 2018 SCMR 1328 ), relevant portion wherefrom is reproduced hereunder: "We have repeatedly held that mere selection for audit does not cause an actionable injury to the taxpayer"
7. In view of the aforesaid I hold that the ratio/reasoning of the decision in the case of "Faisalabad Electric Supply Company Limited (PESCO) (supra) is not attracted and distinguishable - wherein selection of audit under section 72-B of the Act was neither an issue nor deliberated.
8. This petition is incompetent and same is hereby dismissed. It is observed that the petitioner would be at liberty to raise any other objections to the Notice in question other than claiming protection/immunity against selection for audit in wake of proviso to subsection (2) of section 25 of the Act.
No order as to the costs.