AAMER FAROOQ J.----This judgment shall decide instant Intra Court Appeal as well as Cross Objections filed by the respondent (Cross Objection No.03-2019), as they both' have arisen out of the same judgment dated 01.03.2019, whereby writ petition filed by the respondent (W .P. No.2349-2017), was partially allowed.
2. The appellant namely Oil and Gas Development Company Limited (OGDCL) floated tenders calling for bids with respect to cementation services as and when required by OGDCL. The first contract was entered into between the parties for Northern side including Khyber Pakhtunkhaw (KPK) and Punjab on 11.03.2013 and second was with respect to Southern side (Sindh and Balochistan) on 21.08.2013. The letters of intent, with respect to both sites, were issued on 12.02.2013 and 24.06.2 013 respectively . It is pertinent to observe that bidding documents and contracts specifically provide that the Nice/consideration for services shall include all taxes. The contracts were renewed time and again. In this behalf, first contract expired on 05.12.2016 and the second on 17.04.2017. 3t about same time, as the contracts were executed or there-after , all the four Provinces of Pakistan enacted laws levying sales tax on services. Since services were being provided by the respondent to OGDCL, hence same was a taxable activity and pursuant to provincial laws, the respondent paid taxes to the provincial revenue authorities and claimed the same in invoices which were duly cleared, however , OGDCL subsequently stopped clearing invoices and resultantly , the claim of the respondent with respect to taxes accumulated to Rs.123,020,066/-.
Eventually , respondent filed a Writ Petitio n (W.P. No.2349-2017) seeking declaration that liability , to pay sales tax on services, was that of OGDCL and also for the recovery of Rs.123,020,066/-. The Judge-in-Chambers allowed the petition to the extent of declaration by holding that liability , to pay taxes under the provincial sales tax on services statutes, was that of OGDCL, however , declined the claim for recovery . The OGDCL has assailed the impugned judgment seeking setting aside of the declaration made by the Judge-in-Chambers in the impugned judgment, whereas respondent is aggrieved of dismissal of its claim qua the recovery .
3. Learned counsel for OGDCL inter alia contended that writ petition, against OGDCL, was not maintainable inasmuch as it is a Company registered under the laws of Pakistan and is not a 'person' carrying on the affairs of the Federation, Province or a Local Authority . It is contended that since the respondent is a 'person', which is registered with all four provincial revenue authorities, hence is a registered person and liability , to pay sales tax on services, is on it under all four provincial statutes. It was contended that unfortunately , the case of the appellant was not put forward properly before the Judge-in-Chambers however , in light of registration certificates issued by all four provincial revenue authorities, since the respondent is a registered person, hence liability , to pay sales tax on services, is on it. It was further contended that writ petition was not maintaina ble in light of arbitration clause between the parties.
4. Learned counsel for the respondent/objector inter alia submitted that the case, presented in appeal by OGDCL, is different from one before the Judge-in-Chambers. It was submitted that this was not the controversy before the Judge-in-Chambers that liability to pay tax is of recipient of the services. It was submitted that the plea, with respect to the recovery , was also turned down erroneously inasmuch as since declaration has already been made that the liability is borne by OGDCL, hence order for recovery ought to have been passed. It was also submitted that OGDCL is a 'person' amenable to writ jurisdiction of this Court. Learned counsel further reiterated that in appeal, a new case cannot be put forward and the documents tendered, are not to be looked into In support of his contentions, learned counsel placed reliance on cases reported as 'Petrosin Corporation (Pvt.) Ltd and 2 others v. Oil and Gas Development Company Limited through Managing Director (2007 CLD 578), 'Nasiruddin Ghor v. Federation of Pakistan through Secretary and 4 others' (2010 PLC 323), 'Mst. Mukhtaran Bibi v.
DPO and others' (2005 MLD 232), 'Federal Government Employees Hous ing Foundation through Director "'General, Islamabad and another v. Muhammad Akram Alizai, Deputy Controller , PBC, Islamabad' (PLD 2002 Supreme Court 1079), 'Punjab Workers' Welfare Board, Government of Punjab and Human Resources Department, Lahore v. Mehr Din' (2007 SCMR 13), 'Haji Muhammad Afzal v. Government of Punjab through Chief Administrator , Auqaf, Lahore and 4 others' (2004 CLC 1723 ), 'Hakim Ali v. Member Power , WAPDA and others' (PLD 2002 Lahore 28), 'Mst. Rubina alias Rubi and 6 others v. Additional District Judge and 3 others' (2018 CLC Note 27) and 'Aziz Uddin Industries Limited' v. Collector of Central Excise and Land Customs, East Zone, Chittagong and others' (PLD 1967 Dacca 58 ).
5. Arguments advanced by learned couns el for the parties have been heard and the documents, placed on record, examined with their able assistance.
6. The controversy between the parties has been stated with brevity in the preceding paragraphs therefore need not be reiterated.
7. Before dealing with the contentions of the parties and discussing the law, it is appropriate that relevant provisions of the contracts be reproduced. In this behalf, clause 5 of the contract dated 11.03.2013 provides for the taxes and duties and is as follows:- "SECTION 5. T AXES AND DUTIES: 5.1 Any taxes, duties, fees, levies and other relevant charges, present or future, assessed or payable outside Pakistan by the Contractor and/or by the expatriate personnel deputed by the Contractor in connection with the Services supplied under the Contract shall be the exclusive responsibility of the Contractor .
5.2 Any taxes, duties, fees, levies and other relevant charges, present or future, assessed or payable in Pakistan by the Contractor and/or by the expatriate personnel deputed by the Contractor in connection with its performance under the Contract shall be the exclusive responsibility of the Contractor .
5.3 The Contractor shall be responsible and pay all taxes on its income outside and in particular on its income in Pakistan under the Contract and under the laws of Pakistan.
5.4 The Company shall have the right, as provided under the laws of Pakistan to meet its obligations and in particular to deduct from the payment due to the Contractor , income tax at source at the rates prevailing from tune to time, from the invoiced amounts, or such reduced rates fixed by the taxation authorities for the Contractor on production of documentary evidence by the Contractor and pay such amount to appropriate authorities.
5.5 The Contractor shall also be responsible for any income taxes levied on the Contractor's expatriate personnel, under the laws of Pakistan and for all social security issuances and other contributions for the Contractor's expatriate personnel regardless of whether such contribution are levied on employer or employee or both in Pakistan.
5.6 The Contractor shall keep the Company duly informed about the steps taken by the Contractor in order to meet its obligations under the Contract and provide the necessary documents to the Company in this connection.
5.7 The Contractor shall indemnify the Company against any claim which might, occur due to non-compliance by Contractor of any legal obligation regarding the taxes, duties, fees, levies, or other charges, including taxes on income in Pakistan and any other payments to the Government or Governmental agencies.
8. Likewise, clause 16 of the contract provides for arbitration between the parties and the clause is as follows:- SECTION 16. ARBITRA TION 16.1 If any technical question, difference or dispute arises under this Contract, the Parties shall use their best efforts to promptly resolve such dispute, controversy or disagreement. However , if the dispute continues, either Party may give written notice to the other for appointment of an expert to resolve the dispute. The expert shall be preferably a Pakistan national and shall have at least ten years of experience in the relevant technical field.
16.2 If any question, difference or dispute arises regarding the rights, obligations or performance by the Parties under this Contract, the Parties shall use their best efforts to promptly resolve such dispute, controversy or disagreement. This includes without limitation the question of whether one or the other is in default and what action if any shall be taken to remedy such default. If the Parties are unable to resolve such questions, difference, dispute and controversy , the matter may be referred to arbitration. Either Party may notify the other in writing specifying the nature of the dispute and designate one arbitrator to whom such dispute shall be referred requesting that the other party give notice in writing within fifteen (15) days after receipt of the notice of designation of the second arbitrator .
The two arbitrators shall within fifteen (15) days after the receipt of notice of the second arbitrator , appoint an umpire whose decision with respect to the dispute shall govern in the event that the arbitrators shall fail to agree. In the event that second arbitrator is not designated within the time specified, the first arbitrator shall have full and complete power to determine the dispute.
16.3 Arbitration shall be precedent in any action of law and that the provisions of the Arbitration Act, 1940 and rules framed thereunder shall apply . The venue of the arbitration shall be in Islamabad, Pakistan.
16.4 The expenses of arbitration shall be charged equally to the Parties unless the award of the arbitrator (s) or the umpire, as the case may be, otherwise provide.
9. Likewise, relevant provisions of the provincial statutes are necessary to be reproduced. In this behalf, relevant provisions of Balochistan Sales T ax on Services Act, 2015, are sections 3 and 9; section 3 reads as follows: - "3. Taxable Service .---(1) Subject to such exclusion as mentioned in Second Schedule, a taxable service is a service listed in Second Schedule, which is provided by a person from his office or place of business in Balochistan in the course of an economic activity , including the commencement or termination of the activity .
Explanation: This subsection deal with services provided by a person regardless whether such services are provided to a resident person or a non-resident person.
(2) If a service listed in Second Schedule is provided to a resident person by a non-resident person in the course of an economic activity , including the comm encement or termination of the activity , it shall be treated as a taxable service.
Explanation: This subsection deals with services provid ed by a non-resident person to a resident person whether or not the end consumers, if any , of such services are identifiable for purposes of this Act or the rules.
(3) For purposes of subsection(2), where a person has a registered office or plan of business in Balochistan and another outside Balochistan, the registered office or place of business in Balochistan and that outside Balochistan shall be treated as separate legal persons.
(4) The Authority may, with prior approval of the Government, by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class of services shall be considered to have been provided by a person from his registered office or place of business in Balochistan.
(5) For purposes of this Act and the rules, providing of service shall, where the context requires, include rendering, supply , initiation, origination, execution, reception. consumption or termination of service whether in whole or in part."
Under section 9(1) ibid, where section 3(1) is applicable, the liability to pay tax is on registered person providing services, whereas where section 3(2) is applicable, the liability to pay tax is on the person receiving the service.
10. Under Khyber Pakhtunkhwa Finance Act, 2013, section 19 reads as follows:-
19. Taxable service.---( 1) A taxable service is a service listed in the Second Schedule to this Act, which is provided:
(a) by a registered person from his registered office or place of business in the Khyber Pakhtunkhwa; in the course of an economic activity , including its commencement or termination of the activity .
Explanation: This sub-section deals with services provided by registered person s, regardless of whether those services are provided to resident persons or non-resident persons.
(2) A service that is not provided by a registered person shall be treated as a taxable service, if the service is listed in the Second Schedule to this Act and-
(a) is provided to a resident person;
(b) by a non-resident person in the cours e of an economic activity , including its commencement or termination of the activity .
Explanation: This subsection deals with services provided by non-resident persons to resident persons.
(3) For the purposes of subsection (2), where a person has a registered office or place of business in the Khyber Pakhtunkhwa and another office outside Khyber Pakhtunkhwa, the registered office or place of business in Khyber Pakhtunkhwa and that outside Khyber Pakhtunkhwa shall be treated as separate legal persons.
(4) The Authority by notification, prescribe regulation for determining the conditions under which a particular service or class of services will be considered to have been provided by a person from his registered office or place of business in the Khyber Pakhtunkhwa.
Under section 27(1) ibid, where section 19(1) is applicable, the liability to pay sales tax on service is on registered person providing the service, whereas where section 19(2) is applicable, the liability to pay tax is on the person receiving the service.
11. Under the Punjab Sales Tax on Servi ces Act, 2012, relevant provision is section 3 read with section 11, which reads as follows:-
3. Taxable service.---( 1) Subject to such exclusion as mentioned in Second Schedule, a taxable service is a service listed in Second Schedule, which is provided by a person from his office or place of business in the Punjab in the course of an economic activity , including the commencement or termination of the activity .
Explanation .- This subsection deals with services provided by a person regardless whether such services are provided to a resident person or a non-resident person.
(2) If a service listed in Second Schedule is provided to a resident person by a non-resident person in the course of an economic activity , including the comm encement or termination of the activity , it shall be treated as a taxable service. Explanation.- This subsection deals with services provided by a non-resident person to a resident person whether or not the end consumers, if any , of such services are identifiable for purposes of this Act or the rules.
(3) For purposes of subsection (2), where a person has a registered office or place of business in the Punjab and another outside the Punjab, the registere d office or place of business in the Punjab and that outside the Punjab shall be treated as separate legal persons.
(4) The Authority may, with prior approval of the Government, by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class of service shall be considered to have been provided by a person from his registered office or place of business in the Punjab.
(5) For purposes of this Act and the rules, providing of service shall, where the context so requires, include rendering, supply , initiation, origination, execution, reception, consumption or termination of a service whether in whole or in part.
(6) The services mentioned in the First Schedule are not exhaustive and all the services mentioned in the Second Schedule, rules and circulars shall be taxable services. Under section 11(1) of the Act, where section 3(1) is applicable, the liability to pay sales tax on services is of registered person providing the service, whereas where section 3(2) applies, the liability to pay tax is of recipient of the service.
12. Likewise, under Sindh Sales Tax on Services Act, 201 1, sections 3 and 9 read as follows: -
3. Taxable Service: (1) A taxable service is a service listed in the Second Schedule to this Act, which is provided:
(a) by a registered person from his registered office or place of business in Sindh;
(b) in the course of an economic activity , including in the commencement or termination of the activity .
Explanation: This subsection deals with services provided by registered person s, regardless of whether those services are provided to resident persons or non-resident persons.
(2) A service that is not provided by a registered person shall be treated as a taxable service if the service is listed in the Second Schedule to this Act and:
(a) is provided to a resident person
(b) by a non-resident person in the cours e of an economic activity; including in the commencement or termination of the activity .
Explanation: This subsection deals with services provided by non-resident persons to resident persons whether or not the said resident person is an end consumer of such services.
(3) For the purposes of subsection (2), where a person has a registered office or place of business in Sindh and another outside Sindh, the registered office or place of business in Sindh and that outside Sindh shall be treated as separate legal persons.
(4) The Board may by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class of services will be considered to have been provided by a person from his registered office or place of business in Sindh.
Under section 9(1) of. Sindh Sales Tax Act, 2011, where section 3(1) applies; liability to pay tax is on registered person providing the service, whereas where section 3(2) is applicable, obligation is on recipient of service.
13. It is pertinent to observe that the provisions of provincial statues are pari materia; except for Khyber Pakhtunkhwa Sales Tax On Services Act; section 3 is the governing section, whereas in the case of Khyber Pakhtunkhwa Sales Tax On Services Act, relevant section is 19. In this behalf, entire controversy hinges upon, whether the respondent is a `registered person' and carries on taxable activity from his office or place of business in the province. If such is the case, the liability to pay sales tax on services is of provider of the services, whereas if the services are rendered by a 'person', who is not based in a province or is a non-resident, the liability to pay tax is of recipient of the services.
14. In writ petition, the respondent in paragraph-7 categorically stated that liability to pay sales tax on services is of recipient of services. The referred paragraph was denied by the appellant in reply but on basis that the liability to pay taxes is of contractor namely the respondent under the terms of the contract; it was never admitted by the appellant that liability to pay is of OGDCL; denial by OGDCL to the corresponding paragraph is specific but on the basis of contracts rather than the law .
15. OGDCL, along with the appeal, appended registration certificates of respondent with all provincial revenue authorities. The detail of registration status of the respondent, with four revenue authorities, is as under: - Sindh Name Date of Registration StatusSprint Oil and Gas Services FZC 02 July , 2014 Active Punjab Sprint Oil and Gas Services FZC Name Date of Registration. Status20th January , 2014 Active KPK Name Date of Registration StatusSprint Oil and Gas Services FZC 13th October , 2014 Active Balochistan Name Date of Registration StatusSprint Oil and Gas Services FZC 19 January , 2016 Inactive since 12-3-2019 The status of the respondent, with the referred revenue authorities, is active except Balochistan where respondent became inactive in 2019. In this view of the matter , the respondent falls within the concept of a `registered person' or a 'person', who is a resident and where such is the case, section 3(1) of three provincial sales tax on services statutes and section 19(1) of Khyber Pakhtunkhwa sales tax on services statue are applicable. In such an eventuality , the liability to pay tax is of service provider .
16. It is an admitted position that OGDCL has put forward new documents, but such documents were never denied by the respondent during course of proceedings and the respondent did not deny that it is not registered with the provincial revenue authorities.
17. Learned counsel for the respondent , during course of arguments, placed reliance on various judgments to substantiate his argument that new document cannot be looked into and new case cannot be pleaded in appeal; there is no cavil with the principles laid down in the judgments cited by learned counsel for the respondent here-in- above, but it is also trite principle that a question of law can be raised at any stage of the proceedings, even in appeal. The question, in the instant appeal, is the applicability of the relevant provisions of the provincial statutes, which interpretation of law, hinges upon the fact whether the respondent is registered with provincial revenue authorities. In support of its stance, OGDCL placed on record relevant documents including registration certificates of respondent with the provincial revenue authorities, which go to the root of the matter in pronouncing declaration as to whether the liability to pay provincial sales tax is on the service provider or the recipient of service.
18. We cannot ignore the documents indicating registration of the respondent with provincial revenue authorities, while determining the liability to pay sales tax on services inasmuch as the referred documents hold the key to issuance of declaration which respondent sought in the writ petition. Moreover , as noted above, the respondent never controverted the documents in question. Admission of registration documents shows that the respondent concealed the fact of registration with provincial revenue authorities approached the Court with unclean hands, and was not entitled to discretionary remedy . Reliance is placed on case reported as 'Muhammad Maqsood Sabir v.
District Returning Officer' (PLD 2009 SC 28). Moreover , the documents appended in appeal for the first time, were for interpretation of law as to the applicability of precise provision of provincia l statutes hence could be looked into. Reliance is placed on case reported as 'Mrs. Zakia Hussain v. Syed Farooq Hussain' (PLD 2020 SC 401).
In view of the fact that the respondent is registered with all four provincial revenue authorities, the obligation to pay sales tax on service, is upon it under section 9(1) of Balochistan Sales Tax on Services Act, 2015; section 9(1) of Sindh Sales Tax on Services Act, 2011; section 11(1) of Punjab Sales Tax on Services Act, 2012 and section 27(1) of Khyber Pakhtunkhwa Sales Tax on Services Act, 2013.
19. The stance of OGDCL that it is not amenable to writ jurisdiction is without substance inasmuch as learned counsel for the respondent placed reliance on various judgments including the judgments reported as Petrosin Corporation (Pvt.) Ltd and 2 others v. Oil and Gas Development Company Limited through Managing Director (2007 CLD 578), Wasiruddin Ghor v. Federation of Pakistan through Secretary and 4 others' (2010 PLC 323) and 'Federal Government Employees Hous ing Foundation through Director General, Islamabad and another v. Muhammad Akram Alizai, Deputy Controller , PBC, Islamab ad' (PLD 2002 Supreme Court 1079) in support of his contention that OGDCL is amenable to writ jurisdiction. In light of the referred case law, a writ petition against the appellant is maintainable.th
20. In so far as the claim of objector/respondent is concerned that it is entitled to recovery of Rs.123,020,066/-, the same is without any force in light of the observations made hereinabove; even-otherwise, the Judge-in-Chambers rightly dismissed the claim, as the same involves obligation under the contract, which matter falls under the arbitration clause in the contracts executed between the parties.
21. For what has been stated above, instant appeal is allowed and the impugned judgment, to the extent of declaration in favour of respondent, is set aside, whereas the cross objections, being without merit, are dismissed; consequently , the writ petition filed by the petitioner , stands dismissed.