AAMER FAROOQ C.J. The present judgment shall decide instant writ petition as well as W.P.
No.4095-2016, as common questions are involved.
2. In W.P. No.3709-2016, the petitioner is a Banking Company incorporated under the laws of Pakistan, whereas petitioners Nos.2 to 4 are its Officers; they are aggrieved of show-cause notices issued by the respondents, wherein recovery has been sought from them on account of penalty imposed; in this behalf, one of the customers of petitioner No.1 namely Air Blue Limited maintained an account with ISE Tower, Jinnah Avenue Branch, Islamabad. With respect to some outstanding dues by Air Blue Limited towards the respondents, notice for recovery was issued on 05.10.2016 on account of obtaining instructions from Air Blue Limited, perhaps no payment was made and the matter got delayed, whereupon, respondents issued notices to petitioners on 05.10.2016 and 07.10.2016, whereby they were asked to show-cause as to why proceedings under section 19(6) of the Federal Excise Act, 2005 may not be initiated against them and penalty in the sum of Rs.1,980,613,400/- be imposed. The referred show-cause notice culminated in Order-in-Original dated 07.10.2016, whereby penalty in the sum of Rs.1,980,613,400/- was imposed on petitioner No.1.
The petitioners challenged above show-cause notices and Order-in-Original through W.P.
No.3709-2016, whereas CEO of petitioner No.1 challenged the impugned order dated 10.10.2016 imposing the penalty through W.P. No.4095-2016.
3. Learned counsel for the petitioners inter cilia contended that respondents have no jurisdiction/authority to impose penalty; in this behalf, it was submitted that nature of penalty is that it is penal in nature and is not fine. It was contended that bare reading of section 19(6) ibid shows that obstruction by any person or officer of the Inland Revenue attracts imprisonment of three years or fine in the sum of Rs.50000/- or five times of duty involved. In this behalf, it was contended that under the procedure provided in the Federal Excise Act, 2005, the trial with respect to any offence committed under the Act of 2005 has to be conducted by a Special Court upon complaint of Income Tax Authorized. Officer. It was submitted that in the facts and circumstances, the imposition of fine/penalty, in the sum mentioned above, is absolutely without lawful authority.
Learned counsel pointed out that an order, which is in excess or absence of jurisdiction could be challenged by way of writ petition despite availability of statutory right of appeal [[1]]. It was further contended that a writ petition against show-cause notice is also available where referred notice is without jurisdiction [[2]]. Learned counsel pointed out that questions of general importance are to be decided by the High Court [[3]]. Learned counsel further contended that where legislature uses two different concepts or expressions, it intends them to have two different meanings [[4]]. It was added that fundamental principle of criminal jurisprudence is that every person should be afforded opportunity of hearing and it is incumbent upon the prosecution to prove the case against the culprit beyond reasonable doubt [[5]].
4. Learned counsel for the respondents vehemently contested the petitions and inter alia submitted that petitioners have statutory remedy of appeal, which they failed to avail, hence instant petitions are not maintainable. It was contended that under the facts and circumstances, respondents have rightly imposed fine in the sum which is five times of the penalty to be imposed.
5. Submissions made by learned counsel for the parties have been heard and the documents, placed on record, examined with their able assistance.
6. The controversy, in hand, has already been mentioned here-in-above, however, it is pertinent to observe that the matter between Air Blue Limited and the respondent Department apparently has been amicably settled, as the former agreed to pay certain amount to the latter.
7. In so far as issuance of show-cause notice and passing of the impugned order against the petitioner is concerned, it is only appropriate to reproduce section 19(6) of Federal Excise Act, 2005, as the petitioners were issued show-cause notice under the said provision. The referred provision is as follows:- "19(6) Any person who obstructs any officer of Inland Revenue or other public servant or any person acting in his aid or assistance, or duly employed for the prevention of offences under this Act or rules made there-under in the execution of his duty or in the due seizing of any goods liable to seizure under this Act or rules made there-under, shall be guilty of an offence and for each such offence, shall be liable to fine which may extend to fifty thousand rupees or five times of the duty involved, whichever is higher and to punishment which may extend to three years or both".
The bare reading of the provision shows that it constitutes an offence to obstruct any Officer of Inland Revenue and that entails imprisonment as well as fine in the sum of Rs.50000 or five times the amount of the duty that is to be levied. Since the allegation on the petitioners is of criminal nature, the matter could have only been adjudicated by way of trial by a Special Judge in terms of section 21 of Federal Excise Act, 2005. In this behalf, subsection (4) of section 21 of the Act provides that a Special Judge is to take cognizance and have jurisdiction to try an offence triable under subsection (1) only upon a complaint in writing made by such officers of Inland Revenue as may be authorized by the Board in this behalf by a general and special order in writing. Subsection (1) of section 21 of the Act stipulates that on the appointment of a Special Judge for any area, an offence punishable under this Act shall be tried exclusively by the Special Judge and all cases pending in any other Court in such area immediately before such appointment shall stand transferred to such Special Judge. In light of the referred provision, it is pretty obvious that the course adopted by respondents Nos.2 to 4 was without lawful authority inasmuch as if at all, respondent No.2 was of the view that petitioners had obstructed the officer of Inland Revenue in the course of recovery, then complaint ought to have been filed before the Special Judge for trial of the matter. Since this course was not adopted, hence issuance of show-cause notice and the order passed thereunder are without lawful authority.
8. Learned counsel for the petitioners has raised a number of arguments to show that the issue, in the instant case, was of criminal nature and had to be dealt with differently, however, I do not feel inclined to address the argument as I believe that road taken by respondents Nos.2 to 4 for passing of the impugned order was not within its jurisdiction or power. Moreover, Air Blue Limited as well as Inland Revenue Department has settled the issue between them and in that eventuality, especially imposing fine, which is in the nature of penalty, seems to be unjustified and uncalled for and is not warranted [[6]] to substantiate the plea that penalties should not readily be imposed.
9. The objection taken to the maintainability of instant petitions by the respondents regarding availability of appeal is without substance in the facts and circumstances in as much as I feel that the order passed was without jurisdiction and in such eventuality, the matter could have been agitated in a petition under Article 199 of the Constitution without availing statutory right of appeal [[7]].
10. It is trite law that a petition under Article 199 of the Constitution is maintainable against show- cause notice which is without jurisdiction or lawful authority [[8]].
11. Since the petitioners have been slapped with criminal liability without adopting course of action as provided in the statute namely Federal Excise Act, 2005 and if such course is allowed as a matter of routine, that will bring chaos and would displace the criminal jurisprudence. The questions raised in these petitions are of paramount importance viz in the presence of proper procedure provided for adjudication of criminal trial, the imposition of fine, in the garb of penalty through an executive order, would amount to highhandedness on part of respondents and is without lawful authority [[9]].
12. For the above reasons, instant petitions are allowed and the impugned show-cause notice as well as Orders-in-Original dated 07.10.2016 and 10.10.2016 are set aside as being without lawful authority.
1. S.A. Haroon v. Collector of Customs (PLD 1959 SC 177), M. Amir Khan v. Controller of Estate Duty (PLD 1961 SC 119), Pakistan v. Qazi Zia ud Din (PLD 1962 SC 440), Nagina Silk Mills v. Income Tax Officer (PLD 1963 SC 322), Murree Brewery v. Pakistan (PLD 1972 SC 279), Premier Cloth Mills v.
Sales Tax Officer (1972 SCMR 257), Town Committee v. Authority under Payment of Wages Act (PLD 2002 SC 452), National Bank of Pakistan v. Sacked Employees Review Board Establishment Division (2019 PLC (C. S.) 1516), Kinza Anwar v. Office of the Ombudsman for Protection against Harassment of Women at Workplace (2022 CLC 1477) and Hydri Ship Breaking Industries v.
Sindh Government (2007 MLD 770).
2. Usmanla Glass Sheet v. Sales Tax Officer (1971 PTD 1), Murree Brewery Co. Ltd. v. Pakistan (PLD 1972 SC 279), Edulji Dinshaw Ltd. v. Income Tax Officer (1990 PTD 1155), Commissioner of Income Tax v. Eli Lilly Pakistan (Pvt.) Ltd. (2009 SCMR 1279), Oil and Gas Company v. FBR (2016 PTD 1675). Dowell Schlumberger (Western) SA v. Pakistan (W.P. No.1486 of 2016) and KPK Exploration Limited v. Federal Board of Revenue (2021 PTD 1644).
3. Shahnawaz (Pvt.) Ltd. v. Pakistan (2011 PTD 1558), Engro Vopak Terminal Ltd. v. Pakistan (2012 PTD 130) and Association of Builders and Developers of Pakistan (2018 P7D 1487)
4. State v. Zia Ur Rehman (PLD 1973 SC 49), Maula Dad Khan v. West Pakistan Council (PLD 1975 SC 469) and Pakistan Fisheries Ltd. v. United Bank Limited (PLD 1993 SC 109)
5. Amba Lal v, Union of India (AIR 1961 SC 264) and Manicklal Stn v, Additional Collector of Customs (AIR 1965 Cal. 527)
6. Commissioner of Income Tax v. Aasia Film Artist (2001 PTD 678)
7. S.A. Haroon v. Collector of Customs (PLD 1959 SC 177), M. Amir Khan v.Controller of Estate Duty (PLD 1961 SC 119), Pakistan v. Qazi Zia ud Din (PLD 1962 SC 440), Nagina Silk Mills v. Income Tax Officer (PLD 1963 SC 322), Murree Brewery v. Pakistan (PLD 1972 SC 279), Premier Cloth Mills v, Sales Tax Officer (1972 SCMR 257), Town Committee v Authority under Payment of Wages Act (PLD 2002 SC 452), National Bank of Pakistan v. Sacked Employees Review Board Establishment Division (2019 PLC (C.S.) 1516), Kinza Anwar v. Office of the Ombudsman of Protection against Harassment of Women at Workplace (2022 CLC 1477) and Hydri Ship Breaking Industries v.
Sindh Government (2007 MLD 770).
8. Ussmania Glass Sheet v. Sales Tax Officer (1971 P7D 1), Murree Brewery Co. Ltd. v. Pakistan (PLD 1972 SC 279), Edulji Dinshaw Ltd. v. Income Tax Of (1990 PTD 155), Commissioner of Income Tax v. Eli Lilly Pakistan (Pvt.) Ltd. (2009 SCMR 1279), Oil and Gas Company v. FBR (2016 PTD 1675), Dowell Schlumberger (Western) SA v. Pakistan (W. P. No.1486 of 2016) and Khyber Pakhtunkhwa Exploration Limited v. Federal Board of Revenue (2021 PTD 1644).
9. Shahnawaz (Pvt.) Ltd. v. Pakistan (2011 PTD 1558), Engro Vopak Terminal v. Pakistan (2012 PTD 130) and Association of Builders and Developers of Pakistan (2018 PTD 1487).