SARDAR MUHAMMAD IQBAL, J.-- The business of the petitioner-firm is the repair and construction of bodies of buses and trucks. It submitted statement of accounts for the assessment year 196162 showing receipts from the construction of bodies at Rs, 80,365.00 and from the repairs at Rs, 35,395.00. The gross profit of Rs, 23,239.00 was worked at 20 per cent. The Income-tax Officer found that the assessee had not maintained any order book to show the number of buses and trucks for which the bodies had been constructed ; that no manufacturing account had been maintained to co-relate the consumption of raw material with the construction of bodies of buses and trucks, and that all the purchases were not properly vouched e. g. there were kacha vouchers for certain purchases which made the purchase figures questionable. He further held that all the partners were major and living separately, and the drawings shown by them were extremely low and not enough to meet their personal liabilities. He concluded that the results shown by the assesse could not be accepted, and, therefore, proceeded to estimate receipts from the construction of buses and trucks at Rs, 1,20,000.00 and fixed the gross profit at the rate of 25 per cent. He estimated receipts from repairs at Rs, 60,000.00 and fixed the gross profit at the rate of 40 percent.
2. The petitioner also submitted the return for the assessment year 19 62-63 and showed receipts from the construction of bodies of buses and trucks at Rs, 4,47,420.00, and from repairs at Rs, 2,28,722.00. The gross profit of Rs, 1,08,852.00 was shown at the rate of 16 per cent. The Income-tax Officer was not satisfied with the return and, therefore, required the petitioner to produce evidence on which it relied in support of the return. After having heard the petitioner, the Income-tax Officer held: "The assessee's books of accounts were found to be defective as no order book has been maintained for either construction work or repair work. The assessee has not maintained any manufacturing account either. Purchases were also found to be partly unverifiable . . . . Drawings of the partners were also found to be law . . . . No satisfactory explanation for the low drawings was given. All the partners are living independently and there seems to be no explanation for such low drawings." On these premises the Income-tax Officer refused to accept the return submitted by the petitioner by his order dated the 28th of February 1967 and estimated the receipts on account of the construction of bodies of buses and trucks at Rs, 6,00,000.00 and those on account of repairs at Rs, 4,00,000,00. He fixed the gross profits at the rate of 25 per cent. and 40 per cent. respectively of the two items. The appeals preferred against these orders were disposed of by the Appellate Tribunal by one order passed on the 16th of June 1969. It observed "Before us the appellant could not controvert the defects pointed out by the Income-tax Officer. The appellant's past history also discloses the application of rates of 25% and 40% to the body building and repair works". The Tribunal did not interfere with the estimates arrived at by the Income-tax Officer for the year 1961- 62, but so far as the year 1962-63 was concerned, it fixed the receipts on account of body building at Rs, 4,50,000.00 and on account of repairs at Rs, 2,30,000,00.
It maintained the rates of profits determined by the Income-tax Officer by observing: "The rates of profit, however, need no interference as they are in consonance with the past as well as future treatment given to this case." The petitioner applied under subsection (1) of section 66 of the Income-tax Act to the Income-tax Appellate Tribunal to refer to the High Court the following questions :-- "(1) Whether the assessing authority is entitled in law to work out arbitrarily or otherwise a different rate of profit for a particular business when the similar business carried out in exactly similar circumstances have been assessed at a much lower rate. If so whether the persons assessed at a higher rate can successfully assail an order of such arbitrary imposition of a higher rate of profit on their sales.
(2)Whether a rate of profit once applied on the sales of a business for a particular year or for a few past years leaves no scope for an assessee for challenging the said rate in subsequent years. If not so, whether such an assessee, can plead the justification of lesser rate on the ground of enhanced sales and lesser margin of profit especially when the other similar business carried out on more advantageous circumstances has been assessed at a much lower rate of income on their sales.
(3)Whether the circumstances which justify the discarding, of the book version on the point of 'Building receipts' and `repair-receipts' also authorise the Tribunal to apply the rate of profit at 25 % and 40% respectively on the basis of previous assessment despite reasonable objections from the assessee."
The Appellate Tribunal refused to state the case by observing that the rates of 25 per cent. and 40 per cent. to work out the profits on body building and repairs had been upheld by it on the basis of the past history of the petitioner and that no question of law arose from the finding of the Tribunal.
The petitioner has filed this petition under Article 98 of the Constitution of the Islamic Republic of Pakistan (1962) read with the Provisional Constitution Order, 1969, with the prayer that the orders passed by the Income-tax authorities be declared to have been made without lawful authority, and that they should be directed to apply the rate of profit at 25 per cent. as had been done in the case of another concern, namely, Messrs Mian Brothers & Company.
3. Learned counsel for the respondent-Income-tax authorities contended that the petitioner had an alternative remedy by way of making an application under section 66(2) of the Income-tax Act and it was, therefore, not entitled to challenge the order of the Tribunal by a petition for writ under Article 98 of the Constitution.
4. An assessee objecting to an order passed by the Appellate assistant Commissioner may appeal to the Appellate Tribunal within sixty days of the date on which such an order was communicated to him. The Appellate Tribunal after giving both parties to the appeal an opportunity of being heard passes order under subsection (4) of section 33 and communicates the same to the assessee and the Commissioner. The assessee or the Commissioner of Income-tax, if any one of them feels aggrieved, may proceed under section 66 and within sixty days of the date upon which he is served with notice of the order of the Appellate Tribunal under subsection (4) of section 33, may, by application, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order. The Appellate Tribunal, if it does not reject the application, has to draw up a statement of the case and refer it to the High Court within ninety days of the receipt of such application. If the Appellate Tribunal refuses to state a case on the ground that no question of law arises out of its order, the assessee or the Commissioner, as the case may be, may, within six months from the date on which he is served with notice of the refusal, apply to the High Court, and the latter, if not satisfied of the correctness of the decision; may require the Appellate Tribunal to state the case and to refer it, and on receipt of any such requisition the Appellate Tribunal has to state the case and refer it accordingly. The High Court upon the hearing of any such case decides the question of law and sends a copy of its judgment to the Appellate Tribunal which passes further orders in conformity with the judgment. The reference to the High Court under section 66 is required under section 66.A of the Act to be heard by a Bench of not less than two Judges of the High Court, and a further appeal lies under subsection (2) of section 66-A to the Supreme Court from any judgment of the High Court which it certifies to be a fit case for appeal to the Supreme Court. Thus, the Legislature has left it to the Income-tax authorities to decide, in the first instance, all the questions of fact and of law. An appropriate remedy by way of appeal and reference, including a reference to the High Court on points of law, has been provided in the Act. It was settled as early as in Allen v. Sharp that legislative policy as well as considerations of expediency pointed to the propriety of treating the assessment by the assessing authorities as final and conclusive unless appealed from in the manner pointed out by the statute. Lord Reading L. J. C., reviewed the history of the Income-tax law in the King v. Bloosmbury Income-tax. Commissioners and after referring to Queen v. Commissioners for Special Purposes of the Income-tax held: "The scheme of the Legislature is to entrust the decision of the facts to a tribunal of persons specially selected for the locality reserving always to the individual the right to have the Commissioner's decisions on points of law reviewed by the Courts. The obligation is placed for reasons of expediency upon the persons assessed to appeal to the Commissioners if he wishes to rid himself of an assessment."
There can be little doubt that the Income-tax Act of 1922 must, in view of its elaborate provisions and safeguards, be Interpreted in the light of the principles above set forth as underlying the English Income-tax law. The same view was expressed by the Judicial Committee in Commissioner of Income-tax, West Punjab etc. v. Tribune Trust, Lahore where it was held: "The only remedies open to the tax-payer, whether in regard to appeal against assessment or to claim for refund, are to be found within the four corners of the Act. This view of his rights harmonises with the provision of section 67, to which reference has already been made that, no suit shall be brought in any civil Court to set aside or modify any assessment made under the Act. It is the Act which prescribes both the remedy and the manner in which it may be enforced." A similar view was expressed earlier in Raleigh Investment Co. Ltd. v. Governor-Generalin-Council . The facts of that case were that the assessee instituted a suit for the refund of certain amount which he had paid in pursuance of an assessm ent order of the Income-tax authorities. The basis of his claim was that in the computation of assessable income effect had been given to a provision of the Income-tax Act which was ultra vires the Indian Legislature. It was held by their Lordships of the Privy Council that the suit was not competent. In the context it was observed "that the Income-tax Act, 1922, as it stood at the relevant date, did give the assessee the rights effectively to raise in relation to an1 2 3 4 5 assessm ent made upon him the question whether or not a provision in the Act was ultra vires.
Under section 30, an assessee whose only ground of complaint was that effect had been given in the assessm ent to a provision which he contended was ultra vires might appeal against the assessm ent. If he were dissatisfied with the decision on appeal the details relating to the procedure are immaterial the assessee could ask for a case to be stated on any question of law for the opinion of the High Court and, if his request were refused, he might apply to the High Court for an order requiring a case to be stated and that "effective and appropriate machinery is therefore provided by the Act, itself for the review on grounds of law of any assessment. " The dictum of their Lordships that an assessm ent order cannot be challenged in any Court even if it is made under a provision of the Income-tax Act which is ultra vires was only in respect of the suits which were barred under section 67 of the Act. It can have no reference to writ jurisdiction because this did not exist at that time. It was for the first time on the 2nd of October 1955 when section 223-A was added to the Government of India Act, 1935, that the High Courts were given authority to issue high prerogative writs. The writ jurisdiction thereafter continued in one or the other form and it can now be exercised under Article 98 which provides that a High Court on the application of an aggrieved party may issue a writ if it is satisfied that no other adequate remedy is provided by law. The remedy so provided is by the fundamental law of the country, and cannot be restricted, controlled, curtailed or whittled down except by a provision in the Constitution. The High Court may, therefore, by virtue of Article 98 refuse to entertain or grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable alternative remedy elsewhere. If he has an alternative remedy available to him, he should be required to pursue that remedy and not invoke the special jurisdiction of the High Court to issue a constitutional writ unless there are good grounds therefore the grounds and considerations for the exercise of discretion under Article 98 notwithstanding an alternative remedy by way of appeal may arise where the complained action is taken under a law which is unconstitutional or ultra vires or where there is a complete lack of jurisdiction in the officer or the authority to take the action impugned ; or where the officer or the authority acting has not been vested with the powers under law to take the impugned action. In Kensington Income-tax Commissioners v. Aramayo , affirming the decision in Rex v. Kensington Income-tax Commissioners it was decided that "prohibition" will lie and is an appropriate remedy if the Commissioners acted without jurisdiction. In Reg v. Bolton which was approved in Colonial Bank of Australia v. Willon it was observed that the test of jurisdiction was whether or not the authority in question "had power to enter upon the enquiry, not whether its conclusions in the course of it were true or false". In any such case, it may be futile to pursue the alternative remedy and an aggrieved party may move the High Court under Article 98 for issuing an appropriate writ without his being obliged to wait until those proceedings run their full course.
5. It is not disputed that the Income-tax authorities were competent to pass the impugned orders and also that they were within the scope of the income-tax Act. There being no special circumstance or ground in the present case to invoke the jurisdiction under Article 98, the petitioner should have exhausted his remedies under the Income-tax Act which is a self-contained statute and provides a complete machinery for assessment of tax and obtaining relief in respect of improper orders passed by the Income-tax authorities. If on an application made by the petitioner under section 66(2), the High Court had found that the question of law was involved and that the Tribunal had wrongly refused to refer the case it could direct the Tribunal to make the reference. Their Lordships of the Supreme Court have considered this question in Bashir & Co. v.
Income-tax Officer, Ward and held that a writ petition by an assessee when he could apply for reference under section 66 of the Income-tax Act was not competent. In so holding, it was observed: " . . . as the petitioner had not availed of the special remedy provided in the Income-tax Act under section 66(1), he was not entitled to move the High Court in Writ Jurisdiction. Such a6 7 8 9 10 course not only amounts to bypassing the jurisdiction vested by law in the special Tribunal, but also fails to comply with the requirement of Article 98 as it cannot be said that no other adequate remedy was available to the petitioner". The same view was affirmed in Nagina Dal Factory v.
Income-tax Officer where it was held: "When a statute under which action is taken itself provides remedies, recourse must be had to those remedies first. Direct access to the High Court for relief in writ jurisdiction thus bypassing the special forums, which are created by the special law itself, is not permissible. Article 98, in terms, precludes action under it when other adequate relief is available. In the present case it is not disclosed that the impugned action suffered from lack of jurisdiction for invocation of the writ jurisdiction by the High Court directly without first availing of the other remedies as provided by the special law.
6. The petition, however, cannot succeed on merits either. The impugned order is assailed on the ground that the assessing authority had acted arbitrarily in the case of the petitioner to apply rates of profit different from those which were fixed by it for another concern, namely, Messrs Mian Brothers & Company which carried the same business and in similar circumstances. The identity of the business may be there, but the identity in circumstances has not been established. The Income-tax Officer while deciding the case of the petitioner has pointed out a number of defects which we have detailed at the commencement of this judgment. The petitioner failed to prove to the contrary before the Appellate Tribunal and has not taken exception to the finding even before us. We have perused the order of the Income-tax Officer in the case of Messrs Mian Brothers & Company for the assessm ent year 1961-62 and find that the return filed by them did not suffer from any of the defects which were found in the case of the petitioner. The position of the accounts in both the cases being different, the criterion which the assessing authority was to adopt in fixing the rates of profit could not be the same. The allegation of the petitioner that the assessing authority has acted arbitrarily is unfounded.
7. It was next contended that the authorities had no reasonable basis to fix gross rates of profit on the basis of the previous assessm ents. The petitioner had estimated his profit at 20 % on the basis of the statement of accounts furnished. The Income-tax Officer found as a fact that the accounts were defective. The income, profits and gains of the petitioner, therefore, could not be correctly deduced from the method employed by him. The Income-tax Officer, in the circumstances, had to act under proviso to section 13 which lays down that "if no method of accounting has been regularly employed, or if the method employed is such that, in the opinion of the Income-tax S Officer, the income, profits and gains cannot properly be deduced therefrom, then the computation shall be made upon such basis and in such manner as the Income-tax Officer may determine. " The Income-tax Officer was the sole judge in the matter. The gross profits of the petitioner on body buildings had been estimated at 25% and on repairs at 40% for the previous years. The petitioner had not objected to the said assessment. The Income-tax Officer applied the same profit rates for the assessm ent years in question. His finding as to the rates of profit is not based on surmises or conjectures but on the basis of the profits which were allowed to the assessee in the previous years. He has, in doing so, neither acted against law nor in violation of any provision of the Income-tax Act. The finding is moreover one of fact.
8. We find no merit in this petition which is hereby dismissed with costs. (1848) 2 Ex. 352 (1915) 3 K B 768 (1888) 21 Q B D 313 PLD 1947 P C 247 PLD 1947 P C 19 (1916) 1 A C 21911 1 2 3 4 5 6