Instant Larger Bench is constituted under the orders of Hon'ble Chief Justice, in the backdrop of 'order of referral' dated 03.12.2024. Context is explained by reproducing the operative part of the order, which reads as, "We have noted that the moot point previously has been dealt with by different learned Division Benches in S.T.R No.36731/2024 and S.T.R No.34742/2024, wherein one Division Bench held that right of appeal/reference application stands crystallized on the date when show cause notice is issued and the order-in-original is passed. On the contrary, the view of other learned Division Bench is that such right would ensue from the date of passing of the impugned order under challenge in appeal. Leaving aside other questions arising from the above noted amendment in the Sales Tax Act, 1990 to this effect, there is apparent disparity in both the view mentioned hereinabove.
3. In order to reconcile this legal proposition, we deem it apt to direct the Office to place this matter before the Hon'ble Chief Justice for constitution of a larger Bench".
2. Background of the reasoning for fixation of these reference applications, details whereof are provided in accompanying Annex-A, before this Larger Bench could be traced to the promulgation of the Tax Laws (Amendment) Act, 2024, ("Amendment Act"). Before introduction of the Amendment Act, remedy of preferring appeal, inter alia against the order of Commissioner (Appeals), was available with the Appellate Tribunal Inland Revenue (Appellate Tribunal), accordingly in terms of section 46 of the Sales Tax Act 1990 ("Act 1990") and section 131 of the Income Tax Ordinance 2001, ("Ordinance 2001"). And after the Amendment Act, remedy by way of reference application, against the order of Commissioner (Appeals), is made available before the High Court(s), subject to the pecuniary limits prescribed respectively in the context of the Act 1990 and Ordinance 2001. In essence, the Amendment Act had the effect of abolishing, previously available remedy of appeal before the Appellate Tribunal, against the order of the Commissioner (Appeals), which curtailment led to surfacing of controversy at hand; which is whether the remedy of appeal, available at the time of commencement of the lis - [either upon issuance of show cause, adjudication thereupon or upon passing of order-in-original as the case may be] - could be abolished through legislative instrument, before the lis concludes, and if the Amendment Act is so interpreted, what would be the effective date for the purposes of filing of reference application or for that matter what would be the date of commencement of the Amendment Act.
In this backdrop different Benches had expressed divergent opinions / decisions and order of referral was made. Reconciliation of divergent opinions and determination of the date of the commencement of the Amendment Act is the scope of this Larger Bench.
3. It is pertinent to mention that divergent opinions were expressed in cases coming before different Benches before clarity is brought by the legislature through insertion of Explanation to section 133 of the Ordinance 2001 through promulgation of the Finance Act 2024, which explanation reads as, "Explanation.- For the removal of doubt it is clarified that reference against order of the Commissioner (Appeals), communicated after the date of commencement of the Tax Laws (Amendment) Act, 2024 (V of 2024), shall lie before the High Court notwithstanding the proceedings pending prior to the date of commencement of the said Act"
[Emphasis supplied]
4. We heard learned counsel on both sides of the aisle and found unanimity, a rare phenomenon otherwise, qua the issue of determination of the date of commencement of the Amendment Act, for the purposes of filing of instant reference applications and maintainability thereof.
5. There is no cavil that remedy of appeal, being a substantial-cum-vested right, when available at the commencement of the lis, would continue to be available throughout the career of the litigation, till same is concluded upon exhausting the remedies available in the statute, at the commencement of the lis or during its pendency, unless the amending or repealing act, as the case may be, either expressly or by necessary implication / intendment curtails remedy of appeal.
In this case no effort is required for ascertaining status of availability or otherwise of the remedy of appeal by necessary implication / intendment, when the Explanation inserted through Finance Act 2024 sufficiently addresses the question, conspicuously clear and explicitly. Reference is made to the ratio settled in the cases of Muhammad Ishaq V. The State [PLD 1956 Supreme Court (Pak.)
256] and Idrees Ahmad and others V. Hafiz Fida Ahmad Khan and 4 others (PLD 1985 Suprem e Court 376).
6. Controversy summed up: In terms of the Explanation to section 133 of the Ordinance 2001, remedy of filing of reference application, subject to the limits of pecuniary jurisdiction prescribed, is available against the order of the Commissioner (Appeals) communicated after the date of commencement of the Amendment Act, notwithstanding pendency of the proceedings before the Commissioner (Appeals), prior to the commencement of the Amendment Act. And for the purposes of present controversy the Amendment Act shall commence from the date of commencement of the Amendment Act, when assent was extended by the President, which was 3rd of May 2024. Issues stand settled. It is pertinent to mention that determination qua date of commencement of the Amendment Act and issue of availability of remedy of reference application is also valid for the purposes of remedy in terms of section 47 of the Act 1990, for the reason that sub-section (2) of section 47 of the Act 1990, makes application of the provisions of section 133 of the Ordinance 2001 and rules made thereunder, mutatis mutandis, to the reference application under the Act 1990. It is noted that determination of the issue through this order is without prejudice to the individual grievances of the applicants, which may be raised in the context of their respective reference application(s) and facts involved.
7. In view of the aforesaid, matter referred to us is settled in terms of findings / observations in preceding paragraph. Hence, Reference applications, listed in Annex-A, shall be placed before respective Division Benches, assigned with the task of hearing tax Reference Application(s).