' These two writ petitions i.e. Writ No. 7 of 1984 and 8 of -1984 have been directed against the Recovery certificates No. 9419, dated 14-12-1981 and No. 8341, dated 29-11-1981 whereby the petitioner was asked to pay the Income-tax imposed upon him including the additional tax upto dates mentioned in the said Recovery certificates. The Deputy Commissioner, Mirpur to whom these Certificates were sent started the proceedings for the recovery of Rs.3,586 including the penalty upto 24-11-1981 in the Writ No. 7 of 1984 and Rs.18,391 including penalty upto 29-11-1981, in Writ Petition No. 8 of 1984.
2. Both the Writ Petitions have got some common law points, therefore, both the Writ Petitions are being disposed of by this single order.
3. As far as the the Writ Petition No. 7/1984 is concerned, through this writ petition, the validity of Recovery Certificate No. 9491, dated 24-12-1981 is challenged. This Recovery Certificate is Annexure Ill attached with the writ petition and reads as under:- ' Certificate under section 45(2) of Income-tax Act, 1922 as adapted in Azad Government of the State of Jammu and Kashmir.
No. 9419/Tax/GIR, dated 24-12-1981.
' The Deputy Commissioner, Mirpur District.
This is to ,certify that the sum of Rs. 3,586 in words -" Ls' L ) which is due from A,- son of................................................ residence is of I.A-on account of Income-tax and penalty is in arrear.
With reference to the provisions of subsection (2) of section 16 of the Income-tax Act, 1922 you are hereby requested to recover the same as if it were an arrear of land revenue:- {{TABLE}} Year DC No. Date Total A/T Total 1963-64 308 31-7-1966 165 242 407 1964-65 348 31-7-1968 245 327 572 1965-66 - 31-7-1966 305 431 736 1966-67 464 30-6-1967 365 481 844 1967-68 435 30-6-1968 445 582 1,027 3,558 Sd/- Income-tax Officer, Mirpur
4. As far as the Writ Petition No. 8 of 1984 is concerned, the certificate reads as under:- Certificate under section 45(2) of Income-tax Act, 1922 as adapted in Azad Government of the State of Jammu and Kashmir.
No. 8341-Tax/GIR, dated 29-11-1981.
The Deputy Commissioner, Mirpur, District Mirpur.
This is to certify that the sum of Rs.18,391 in words oft:d1 which is due from Ly---? son of............................................ residence is of.................................
'..... on account of Income-tax and penalty is in arrear. With reference to the provisions of subsection (2) of section 16 of the Income-tax Act, 1922 you are hereby requested to recover the same as if it were an arrear of land revenue:- [TABLE] Year DC No: Date I.Tax S/C P.O. A/T Total 1962-63 338 31-7-1966 - - - 17 17 1963-64 309 31-7-1966 228 - - 3,371 5,652 1965-66 183 31-12-1966 756 - - 1,084 1,840 1966-67 437 30-6-1967 552 727 1,279 1967-68 457 30-7-1968 2,958 - - 3,899 6,857 1968-69 51 30-11-1972 154 - 147 30 1969-70 52 30-11-1972 84 88 173 1970-71 537 30-6-1976 1,350 922 2,272 18,391 Sd.
Income-tax Officer, Mirpur.
5. The Writ Petition No. 7/84 arises out of the following facts:-
(a) That the father of the petitioner Syed Badi-uz-Zaman died in England on 6-2-1979. The deceased was running a business of Petrol Pump in the Old Mirpur Town. The respondent No. 1 (Income-tax Officer) passed an assessment order under section 23 (4) of the Income-tax Act of 1922 for the assessm ent years 1963-64 to 1967-68 during the lifetime of the deceased Syed Badi- uz-Zaman;
(h) That the Income-tax imposed was Rs. 1,525 but the additional tax rose to Rs. 2,061 upto 24-12- 1961 (the date of issuance of the Recovery Certificate No. 8419 (impugned order) and the recovery was to be made through the Deputy Comissioner, Mirpur from Syed Badi-uz-Zaman deceased, through his son, the petitioner;
(c) When the petitioner came to know on 30-9-1982 about the Recovery Certificate No. 9419, he filed a revision petition against that order of the Income-tax Officer before the learned Commissioner Income-tax who rejected the revision petition on the main ground that it was hopelessly time-barred. The order of the learned Commissioner Income-tax was passed on 20-11- 1983;
(d) As there was no legal remedy available under law against the said revision petition, hence the Writ Petition No. 7 was filed on 7-2-1984 after about two months and seventeen days;
(e) That the revision petition was filed before the learned Commis sioner Income-tax within 90 days under section 138(c) of the Income-tax Ordinance of 1979 which was adapted by the Azad Jammu and Kashmir Government in 1979. The section 138(c) of the said Ordinance corresponds to section 33-A of the Old Income-tax Act of 1922. The contention of the learned counsel for the petitioner is that the order of the Income-tax Officer was not appealable, hence he filed a revision petition before the learned Commissioner Income-tax.
6. As far as the Writ Petition No. 8/1984 is concerned, the assessee in this case was also M/s. Abbass Bus Service, Mirpur. The assessm ent years in this case are 1962-63 to 1967-68. The business for which the Income-tax was imposed in this case was run by "Abbass Bus Service" which appears to be an Association of Persons (A.O.P.) and was running a Transport Business. The Income-tax Officer made assessm ent of Income-tax for 10 years which are Annexures II/10 in this case. The Recovery Certificate No. 8341, dated 29-11-1981 was issued by the Income-tax Officer-respondent No. 1 to the Deputy Commissioner, Mirpur for the recovery of Rs. 18,391 in which the Income-tax was Rs. 6,547 but the additional tax was Rs. 11,844. In this Recovery Certificate, the defaulter was mentioned as Abbass Bus Service and no Certificate was issued to any individual person or to the individual persons who were running the Transport Business. The certificate was issued under section 46(2) of the Income-tax Act of 1922. Section 94 of the Income-tax Ordinance of 1979 the Certificate to the Collector of the District.
' The Annexure 11/10 has got a "depreciation chart" which shows that the following 21 Buses were being plied by the said A.O.P.:- AJK 820, AJK 694, AJK 695, AJK 697, AJK 702, AJK 704, AJK 708, AJK 715, AJK 720, AJK 721, AJK 843, AJK 1012, AJK 1010, AJK 1046, AJK 1054, AJK 1131, AJK 1132, AJK 1133, AJK 1134, AJK 1167 and AJK 1186.
' It appears that the owner of these 21 buses had formed an Association of Persons known as Abbass Bus Service.
7. The legal heirs of the deceased assessee Syed Badi-uz-Zaman are mentioned Annexure R/C provided by the respondent No. 1 Income-tax Officer/Commissioner wherein the following persons appear to be the legal heirs of the deceased Syed Badi-uz-Zaman Shah who was said to be running the Business:-
(1) Mst. Iqbal Begum (now deceased).
(2) Mst. Khurhsid Begum 'Widows of Syed Badi-uz-Zaman.
(3) Surraya Begum.
(4) Sahujhat All Shah (son of the deceased).
(5) Saeeda Riaz Akhtar (deceased daughter of Syed Badi-uz-Zaman Shah. Riaz Akhtar has got two heirs: Syed Iftikhar Hussain Kazmi (her husband) and (2) Syed Murtaza Haider (her son).
8. It appears that Mst. Khurhsid Begum and Mst. Surraya Begum are the widows of the late Syed Badi-uz-Zaman Shah and they are not on good terms with the petitioner due to the fact that perhaps they are his stepmothers.
9. Now I would like to revert to the Writ Petition No. 7 of 1984.
This Writ Petition assails the Recovery Certificate regarding the Income-tax and the additional Tax levied on the business of the Petrol Pump of the Old Mirpur Town. Income-tax in this case was assessed to the tune of Rs. 1,525 but the additional Tax rose to Rs.2,061 upto 24-12-1981.
10. The learned counsel for the petitioner Ch. Muhammad Afzal, Advocate, has impeached the issuance of the Recovery Certificate No. 9419 on the following grounds:-
(a) That the impugned Certificate was passed against a dead person and hence it was a nullity in the eye of law, and therafter, it cannot be enforced or implemented;
(b) That the Recovery Certificate was issued by the Income-tax Officer to the Deputy Commissioner, Mirpur against law because under section 46(2) of the Income-tax Act of 1922, section 94 of the Income-tax Ordinance of 1979, the Deputy Commissioner figures nowhere;
(c) That the impugned Certificate which should have been addressed to the District Collector, Mirpur under law has got no value, whatsoever;
(d) That under law, all the legal representatives of the original assessee should have been brought on the record and the "Demand Notice" under section 29 of the Old Income-tax Act of 1922. Section 85 of the Income-tax Ordinance of 1979 should have been issued and served upon those legal representatives before the issuance of the impugned Recovery Certificate. He has referred to the following authorities from the Indian Jurisdiction on this point:- 1963 I.T.R. 55 (Mysore High Court); 1963 I.T.R. 99 (Kerala High Court) and 1968 I.T.R. 401 (Madras High Court).
' The learned counsel for the petitioner has submitted that according to the above-mentioned authorities, no Recovery Certificate can be issued until and unless a "Demand Notice" is first issued to the legal heirs of a deceased assessee and hence the legal heirs are not liable to pay for more than their share which they inherit from the deceased. Moreover, the said Certificate cannot be issued for more than the liability of a legal heir.
' The following authorities were cited from the Pakistan jurisdiction: (i) 1970 SCMR 226(229) A (Demand Notice is a must).
(ii) 1980 PTD 26 (Sind High Court Karachi) (Default in payment of Tax whether accrues only after a notice of Demand is issued to an assesse-held-yes);
(iii) 1981 SCMR 1192 (Supreme Court of Pakistan under section 24-B, subsection (3) read with section 29 of the Income-tax Act of 1922, the recovery of the Income-tax from the successors of the deceased without Demand Notice was held illegal);
(iv) That the "Additional Tax" is a Tax on Tax which is ultra vires under 3rd Schedule of the Interim Constitution Act of 1974 (refer page-54-Item No. 42 which reads "Taxes on income other than agricultural income". The precise argument of the learned counsel for the petitioner is that the Tax on Income cannot be levied even by the Azad Jammu and Kashmir Council which is competent to legislate on the Income-tax. This "Additional Tax" is actually "A Tax on the Income-tax" and hence it is actually unconstitu tional. In other words, the provisions of section 45-A of the Income-tax Act of 1922, section 89 of the Income-tax Ordinance of 1979 which empower the Income-tax Officer to impose additional Tax on Tax, are in conflict which Schedule III, Item No. 42 of the Azad Jammu and Kashmir Interim Constitution Act of 1974. The following authorities have been cited by the learned counsel for the petitioner:-
(i) 1959 P.T.D. 605 (Dacca High Court);
(ii) Unreported case of the Supreme Court of A J & K M/s. Zia Younis Forest Company and others v. Income-tax Officer and others Civil Petition for Leave to Appeal No. 36 of 1982 whereby the question of the imposition of a tax under section 145-A of the Old Act and under section 89 of the New Ordinance was held to be a question of Public Importance and of first impression in the Supreme Court, and therefore, the leave was granted in that case. The leave was granted on 3-11-1982 by the Supreme Court of Azad Jammu and Kashmir;
(v) That the liability of a legal heir in no case exceeds more than the property he inherits from the deceased, if any. Reference was made in this connection to section 24-B of the Old Income-tax Act of 1922 which corresponds to section 74(4) of the Income-tax Ordinance of 1979;
(vi) That the petitioner has already paid up Rs. 1,18,250 as the liability of the deceased, therefore, his blood should not be further squeezed by any Shylock. The affidavit of the petitioner dated 7-2-1984 attached with the Writ Petition was referred to by the learned counsel for the petitioner in this case.
This affidavit was filed in the High Court and is said not to have been controverted from the other side. The details of this payment are given in Annxure IV which is on the Revision file No. C.I.T.
13/1982. The legal heirs of the deceased assessee of Syed Badi-uz-Zaman Shah are mentioned in Annexure R/C, already referred to above.
11. Replying to the point whether there is an alternate remedy. Ch. Muhammad Afzal Advocate has referred to me section 30 of the Income-tax Act of 1922 = Section 129 of the Income-tax Ordinance of The appealable orders are mentioned in this section. The impugned order does not fall under this section, and, therefore, the learned counsel for the petitioner has submitted that he filed a Revision Petition before the learned Commissioner Income-tax and when the learned Commissioner Income-tax rejected the said revision petition, there was no other remedy available to him, and therefore, he knocked at the doors of the High Court and invoked its constitutional jurisdiction under section 44 of the Azad Jammu and Kashmir Interim Constitution Act of 1974.
12. Replying to another preliminary point raised by Mr. B.A. Sheikh, the learned counsel for the respondents, Ch. Muhammad Afzal, the learned counsel for the petitioners has submitted that the warrants of arrest were issued by the Tehsildar under the Land Revenue Act and this fact is mentioned in para. 6 of his Writ Petition itself. As the Writ Petition is supported by an affidavit which stands uncontroverted from the other side, therefore, he submitted that it is wrong to say that he was guilty of acquiescence in the light of the threat of arrest, the petitioner paid Rs. 1,525 as the original Income-tax on 10-2-1984.
13. When the learned counsel for the parties were put a question from the Court as to whether the Supreme Court of Pakistan has decided the conflict of opinion between two High Courts as regards to the validity or otherwise of the imposition of additional tax whether it is constitutional or unconstitutional the learned Advocates for the parties submitted that the Supreme Court of Pakistan had not decided the controversy as yet. I have been informed by both the learned counsel for the parties that both the Supreme Court of Pakistan and the Azad Jammu and Kashmir Supreme Court have not decided as to whether the imposition of additional tax was constitutional or unconstitutional and that an appeal was sub judice before one Supreme Court.
14. Now I come to the Writ Petition No. 8 of 1984 in which the Recovery Certificate No. 8341 was issued by the Income-tax Officer on 29-11-1981, whereby the respondent No. 1 required the Deputy Commissioner, Mirpur to recover Rs. 18,391 (Income-tax was Rs. 6,547 and the additional tax was Rs.
11,844). The defaulter here was "Abbass Bus Service". The learned counsel for the petitioner in this case has raised the main points which he raised in the Wirt Petition No. 7 of 1984 and the following additional points were argued before me:-
(a) That no Certificate was issued to any individual person or against the members of the Abbass Bus Service who had formed the Association of Persons for transport purposes. He has referred to section 46(2) of the Income-tax Act of 1922 which reads as follows: - "The Income-tax Officer may forward to the Collector of the District in which the Office of the Income-tax Officer is situated or the District in which the assessee resides, or owns property or carries on business or profession, a certificate under his signature specifying the amount of arrears due from an assessee, and the Collector, on receipt of such certificate, shall proceed to recover from such assessee the amount specified therein as if it were an arrear of land revenue: ' Provided that without prejudice to any other powers of the Collector in this behalf, he shall for the purpose of recovering the said amount have the powers which under the Code of Civil Procedure, 1908, a civil Court has for the purpose of the recovery of an amount due under a decree.
(2-A) The Income-tax Officer may, at any time, recall from a Collector a certificate forwarded to him under subsection (2) and, upon a certificate being so recalled, all proceedings commenced in pursuance thereof shall abate: ' Provided that the recall of a certificate shall not affect any recoveries made by the Collector before its recall as if the certificate hat not, to the extent of such recovery, been recalled nor shall the recall of a certificate issued at any time, including a certificate issued before the first day of July, 1967, prevent the recovery, by the issue of a fresh certificate, of any amount which was recoverable at the time the cartificate so recalled was issued."
' The word "assessee" is defined in section 2(2) of the Income-tax Act of 1922 which reads as follows:- "Assessee" means a person by whom income-tax or any other sum of money is payable under this Act, and includes every person in respect of whom any proceeding under this Act, has been taken for the assessm ent of his income or of the loss sustained by him or of the amount of refund due to him and every person who is required to file a return of income under section 22."
' Therefore, all the owners of 21 buses should have been issued first "Demand Notices" and then the "Recovery Certificates" should have followed:-
(b) That the Demand Notices and the Recovery Certificate should have been issued to the legal heirs of the concerned Bus Owner or Owners who has/have died;
(c) That the assessee petitioner had paid up the basic income-tax of Rs. 6,845 under the threat of auction of his property on 10-2-1984 (Annexure 7/2), hence there was not lathes, delay or waiver on the part of the petitioner. There was no alternate remedy as he had already exhausted all the available remedies under law. For instance, the petitioner filed a revision petition against the Recovery Certificate issued on 29-11-1981 to the Commissioner Income-tax on 22-6-1982 when he came to know about the said Recovery Certificate through the Tehsildar concerned on 30-5-1982.
The learned Commissioner Income-tax rejected the revision petition on the ground that the said revision petition was filed after "eleven years" and was hopelessly time-barred. The learned counsel for the petitioner submitted that revision petition was rejected on 20-11-1983 and the writ petition was filed by the petitioner on 7-2-1984. Another notice for recovery of the arrears was issued under No. 3785-90/82, dated 19-6-1982 to Mst. Surraya Begum;
(d) That the issuance of Recovery Certificate for Income-tax of 5 years from the assessment years 1962-63 to 1966-67 was made against the deceased individually and afterwards, for the rest 4 years starting from 1967-68 to 1970-71 the assessment was made against the Association of Persons (A.O.P) which is known as Abbass Bus Service without any justification on law and facts;
(e) That during the year 1967-68, the petitioner Ghulam Abbass Shah had no Bus at all. During the three assessm ent years of 1968-69 to 1970-71, the petitioner had only one Bus No. A.J.K.
1285. Therefore, this aspect of the case was not considered by the Income-tax Commissioner, hence the impugned certificate is illegal and based on no evidence at all;
(f) That the Association known as Abbass Bus Service was dissolved in the year 1972-73 and thereafter the business of this Association came to an end. This fact has not been denied by the non-petitioners;
(g) That 21 buses, the details whereof have been given in a document referred to above were owned by the deceased during the two assessment years; 1964-65 and 1965-66 only;
(h) That all the grounds taken up and agitated by the petitioner before the learned Commissioner Income-tax were not discussed and decided by him, therefore, he has refused to exercise the legal jurisdiction vested in him. In this respect, reference was made to the following authorities:-
(i) M/s. Ch. Abdul Karim son of Karim Ellahi, Bangtal Hotel Mirpur v. Commissioner Income-tax decided by the High Court of AJ&K on 12-2-1983;
(ii) The United Builders v. Commissioner Income-tax 1984 PTD 137 this objection appears in para. No. 7 of the writ petition before us;
15. The learned Counsel for the petitioner has prayed that accepting both the Writ Petitions, the impugned certificates should be quashed being illegal and issued without legal authority.
16. On the other hand, Mr. B.A. Sheikh, the learned counsel for the respondents has raised the following preliminary points in both the petitioners: -
(i) That both the writ petitioners are badly hit by laches;
(ii) That adequate remedy had not been availed of by the petitioner in both the cases;
(iii) That the part payment of the Income-tax has been made without any protest;
(iv) That the petitioner came to the Court with sullied hands as he has suppressed certain material facts.
17. Mr. Basharat Ahmed Sheikh, the learned counsel for the respondents, while discussing the Writ No. 7 of 1984 has submitted the following points : - ( a ) That the Recovery Certificate is perfectly valid in law as it was issued under section 64(2) of the Old Income-tax Act of 1922 which corresponds to section 94 of the Income-tax Ordinance of 1979;
(b) That the Recovery Certificate issued under section 46(2) of the Old Act = Section 94 of the said Ordinance is appealable by virtue of section 30 of the Old Act which corresponds to section 29 of the New Ordinance. As no appeal was preferred against the Recovery Certificate, hence no Writ lies;
(c) That it is written in the judgment of the Commissioner Income-tax No. Tax CIT/4949/83, dated 20-11-1983 that similarly there are two applications from the petitioner placed on the file dated 16- 7-1981 and 2-11-1981 addressed to Income-tax Officer, Mirpur requesting for the certified copies of the assessm ent orders and recovery certificate, respectively and therefore the petitioner's contention that he had no knowledge of these arrears is nothing but a misstatment of fact."
' The arguments of Mr. B.A. Sheikh the learned counsel for the respondents is that the petitioner got the knowledge of the Recovery Certificate on 2-11-1981, and, therefore, his Revision Petition moved on 22-6-1982 was time-barred because it was moved much after 90 days;
(d) That there is a finding of fact, that the petitioner had the knowledge as it is evident from his application for obtaining the copies, moved on 16-7-1981 and 2-11-1981. This finding of fact has not been challenged nor there is any explanation that the copies applied for were never furnished to him;
(e) That the C.P.C. does not apply to the income-tax proceedings and, therefore, it is not necessary that the legal representatives of a dead person (deceased) should be impleaded. In this case, it is mentioned in the certificate itself that Syed Badi-uz-Zaman Shah was dead and he is to be proceeded against his liability through Syed Abbass Ali Shah the petitioner. At the best, it is a minor error and is not an error of law. The Recovery Certificate was issued against the petitioner and not against the deceased Syed Badi-uz-Zaman Shah;
(f) That the Recovery Certificate can be issued against a dead person and there is no illegality if the legal representatives of the deceased "assessee" are not impleaded as a party because the legal representatives continue to be termed as an "assessee";
(g) That a more misdiscripation of an officer does not vitiate an order. The Recovery Certificate does not become illegal and invalid in law if the same officer is vested with powers under some other statute. Therefore, the Recovery Certificate issued to the Deputy Commissioner, Mirpur can be considered to be issued to the Collector as the same person holds the charge of the Collector of the District;
(h) That the petitioner is capable of paying the Income-tax and the additional tax because under the "Shia law" the widows do not get the landed property. A valuable plot and a fleet of buses is owned by him and this fact is proved from Annexures R/B, R/C, R/D, R/E and R/F, which documents are attached with the written statement filed by the non-petitioner/respondents. Therefore, the Income-tax authorities were justified to issue the Recovery Certificates and press for the recovery of all the arrears of Income-tax and the additional Income-tax against the petitioner who enjoys all the fruits of the property left by his father.
18. Replying to the Writ Petition No. 8 of 1984, Mr. B.A. Sheikh Advocate, submitted:-
(a) That the Income-tax Authorities are empowered under law to proceed against the Association of Persons (A.O.P.) which was dissolved in 1972 and it is not necessary to issue the Recovery Certificates against the individual members of the said A.O.P. He has referred to section 3(39) of the General Clauses Act of 1897 which defines a "person" and includes an Association;
(b) That at least eleven 11 buses belonged to the Abbass Bus Service and they were plied by and under the control and supervision of the petitioner;
(c) That as far as the point of laches in respect of the writ petition No. 8 is concerned, Mr. B.A. Sheikh Advocate, referred PA to RO (14 documents) which are applications moved by the petitioner. One application was moved in 1972 wherein the petitioner requested for fixation of instalments. Another application was moved in 1976 for supplying a copy. This shows that the petitioner slept over the matter since 1972 and has got no reasonable explanation as to why he did not file a writ petition in 1972 or at the best in 1976; and
(d) That the additional tax is not unconstitutional because it is only an additional liability for non- compliance or non-payment of the Income-tax. He has referred to the following authorities:-
(i) PLD 1976 Lah. 626 in which P I. D 1967 Dacca 673 was dissented from.
(ii) PLD 1977 Lah.
787.
19. I think that the following questions fall for determination in both the writ petitions:-
(1) Whether a "Demand Notice" is a must before the issuance of a Recovery certificate to the legal heirs of the original assessee?
(2) Whether the Recovery Certificates can be issued against a dead person?
(3) To what an extent the legal heirs are liable to the liability of a deceased assessee?
(4) Whether one legal heir/heirs of a deceased "assessee" can be proceeded against without the issuance of a Demand Notice first?
(5) Whether the Recovery Certificate can be issued and addressed to a Deputy Commissioner instead of a Collector of the District?
(6) Whether the petitioner was guilty, of laches and delay?-
(7) Whether the petitioner had an alternate remedy of appeal and as such these two writ petitions do not lie because the petitioner filed a Revision Petition instead of an appeal before the learned Commissioner Income-tax?
(8) Whether the revision petition before the learned Commissioner Income-tax was hospelessly time-barred?
(9) Whether the learned Commissioner Income-tax has decided all the points raised in the revision petition moved before him?
(10) Whether the imposition of additional tax is unconstitutional being a tax on income-tax? and
(11) Whether the impugned Recovery Certificates are liable to be quashed, under section 44 of the Azad Jammu and Kashmir Interim Constitution Act of 1974.
20. Now I will reply to the questions formulated above:-
21. A Demand Notice is necessary before the issuance of the Recovery Certificate, under law. In this connection. I would like to refer to section 29 of the Old Income-tax Act of 1922 read with section 85 of the Income-tax Ordinance of 1979. I reproduce below the section 85 of the said Ordinance which has replaced the Old Act of 1922:
(1) Where any tax is payable in consequence of any assessment or other order under this Ordinance, the Income-tax Officer shall serve upon the assessee, or any other person liable to pay such tax on behalf of the assessee, a notice of demand in the prescribed form specifying the sum payable; and thereupon the sum so specified shall be paid to the credit of the Federal Government within the time specified in the said notice.
(2) Notwithstanding anyting contained in subsection (1), where the assessee or any other person on whom a notice under the said subsection has been served makes an application for granting stay of payment of tax, or for allowing payment in instalments, the Inspecting Assistant Commissioner may, subject to the provisions of section 89, stay the payment of tax till such time as he thinks fit or allow the payment of tax in such instalments as he may determine."
' I would here like to refer to the following two cases:-
(i) B. Shah Mahmood v. Assistant Commissioner, Ramanagaran and another (1963) 64 I R R 55 Mysore High Court in which the validity of the Certificate for Recovery of tax from his properties was challenged by the petitioner in a Writ Petition on the ground of omission to serve notice of demand on one of the heirs. The assessee against whom proceedings for assessment as an individual had been commenced died before the assessment order was made. After the assessment a demand notice under section 29 was served only on one of his sons who had appealed from the assessm ent order. A certificate under section 46(2) of the Income-tax Act was issued to the Collector and in persuance of the Certificate the share of the petitioner, another son of the assessee, upon whom no notice of demand had been served, in the properties of the deceased was attached and brought to sale.
' It was held that the petitioner was an "assessee" for the purposes of section 46(2) but as notice of demand had not been served upon him under section 29 of the Act in respect of the arrears of tax due from his deceased father, a Certificate for Collection of such tax issued under section 46(2) and it was not lawful for the Revenue authority to recover the amount specified in the Certificate.
The meaning of "assessee" were also discussed. The Writ Petition was allowed and case law discussed.
(ii) In the case of Raja Pid Naik v. Agricultural Income-tax Yadgiri and another 1968 I.T.R. 401 Mysore High Court (FB). A Certificate was forwarded to recover the arrears from the assessee in default named in that Certificate. The assessee died and the efficacy of the Certificate come to an end and the recovery proceedings could not continue. Another certificate was considered necessary and for that purpose the Income-tax Officer had to find out the legal representatives and make a demand. On the death of an assessee, his legal representative becomes only "an assessee" but he would not become "an assessee in default" until the tax is demanded from him under section 23 and is not paid within the time allowed by section 33. Subsections (2) and (3) of section 22 under which an assessm ent may be made or continued against a legal representative as if he was the assessee are in opposite to recovery proceedings expressely regulated by section 34(3) of the Indian Income-tax Act of 1922. The case was referred to the Full Bench on a difference of opinion between the learned Judges i.e. K.S. Hegde and T.K. Tukol, JJ. In this case it was observed at pages 404, 405 and 406:- "On an analysis of section 22, it is seen that under section 22(1) the legal representative) is merely made liable to pay the tax assessed on the deceased assessee. That provision fixed as well as quantifies the liability of the legal representative. Under that provision he (the legal representative is not considered as a party to the assessment proceedings. His position more or less is that of a legal representative of a deceased judgment-debtor under the Civil Procedure Code. He cannot question the merits of the assessm ent. That is not the position under section 22(2). He is deemed to be an "assessee" even during the assessment proceedings. He can question the validity as well as the correctness of the assessm ent levied and also the legality or the regularity of the assessment proceedings. That position is made clear by subsection (2) of section 22 which, amongst other things, says: "...and may proceed to assess the total agricultural income of the deceased person as if such executor, administrator or other legal representative were the assessee."
' Under subsection (3) of section 22, the proceedings have to be continued against the legal representative according to law from the stage in which they were on the date of the death of the deceased assessee. When we read the three subsections together, what emerges is that, except in cases where assessm ent proceedings have not commenced either by the issue of a general- notice or a special notice as contemplated by law, the legal representative merely steps into the shoes of the deceased assessee. The proceedings have to be continued against him from the stage in which they were on the date of the death of the deceased assessee. The view expressed above accords with the ratio of the decision of this Court in I.R.R.C. No. 4 of 1959 (Abdul Rahman v.
Commissioner of Income-tax).
' This takes us to section 34(3) of the "Act". Prima facie, the language of that provision does not accord with the principles enunciated in section 22. It not only speaks of an "assessee in default" but further says "spec'fying the amount of arrears due from the assessee" and "shall proceed to recover from such assessee". Section 22 contemplates two different kinds of "assessees" i.e. the person whose income is assessed to tax and the person who is merely liable to pay. Who then is the "assessee" referred to in section 34(3), the person whose income is assessed to tax or the person who is merely liable to pay or both? If it is the former, the words "shall proceed to recover from such assessee" become incongruaus. The recovery in question cannot be made from the deceased assessee. Hence, we have to hold that the "assessee" mentioned in section 34(3) denotes a person liable to pay either because his income was assessed to tax or because he is liable to pay the tax assessed. If that is so, the said person cannot be considered as an "assessee in default" unless a demand notice under section 23 had been served on him. Though the distinction maintained in section 22 is logical and reasonable, we are compelled by the language of section 34(3) to conclude that a person liable to pay under section 22(1) of the "Act" the tax assessed on a deceased person can be considered as an "assessee" in default only after a notice under section 23 is served on him. It is true that in cases like the present one the fresh notice of demand to be given to the legal representatives of the deceased assessee reduces itself to a mere formality.
' In this case a Plethora of authorities have been discussed and it was observed that a person although an "assessee" yet cannot be held "an assessee in default? Hence no action can be taken against him without complying with the requirement of section 23. As a result, the respondents were prohibited from proceeding against the petitioner or his property under section 34(3) of the Act without complying with requirements of section 23 of the Act. If the legal representative is an assessee under the Act then the next question will be: Is he an assessee in default. Hence no action can be taken against him under that provision without complying with the requirements of section
23. The relevant sections in this connection are sections 23 and 34 of the Act. According to section 23, where any tax due in consequence of any order passed under the Act, the Income-tax Officer must serve on the assessee a notice of demand in the prescribed Form. Failure to pay within the time and at the place specified in the notice makes him an "assessee in default".
' At page 412 of this authority the A.I.T.O Circle 1, Salim v. E. Afred (1962) 44 I.T.R. 422, 445 (SC of India) has been referred to: The following lines from that authority are reproduced below:- "Where a person dies, his executor, administrator or other legal representative shall be liable to pay out of the estate of the deceased person to the extent to which the estate is capable of meeting the charge, the tax assessed as payable by such person, or any tax which would have been payable by him under this Act if he had not died."
' In this very case, another authority Shah Mahmood v. Assistant Commissioner, Ramanagaran (1963) 47 I T R 55 has been discussed in which a Division Bench of that very High Court had to deal with a case falling under sections 24-B(2) and 46(2) of the Income-tax Act. In that case one Bademiya died after the enquiry in the assessment proceedings had been completed but before the order of assessm ent was actually passed. Thereafter a demand notice under section 29 was served on one only of his sons who appealed from the assessment order. A Certificate under section 46(2) of the Act was issued to the Collector and in persuance of this Certificate the share of his brother (whom no notice of demand had been served) in the property of the deceased was attached and brought to sale. Their Lordships held that it was not lawful for the Revenue authorities to recover the amount before a Demand Notice was issued against him.
' The Full Bench held that the petitioner was not an "assessee in default" within the meaning of that expression found in section 34(3) of the Hyderabad Agriculatural Income-tax Act of 1950. The petition was allowed and the impugned proceedings were quashed.
22. Now I would like to consider the case of the Commissioner of Income-tax East Pakistan and two others v. Aswa b Ali and another 1970 SCMR 226. It was held in that case that the certificate proceedings started against the person in the absence of a notice duly served on him under section 29 of the Income-tax and section 12 of the said Act were without lawful authority. It is elementary principle of law that no person can be subjected to an obligation without affording him an opportunity to show cause. Section 29 of the Income-tax Act of 1922 provides that when any tax penalty or interest is due in consequence of an order passed under the Act by the Income-tax Officer was served upon him, the assessee or other person becomes liable to pay such penalty or interest after a notice of demand in the prescribed form. I reproduce the relevant portion of lucid authority of the Supreme Court of Pakistan from page 229-A & B: "It is an elementary principle of law that no person can be subjected to an obligation without affording him an opportunity to show cause. Similarly, an order favouring a person passed by a competent authority cannot be varied to his disadvantage without hearing him. In consonance with this principle section 29 provides that when any tax, penalty, or interest is due in consequence of any order passed under the Act, the Income-tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the prescribed form specifying the sum so payable. Failure to pay the amount can result in further penalty being imposed under section 46(1). An order under this subsection is appealable within 30 days. Valuable rights, therefore, accrue from the service of notice on the 'assessee' or 'any other person' cannot challenge in these proceedings the correctness etc., of the assessment for which he had to move in separate proceedings under section 30, but certainly the person to whom notice is issued can show that he is not the 'assessee' or 'any other person' is liable to pay tax, penalty or interest levied by the Income-tax Officer.
'The rule that notice served on the assessee firm fulfils the requirement of section 29 vis-a-vis its partners has, as seen above, no application to the case is which the person from whom tax, penalty or interest is sought to be recovered denies his membership of the firm. The High Court has, in this view, rightly come to the conclusion that the certificate proceedings started against the respondent in the absence of a notice duly served on him under section 29 of the Income-tax Act and section 12 of the Sales Tax Act were without lawful authority."
23. In the case of Begum Nusrat Bhutto v. Income-tax Officer 1981 SCMR 1192 (SC of Pakistan), I would like to reproduce para. 5 from page 133 wherein it has been clearly laid down by the Supreme Court of Pakistan that the demand notice is a must.
"The difficulty in the way of this submission is that it means reading into the demand notices what is not stated in them. Secondly, on the footing that the demands have been made on the petitioner in her capacity as one of the two widows of the deceased, she would be liable only to a 1/16th share of the net estate of the deceased. But the demand made on her is for the entire liability of the deceased, and Mr. Bilal was not able to explain how the 'petitioner, who was entitled to a 1/16th share of the net estate of the deceased could be liable for his entire tax liability. Therefore, on this ground alone, the notices are prima facie, illegal. Additionally, on the footing that the notices were issued under section 29, this section has to be read with section 24-B, and as subsection (3) of this section does not exclude a right of hearing, it means that the petitioner should have been heard before the demand for the said amount was made on her and on this ground also, the demand notices are, prima facie, illegal."
' In that case demand notice was issued in the name of one widow of the late Zulfiqiar Ali Bhutto, although the deceased had left behind two widows. No opportunity of hearing was allowed to the widows before the issuance of a demand notice. Under these circumstances, the demand notice was held illegal. A demand notice should not only be issued against all the legal representatives of a deceased assessee but it should also be issued in a legal way so as to include all the legal heirs of an assessee. Section 29 of the Income-tax Act of 1922 deals with the notice of demand. Section 29 is reproduced as under:- "When any tax, penalty or interest is due in consequence of any order passed under or in pursuance of this Act, the Income-tax Officer shall serve upon the assessee or other person liable to pay such tax, penalty or interest a notice of demand in the prescribed form specifying the sum so payable".
'Section 20 corresponds to section 85 of the Income-tax Ordinance of 1979. Therefore, it is necessary that the Notice of Demand should G be issued and served upon all the legal representatives of a deceased assessee.
24. In the case of Commissioner of Income-tax Karachi v. Azam Industries Ltd. Karachi, 1980 PTD 26 the High Court of Karachi was pleased to hold that default in payment of income-tax occurs after a notice of demand is issued to an assessee.
' Therefore, my view is that no Recovery Certificate can be issued against a dead person, as it is a nullity in the eye of law. The Income-tax Authority whould ascertain whether the person proceeded against is alive or dead and if an assessee is dead, his legal representa tives can be proceeded against End a fresh demand notice should be served upon them after giving them an opportunity of being heard. If they refuse to pay despite the demand notice issued under section 29 of the Old Income-tax Act. Then the recovery proceedings can be made against them as defaulters but one legal representative cannot be selected and victimised. I have already referred to the case of Beguml Nusrat Bhutto decided by the Supreme Court of Pakistan.
25. I have already expressed my view that one legal representative cannot be selected and proceeded against according to the sweet will of the Income-tax Officer. All the legal heirs should be proceeded against if they are found defaulters by their refusal after the issuance of notice for demand. If any authorities are needed in this respect, the following rulings shall suffice:-
(i) The case of Banu Asam and another v. I.-T.O. Quilon and others 1963 I.T.R. 99 (Kerala High Court).
The taxing authorities can attach the personal properties of the heirs of a deceased assessee for arrears of tax due by him only if it is found that the assets of the deceased have come into their hands and that they have not properly accounted for the same.
' Arrears of tax due from a deceased person under an assessment made on him as an individual cannot be recovered from his sons on the ground that the deceased and his sons were carrying on business as a firm.
(ii) Isha Beevi and others v. Tax Recovery Officer and others, Income-tax Reports Vol. 80 page 82 (Kerala High Court).
' In that case, out of the 22 Certificates of Recovery, 11 were issued after the death of the assessee mentioning him as the assessee. The Recovery Certificates were held invalid.
26. A legal heir or the legal heirs, as the case may be, of a deceased assessee can be proceeded against to the extent of his/their share which they inherit from the deceased assessee. The Income-tax authorities should read:
(i) The case of V.K. Kennan v. Collector of North Avcot 1966 I.T.R.;
(ii) (1964) I.T.R. 538;
(iii) (1961) 42 I.T.R.
715.
27. The Recovery Certificates should be issued according to law. The ignorance of law is of no excuse. The Income-tax Authorities should read the provisions of Income-tax Act of 1922 and the Income-tax Ordinance, 1979 carefully and issue a Recovery Certificate to the Collector of the District and not to the Deputy Commissioner as envisaged by section 64(2) which corresponds to the section 94 of the Income-tax Ordinance of 1979. I reproduce section 94 of the Income-tax Ordinance of 1979 as under: "The Income-tax Officer may forward to the Collector of the District in which the assessee resides or carries on business, or in which any property belonging to the assessee is situate, a certificate specifying the amount of any tax payable by the assessee; and, on receipt of such certificate, the Collector shall proceed to recover from the assessee the amount so specified as if it were an arrear of land revenue: ' Provided that, without prejudice to any other powers of the Collector in this behalf, he shall, for the purposes of recovering the amount so specified, have the powers which, under the Code of Civil Procedure, 1908 (V of 1908) a civil Court has for the purpose of the recovery of an amount due under a decree."
If I issue a writ as a Judge of Shariat Court, will it be valid?
28. I do not think that the petitioner was guilty of any laches or delay. As soon as he came to know about the Recovery Certificates he approached the learned Commissioner Income-tax in Revision Petition but when his revision petitions failed, he came to the High Court and invoked its constitutional jurisdiction. Even otherwise, the objection of laches and delay or acquiescence is not available to the respondents in this case because the impugned Recovery Certificates have been issued without a Notice of Demand and have been issued for recovery of the liabilities against a dead person (assessee). An order which is a nullity in the eye of law is not an order at all and can be ignored altogether even if no Writ Petition is moved to impeach it.
29. The petitioner has got no alternate remedy against the order passed by the Income-tax Officer under section 64(2) of the Income-tax Act because under section 138-C of the Income-tax Ordinance of 1979 (section 33-A of the Old Income-tax Act of 1922) the revision lies to the learned Commissioner Income-tax. The Recovery Certificate were issued by the Income-Tax Officer under section 94 of the Income-Tax Ordinance of 1979 (section 46(2) of the Income-tax Act of 1922). An order issued under section 94 of the Income-tax Ordinance is not appealable, hence revision lies and not an appeal. I am sorry, I cannot subscribe to the view of the learned counsel for the respondents. Mr. B. A. Sheikh Advocate, when he says that the issuance of the Recovery Certificate is an appealable order. When the revision failed, there was no alternate remedy left with the petitioner except to approach this Court under section 44 of the Azad Jammu and Kashmir Interim Constitution Act of 1974. Let me here say that a writ lies to the High Court as held in the case of Dr. H.K. Mehtab v. Income-tax Officer .1981 PTD 74. In that case the question of alternate remedy was considered and the writ petition was allowed and the notice under section 148 of the Indian Income-tax Act of 1961 was quashed.
30. It has been argued before me that all the points mentioned in the Writ Petition were not discussed and decided by the learned Commis sioner. The copies of the revision petitions are on the file and a careful perusal thereof reveals that all the points raised in the revision petitions were not decided. The revision petitions failed on the points of limitation and, therefore, the learned Commissioner Income-tax could not discuss all the points raised in the revision petitions. I am fortified in my view by the following authorities:-
(i) The unreported case of Ch. Abdul Karim v. Income-tax Officer (date of Institution-25-2-1983, date of decision 12-2-1983) decided by my learned brothers Mr. Justice Sardar Said Muhammad Khan, J (now the learned Judge of the Supreme Court of A J & K) and Mr. Justice Sardar Muhammad Ashraf Khan, J, wherein a question of law was not decided by the learned Commissioner Income-tax and it was laid down that if a material question affecting an assessm ent order is raised before the Appellate Tribunal and is not decided one way or other, it amounts to refusal to exercise jurisdiction which vests in the Appellate Tribunal under law;
(ii) The United Builders Corporation, Mirpur v. Commissioner of Income-tax, Muzaffarabad 1984 PTD 137 (High Court-AJK) decided by my learned brothers Mr. Justice Abdul Majeed Mallick C.J. and Mr. Justice Sardar Muhammad Ashraf Khan, J who made the following observation at p. (40) G.I reproduce para. 9 of that lucid authority:- "The second part of the reference pertains to the finding of the Appellate Tribunal. It is evident from the mamorandum of appeal that the assessee raised as many as 20 objections in the memorandum of appeal. The learned Appellate Tribunal felt advised to exercise on four objections mentioned in the impugned order. Failure of the Appellate Tribunal to apply its mind and decide the objections raised before it, obviously, tantamount to refusal to exercise the vested jurisdiction.
We do not go in detail of the point as we had already quashed the order of Inspecting Assistant Commissioner."
31. It is a question of great Public Importance whether the imposition of "additional tax" is ultra vires of the constitution or not. There is a difference of opinion between the High Courts of Dacca and Lahore and I have been given to understand that this question has gone up to the Supreme Court of Pakistan. In the case of Ziaullah Forest Company v. Commissioner Income-tax, the Supreme Courts of Azad Jammu and Kashmir is also seized of this very question. Both the learned Supreme Court have not decided the matter as yet and, therefore, I would like to refrain from expressing my views when the matter is sub judice before the learned Supreme Courts. However, I would like to mention the authorities on the point.
32. In the case of Zeenat Textile Mills v. The Commissioner of Income-tax Dacca Zone and others 1969 PLD 405(411) B= PLD 1969 Dacca 673, the question of the validity of the additional tax was considered by a Division Bench of Dacca High Court. It was held that the levy of additional tax was not legal and effective. The learned Judges carefully examined the wordings of section 45-A about the levy of additional tax. In that case Mr. Ishtiaq Ahmad, Advocate argued that the provisions of section 45-A for levying "an additional amount of tax equal to 6% per annum of the amount of tax due" from the assessee was totally outside the scope of the charging sections 3 and 55 and as such was illegal. On the other hand, Mr. Afzal Haque, the Advocate for department had submitted before the learned Court that although the language used is section 45-A was not a happy one, yet what the Legislature meant to say was that an amount of 6% on tax due would be levied if the assessee failed to pay the tax due on or before the date fixed in the notice of demand under section 29 of the Act and therefore, it was not a tax but a sort of penalty imposed on the defaulting assessee. Mr. Afzalul Haque got support from section 2(14) which defined "Tax" as:- "Tax means the tax payable under this Act and includes any penalty, interest, fee or any charge leviable under this Act."
The Dacca High Court repelled the argument of Mr. Afzalul Haque on the ground that there were other and separate provisions dealing with an assessee in default and they were contained in sections 45 and 46:- The Court was pleased to observe:- "In the event of an assessee becoming a defaulter as mentioned in section 45 he has to be dealt with under 46 section which provides the penalty to be imposed on the defaulting assessee.
Although the penalty provided for in section 46 is in reference to a defaulting assessee mentioned in section 45, and the amount recoverable by way of penalty is equal to the tax due or less than that and not in reference to the total income, yet there is no difficulty in imposition of penalty under section 46 in reference to the tax due because it is not a tax but a punishment, and Mr. Ishtiaq Ahmed does not contend that this could not be done. Rather he conceded that since it is penalty it can be imposed in reference to the tax due, as interest is leviable/payable under section 18-A of the Act, what we find is that an additional amount of tax" equal to six per cent per annum of the amount of tax due" sought to be imposed under section 45-A on an assessee who has not paid the "tax due" within the time cannot be termed either as penalty or as an interest because the language used immediately quoted above which is "an additional amount of tax If the Legislature as is sought to be argued by Mr. Afzalul Hague, intended to make this amount of 6% to be either a penalty or an interest on the "tax due" we find no reason for the Legislature not to have said so. The language used by the Legislature in a statute, according to the accepted principles of interpretation, must be given its ordinary plain meaning, where the language used by the Legislature is ambiguous and the intention of it cannot be gathered on a plain reading of -it then and then alone the question of assigning a meaning to it by way of interpretation arises but that again must be in confirmity with the other provisions of the statute. But where the language is clear, unambiguous and plain in its meaning, there is no scope for the Court to give an interpretation to it which the language cannot bear. In section 45-A the language used is "an additional amount of tax equal to six per cent per annum of the amount of tax due from the date of or before, " It can without any difficulty be said that the meaning and the intention of the Legislature is so clear and plain from the language used that it meant to levy an "additional tax" on the "tax due" the rate of which will be 7$ per annum of the tax due. Thus, it will be seen that the rate of 6% is not referable to the total income and the amount sought to be realised is neither interest nor penalty."
' On page 411, the learned Judges have met the objection of Mr. Afzalul Hague: - "We are also unable to accept the interpretation sought to be given by Mr. Afzalul Hague to the provisions of section 45-A depending on the definition clause 2 (14) of the Act, because section 2(14) speaks of two things while defining 'tax'. In our opinion the first part of section 2(14) refers to the tax payable under this Act, which has been defined in sections 3 and 55, and the second part of section 2(14) beginning with the words "and includes" to "this Act" only refers to penalty, interest, fee or other charge leviable under this Act to be a tax not as "tax" as mentioned in sections 3 and 55 for the purposes of realisation of penalty, interest, fee or other-charge leviable under the Income-tax Act as if it was a tax due. Or, in other words, the "tax" mentioned in the first part of section 2(14) is the tax simpliciter relatable to the total income of the assessee as mentioned in sections 3 and 55 whereas penalty, interest, fee or other charge leviable under this Act have been construed to be "tax" but said to be either income-tax or super tax as the case may be. Therefore, we find no reason to agree with Mr. Afzalul Hague that the definition clause 2(14), is of any assistance to him to interpret the provisions of section 45" an additional amount of tax equal to six per annum of the amount of tax due" to mean either a penalty or an interest payable by a defaulting assessee on the tax due. In our opinion therefore, "additional amount of tax equal to six per cent amount of the amount of tax due is a tax which is sought to be levied on the already computed tax due from the assessee on his total income for the assessment year without any support from the authorising sections 3 and 55. We have, therefore, no hesitation, on the language used in section 45-A, to say that the additional amount of tax levied on the date due from the petitioner for the assessment year 1960-61 is without any lawful authority or any legal basis."
33. On the other hand, in the case of M. Shakeel Saigol v. I.-T.O. PLD 1976 Lah. 616 (620), the case of Zeenat Textile Mills PLD 1969 Dacca 673 was dissented from and it was held that as section 95-A of the Income-tax Act appears in the chapter entitled "Recovery of Tax and Penalties", hence it is in the nature of an interest for delayed payment. Although it does not relate directly to income, which can be the subject-matter of tax under the Income-tax Act, undoubtedly its imposition is meant for enforcing the demand of income-tax and for facilitating its recovery matters which are eminently incidental or ancillary to the imposition of tax on income.
34. The matter again came up to the Lahore High Court in the case of M/s. Highway Petroleum Service v. Islamic Republic of Pakistan PLD 1977 Lah. 797 wherein the learned Judges of the Lahore High Court dismissed the writ petition but one of the learned Judges i.e. Mr. Justice Muhammad Afzal Zullah, J, agreed with the reasoning of the Dacca High Court.
35. Now this question is reported to be sub judice before the Supreme Court of Pakistan and the Supreme Court of Azad Jammu and Kashmir. Being a humble Judge of the Azad Jammu and Kashmir High Court I would refrain from expressing my own views on the question although my heart beats with Mr. Justice Muhammad Afzal Zullah, J (now the Judge of the Supreme Court of Pakistan). However, I am bound by the decisions of the Supreme Courts, and, therefore, leave this question open to be decided after the two learned Courts decide the controversy. It should be noted that when the Dacca High Court delivered the judgment, the rate of interest was perhaps 7% but today in 1985, this rate of interest has gone up to 15% and I have seen that the additional tax is 100$ more than the basic income-tax in both the cases before me. If the additional tax is levied like this, who will be paying the Zakat?
36. As the impugned Recovery Certificates have been issued against a dead person without issuing notice of demand to the legal representa tives of the deceased assessee in one case so the impugned Recovery Certificate is liable to be quashed because the Income-tax Authorities have failed to take the trouble of finding out the legal representatives of the late Syed Badi-uz-Zaman Shah and also failed to issue notices of demand under law. Syed Badi-uz-Zaman Shah has got many heirs but his only one son, the petitioner Abbass Ali Shah, has been arbitrarily picked up and fixed up by the Income-tax authorities for all the liabilities of his father. The petitioner has stated that he has already paid up a considerable money as the liability left by his father but the Income- tax Authorities are pressing hard to proceed against him only despite the fact that there are other legal representatives and one of them Shujaat Ali Shah is said to be contesting an election for the National Assembly from Islamabad. It is a case like that of Begum Nusrut Bhutto who was selected by the authorities and proceeded against.
37. As regards to the other writ pertaining to the Recovery Certificate against the A.O.P., it is no doubt a person but notices of demand should have been given to it and after giving an opportunity of being heard the A.O.P., could be proceeded against. The Revision Petition moved in this case raised many points which were left undecided by the learned Commissioner Income-tax.
A thorough enquiry should have been made as to how many buses were being plied and by whom and on which routes. The A.O.P. was not heard according to law and the natural justice, audi alteram partem, was violated.
Under these circumstances, I accept both the Writ Petitions (No. 7 of 1984 and 8 of 1984) and quash both the impugned Recovery Certificates.
(1) No. 9419, dated 24-12-1981) Issued by the Income
(2) No. 8341, dated 29-11-1981) Tax Officer, Mirpur.
No order as to the costs.