MALIK MUHAMMAD QAYYUM, J.--1. M/s. Bashir Sons (Pvt.) Limited is running a cloth bleaching, dyeing and printing unit in Faisalabad. The Central Board of Revenue, in exercise of power vesting in it under section 3(4) of the Sales Tax Act, 1990, decided to levy and collect fixed amount of tax in lieu of sales tax payable by the petitioner. On 17th August, 1991, two Notifications were issued by the Board, first by which the rates of taxation were notified while by second Notification bearing No. 783(I)/91, laying down for determining liability were promulgated.
2. In this petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, the grievance of the petitioner is that though fixed tax has been levied from 17th August, 1991, the respondents are demanding payment of fixed tax from 1st July, 1991 onwards.
3. In support of this petition, Mian Saqib Nisar, learned counsel for the petitioner has contended that as the notification levying feed tax was issued on 17th August, 1991, the respondents cannot demand feed tax before the date especially when the notification itself does not purport to be retroactively applicable. It is also argued that a notification cannot be given retrospective effect in the absence of any provision to that effect in the statute itself. In support of this contention, learned counsel has relied upon Commissioner of Sales Tax (West). Karachi v. Messrs Kruddsons Ltd. PLD 1974 SC 180, Kohi-Noor Textile Mills Ltd. v. Commissioner of Income Tax, Lahore PLD 1974 SC 284, Messrs Army Welfare Sugar Mills Ltd. And others v. Federation of Pakistan and others 1992 SCMP 1652 = PTCL 1993 CL. 188 and Messrs Julian Hoshang Dinshaw Trust and others v. Income Tax Officer, Circle XVIII, South Zone, Karachi and others 1992 SCM R 250 = PTCL 1992 CL. 181.
4. There is considerable merit in the contention raised by the learned counsel for the petitioner. It is evident from a perusal of two notifications, first by which the fixed tax was levied and second by which rules were promulgated that these notifications have not been given any retrospective effect and, therefore, it is not understandable as to how the respondent can demand payment of tax from a date earlier than the issuance of the notifications.
5. It is trite law that a notification which has the effect of imposing liability or obligation cannot operate retrospectively in the absence of any legal sanction in the statute itself. In Messrs Army Welfare Sugar Mills Ltd. And others v. Federation of Pakistan and others 1992 SCMK 1652 = PTCL 1993 CL. 188 Commissioner of Sales Tax (West), Karachi v. Messrs Kruddsons Ltd. PLD 1974 SC 180 and Kohi-Noor Textile Mills Ltd. v. Commissioner of Income Tax, Lahore PLD 1974 SC 284, it was held by the Supreme Court that a notification which purports to impose a new liability or obligation cannot operate retrospectively in the absence of any legal sanction.
6. Faced with this situation, learned Standing Counsel has argued that the tax is being demanded with effect from 1st July, 1991 with the consent of and in consultation of All Pakistan Textile Processing Mills Association of which the petitioner is a member. However, nothing has been brought on record to substantiate this contention. Even in the parawise comments filed by the respondents, there is no such assertion. This argument of the learned Standing Counsel is, therefore, without any factual basis and cannot be accepted. Furthermore, it is highly doubtful as to whether consent of an association of which petitioner is a member can be made the basis for levying a tax on it.
7. It flows from the above that demand of the respondents for the payment of fixed tax for the period 1st July, 1991 to 17th August, 1991 is clearly without any lawful authority especially when the notifications themselves do not purport to have any retrospective operation.
For the reasons aforesaid, this petition is allowed and demand of the respondents for payment of fixed tax on the basis of notification, dated 17th August, 1991 after the period prior to the issuance of notification was declared to be without lawful authority and of no legal effect. It is, however, clarified that it shall be open to the respondents to recover the sales tax for the period in question under the normal law. No order as to costs.