' Briefly, facts of the petition are that the petitioner filed his return of total income for the assessm ent year 1994-95 declaring an income of Rs,68,000 under section 55 of the Income Tax Ordinance, 1979 within the extended time allowed by the Income Tax Officer, respondent No,2 under subsection (3) of section 55 of the said Ordinance. The return, as claimed, fulfilled all the conditions of Self-Assessm ent Scheme contained in Circle No,9 of 1994, dated 11-7-1994 issued by the Central Board of Revenue, respondent No,1.
2. The respondent No,1 Central Board of Revenue, Government of Pakistan issued Circular No,7(7)
DTO-1/93 Vol. II, dated 1-11-1994 reproduced as under: "The undersigned is directed to state that under para. (1)(a) of the Self-Assessment Scheme for 1994-95, the returns filed within the time extended by Deputy Commissioner of Income Tax are not eligible under the scheme.
(Ehasn-ul-Haq), Secretary (DTO)."
3. The respondent No,2 excluded the petitioner's case from the Self-Assessment Scheme in view of the interpretation of clause (a) of para. No,1 of the Circular No,9 of 1994 and passed the assessment order for the year 1994-95 under section 62 of the said Ordinance on 2942-1994. Hence the petition on the ground that the interpretation of Circular No,9 of 1994 by the respondent No,1 is discriminatory as there is no rationale basis for excluding the petitioner's case from Self- Assessm ent Scheme despite the fact that the return was filed under section 55 of the Ordinance as was envisaged under the scheme.
4. Meanwhile, the Central Board of Revenue, respondent No,1 issued another Circular No,7(7)
S.Asstt./93 PL III, dated 26-1-1995 wherein new interpretation of clause (a) of para. No,1 of the Circular No,9 of 1994 has been prescribed which is reproduced as under:- "The undersigned is directed to state that it has been decided by the Board that where extension for filing returns of income was obtained from the Deputy Commissioner I.Ts. For filing such returns shall also be eligible under the said scheme.
(Ehsan-ul-Haq), Secretary."
5. Learned counsel for the petitioner relying upon the aforementioned circular, dated 26-1-1995 contended that the respondent No,1 has himself rectified the error by interpreting sub-para. (1) of para. 1 of the Circular No,9 of 1994, hence the petition be accepted and the order passed by the respondent No,2 be declared without lawful authority and nullity in the eye of law.
6. The learned counsel for the department vehemently contended that respondent No,2 did not commit any error or illegality by making the assessment of the said year under section 62 of the Ordinance by excluding the case of petitioner from Self-Assessment Scheme in view of the circular, dated 1-11-1994 as the Circular No,7(7) S. Asstt./93 PL III, dated 26-1-1995 was not in field at that time of assessm ent and the respondent No,2 was under obligation to follow the interpretation circulated by the Central Board of Revenue; the assessment has already been made on 29-12-1994 much prior to the issuance of circular by the respondent No,1, dated 26-1-1995. The petitioner cannot avail the benefit of said circular at this belated stage as the transaction is passed and closed; through this writ petition which otherwise is not competent under Article 199 of the Constitution of Islamic Republic of Pakistan as the petitioner has not availed the other remedies available to him.
7. Indeed, ordinarily, relief to an aggrieved person may not be granted under Article 199 of the Constitution Islamic Republic of Pakistan unless the Court is satisfied that no other adequate remedy is provided by law or the remedies if available have been exhausted by the aggrieved person and this discretion by the Court is to be invoked in extraordinary circumstances if it is shown that the order sought to be set aside had occasioned some injustice to the parties. In case in hand, the circular, dated 26-1-1995 is basically addressed to the Government functionaries in the interest of tax-payers at large who filed returns over within the extended time allowed by Deputy Commissioner I.Ts. And has created a right in favour of such tax-payers for the assessment year 1994-95 without any restriction.
8. It is a well-settled principle that if a concession or exemption from payment of taxes has been granted for a specified period in certain conditions and if a person fulfills those conditions; acquires a vested right and he cannot be decided such vested right. It is a settled law that where a substantive right has been provided, remedy must follow as the law does not provide right in vacuum. It has been held by their Lordships Federation of Pakistan v. Ibrahim Textile Mills Ltd. (1992 SCM R 1898) that: "It is not proper exercise of discretion to refuse relief to a party to which it is entitled under the law."
9. I am of the view that the writ petition under Article 199 of the Constitution is maintainable due to issuance of circular, dated 26-1-1995 by the respondent No,1 in suppression of circular, dated 11-7- 1994 aforementioned in exercise of powers conferred upon the Central Board of Revenue by the Ordinance, which has no doubt, created a vested right in favour of the taxpayers including the petitioner.
10. The question which arises for consideration in the case in hand is: "Whether the Circular No,7(7) S. Asstt./93 PT, III, dated 26-1-1995 neutralizes the effect of earlier Circular No,7(7) DTO-1/93 Vol. II, dated 1-11-1994 deems to be ineffective even on the past and closed transaction relating to the assessment year 1994-95 prior to the issuance of the said circular."
11. Admittedly, respondent No,1 is legally authorized to issue the new circular in continuation or suppression of the provisions one to effect any change and issue interpretations as and when necessary as the respondent No,1 Central Board of Revenue is the sole arbiter to do any taxation matters.
12. The instructions issued by the Board of Revenue are binding on all officers and persons employed in the execution of particular statute. In case of Navnit Lal C Javeri v. K.K. Sen AAC, Bombay (1965) 56 ITR 198, the direction given by the Board in the circular clearly deviated from the provisions of the Act, yet the Indian Supreme Court held that the circular was binding on the Income Tax Officers and the same dictum is being followed in this part of subcontinent.
13. The contention of the learned counsel for the department that the respondent No,1, the Central Board of Revenue while issuing the said circular was not aware of the fact that assessm ent/assessm ents in such cases have already been finalised is devoid of merits. I may observe that this Court cannot go into the question; whether the Central Board of Revenue was aware of the assessm ent/assessm ents made in certain cases prior to the issuance of the aforementioned circular and whether such material was placed before the Central Board of Revenue or not for issuance of the circular as in case Liaqat All and 11 others v. The State 1992 SCM R 372, it was observed: "Once a Notification is issued by the Federal Government is to be presumed that the opinion was formed by the Government on the basis of some material before it unless otherwise proved by the person making the contrary averments."
14. It may be observed that nothing has been brought on the record by the official respondents to indicate that the circular was not issued to have retrospective effect to the assessment if any made prior to the issuance of the aforementioned Circular. The circular has been gazette in the official Gazette, it has the effect as it was included in the Circular No,9 of 1994 on the very first day i,e, 11-1-1994 when it was issued by the Central Board of Revenue, respondent No,1.
15. The basic principle of interpretation of statute/circular is to harmonize the provisions, rather than to interpret in the manner that what is given by one is taken away by another statute/circular.
A construction of law or circular has to be made which is reasonable and is in consonance with the spirit of law or circular issued by the competent authority and efforts should be made to harmonize the two provisions of a statute/circular and one constructed with reference to the other so that conflicting meanings are avoided. As it is well settled that if two interpretations are possible, the one which will be consistent with the smooth working of the statute or circular and eliminates uncertainty, confusion and contradiction should be adopted as observed by their Lordships in case Abdul Qayyum and another v. Niaz Muhammad and another (1992 SCM R 613).
16. Similarly, it was observed in case A & B Food Industries Ltd. v. CIT, Karachi (1992 SCM R 663):-- "If the language of a statute is clear and unambiguous, the Court is bound to construe and give effect without taking into consideration anything extraneous to the same."
17. Applying this dictum of interpretation, I agree with the contention of the learned counsel for the petitioner which is well-founded that the aforementioned circular be construed liberally in favour of the petitioner as it was observed in case M/s. Miran Associates v. CIT, Karachi (1993 SCM R 274): "The cardinal principles of interpretation of fiscal statute seems to be that all the charges upon the subject are to be imposed by clear and unambiguous word. There is no room for any intendment nor there is any equity or presumption to tax. A fiscal provision of a statute is to be construed liberally in favour of tax-payers and in case of any substantial doubt, the same is to be resolved in favour of the citizen."
18. Both the circulars i,e, Circular, dated 1-11-1994 and circular, dated 26-1-1995 have been issued by the Central Board of Revenue in connection with interpretation of clause (a) to para. 1 of the Circular No,9 of 1994, dated 11-7-1994. The words in the afore mentioned circular are: "Such returns should also be eligible under the said scheme" clearly indicates that this should be deemed to have existed since from the very first day i,e, 11-7-1994."
It was held in case Mehr-un-Nisa v. Land Commissioner, Multan (PLD 1975 SC 397): "Where a statute contemplates that a state of affairs should be deemed to have existed, it clearly proceeds on the assumption on the fact that it did not exist by a relevant time but by a legal fiction was to assume as if it did exist."
20. The respondent No,1, Central Board of Revenue has been empowered by the Ordinance, 1979 to give its own meanings and interpretation of law from time to time by issuing Circulars under which the tax is to be collected and such interpretations and instructions are binding on the subordinates as already observed. The Board is competent and is well within its jurisdiction to issue such circulars to give retrospective effect so as to bound even "past transaction" as observed in case Mollases Trading and Export (Pvt.) Limited v. Federation of Pakistan and others (1993 SCM R 1905).
21. The outcome of the above discussion is that what is excluded by express words cannot be included on any principle of interpretation, therefore, the aforementioned Circular is presumed to be in existence since 11-7-1994 which is effective for the assessment year 1994-95 subject to the condition laid in the Circular No,9 of 1994 regarding Self-Assessment Scheme; hence created a vested right in favour of the petitioner. Further, the doctrine of promissory estoppel as laid down in case M/s. Army Welfare Sugar Mills Ltd. v. Federation of Pakistan and others (1992 SCM R 1652) is also available to the petitioner.
22. Resultantly, the assessm ent order made by the respondent No,2 is set aside being without lawful authority and ab initio beyond jurisdiction as of no legal effect. The respondent No,2 is directed to re-examine the case afresh in the light of the above discussion. To this extent, the petition is accepted without any order as to costs.