ABDUR RAHMAN KHAN, J.---The legality of deduction of income-tax under sections 50(2-A) and 50(2-B) of the Income Tax Ordinance from the account of the petitioner in the bank situated in the tribal area has been impugned in this writ petition. The main argument of the learned counsel for the petitioner was that Income Tax Ordinance having not been extended to the tribal area as required by Article 247 of the Constitution, therefore, the impugned deduction was violative of the Constitution. He referred to a document marked as Annexure R/D on the file which is a letter, dated 27-2-1995 from Government of Pakistan, Central Board of Revenue to the Chairman, Pakistan Banking Council which is reproduced in its entirety:--- "From Muhammad Boota Anjum, Secretary (W.H.T.).
To:
(1) The Chariman, Pakistan Banking Council, Habib Bank Plaza, I. I. Chundrigar Road, Karachi.
(2) The Presidents of All Private sector banks.
(3) Chief Operating Officers of all the Foreign Banks operating in Pakistan.
(4) The Managing Directors of all the Development Financial Institutions.
(5) Presidents of all the Investment Banks.
(6) All Regional Commissioners of Income Tax.
Subject: The Applicability of section 50 of the Income Tax Ordinance, 1979.
The matter of applicability of the provisions of Income Tax Ordinance, 1979 to the Tribal. Areas has been re-considered in consultation with the Law Division.
2. It is clarified that provisions of section 50 of the Income Tax Ordinance, 1979 are not applicable to the branches of Pakistani banks located in the Tribal Areas as defined in Article 218 of the Constitution of Pakistan or any part thereof because no Act of Parliament apply to the said areas except when the President or the Governor of the Province, as the case may be, so directed with the prior approval of the President.
3. This may please be brought to the notice of all concerned for compliance. (Sd.) (Muhammad Boota Anjum), Secretary (W.H.T.)."
The learned counsel representing the respondents when confronted with the contents of this letter naturally could not controvert its veracity and submitted that he knows about this letter and had consulted the respondents about its implication, therefore, he was not in a position to defend this writ petition.
Consequently, we allow the writ petition and declare the impugned deduction as against the provisions of the Constitution and being without lawful authority would have no effect. Moreover, Mr. Samiullah Jan, Advocate representing respondents 3 to 5 also produced a letter which is marked 3 and is dated 1-12-1996 wherein he has been directed by the National Bank of Pakistan, Zonal Office, Peshawar to inform the Court that the entries of all the deduction of withholding tax were reversed and the amount so far deducted has been credited into the account of Mr. Ghilaf Gul.