DR. GHOUS MUHAMMAD, J.---The petitioner is a Company incorporated under law and is wholly owned by National Fertilizer Corporation, which works under the administration and control of the Ministry of Production, Government of Pakistan. The matter concerns interpretation of certain provisions of the Income Tax Ordinance, 1979 (hereafter referred to as the 1979 Ordinance"), in particular section 53 thereof. Before any legal question is discussed it would be pertinent to lay down the facts first.
2. It is alleged by the petitioner that under law it was required to make payment of the first and second instalments of advance tax under section 53 of the 1979 Ordinance on 7-10-1998 and 7-1- 1999 for the assessm ent year 1999-2000. It is the case of the petitioner that it made the payments of advance tax which was due from it, while taking benefit of section 53(1)(b) of 1979 Ordinance, which was rejected by the Assessing Officer, who framed an order of assessment under section 53(1) on the premise that the advance tax was under-paid. In further pursuance thereof the Assessing Officer raised a huge liability and attached the bank accounts.
3. Mr. Muhammad Athar Saeed, the learned counsel for the petitioner has objected to the assessm ent under section 53 on the score that the Assessing Officer lacks the jurisdiction and authority to frame an assessm ent under section 53 and raise any demand in this regard. The learned counsel has further submitted that the petitioner has duly paid all the required advance tax and the Assessing Officer in framing the assessment order under section 53 has declined the petitioner the benefit available to it under section 53(1)(b). On the other hand, Mr. Muhammad Fareed, the learned counsel appearing for the respondents has vehemently contended that the petition is not maintainable due to availability of departmental remedies and also because under law the petitioner had not paid the due advance tax under section 53 and as such the Assessing Officer was fully justified in framing the impugned order. To the aspect of alternate remedies Mr. Saeed contended that an order under section 53 is not appealable under the 1979 Ordinance since under section 129 thereof i,e, the provision enabling filing of appeals from the order of the Assessing Officer to the first appellate authority (Commissioner of Income Tax (Appeals)), no mention is made of section 53.
4. We have heard the learned counsel for parties and perused the record and law on the subject.
On the factual plane there is a controversy as to whether the petitioner has paid the due advance tax under section 53. We are of the view that the petition can be decided without deciding such question if the following legal issues are determined:--
(i) Whether under the scheme of the 1979 Ordinance the Assessing Officer is possessed with any power or authority to frame an assessment order under section" 53 and whether the said Assessing Officer (sic) such advance tax?
(ii) Whether an order of assessm ent under section 53 of the 1979 Ordinance is appealable under section 129 thereof?
(iii) In case an order of assessm ent under section 53 is appealable could an assessee seek relief in Constitutional jurisdiction against such order on the score that such order is completely without jurisdiction?
5. Before we proceed to determine the issues underscored in para. 4 above it would he pertinent to first reproduce section 53 for convenience and at the same time outline its purpose and import.
The relevant part of section 53 of the 1979 Ordinance reads as under:--
53. Advance payment of tax.---(1) An assessee --- (a) other than a company or a registered firm, whose total income (excluding income to which section 27, section 80B, section 80C, section 80CC or subsections (1) and (2) of section 50 applies) for the latest assessment year in respect of which the tax payable by him has been determined under sections 59, 59A, 60, 62, 63 or 65 is not less than one hundred and fifty thousand rupees shall be liable to pay by way of advance tax to the credit of the Federal Government, on or before the seventh day of October, the seventh day of January, the seventh day of April and the twenty first day of June in each financial year), an amount equal to one-fourth of the full amount of income-tax and super-tax so determined to be payable in respect of that assessm ent year (without making any adjustment for any tax already paid by way of advance tax or otherwise), as reduced by the tax if any already collected or deducted and paid under section 50 in the said financial year, and
(b) being a company or a registered firm shall, in respect of its income (excluding income to which section 27, section 80C (or section 80CC) applies) be liable to pay by way of advance tax an amount which bears the same proportion to the company's or a registered firm's turnover for that year as the tax assessed, bears to the turnover assessed, for the latest assessment year in respect of which the tax payable by the company or registered firm has been determined under sections 59, 59A, 60, 62, 63 or 65, as reduced by the tax already paid under section 50 (other than the tax attributable to income covered by sections 80C and 80CC) in the said financial year.
(2) The tax payable,-
(i) under clause (a) of subsection (1) (i,e,, by assessee other than companies and registered firms) shall be paid to the credit of the Federal Government, on or before the fifteenth day of September, the fifteenth day of December, the fifteenth day of March and the fifteenth day of June in each financial year, and
(ii) under clause (b) of subsection (1) (i,e, by companies and registered firms) shall be paid to the credit of the Federal Government in each financial year, according to the following schedule:- TURNOVER RELATING TO THE PERIODTAX TO BE PAID ON OR BEFORE From 1 st of July to 30th of September the seventh day of October From 1st of October to 30th of December the seventh day of January From 1 st of January to 30th of March the seventh day of April From 1 st of April to 30th of June the seventh day of June [turnover for 16th June to 30th June shall be taken equal to the turnover of between 1st of June to 15th of June]
6. A perusal of section 53 as above would crystallize that advance income-tax thereunder is to be paid by an assessee if certain conditionality's are met and of course according to the yardstick or rates prescribed in such section. Whatever is the payment of advance tax, the same is then adjusted at the time of regular assessment. In this respect it would not be out of place to cite a judgment of our own Supreme Court i,e,, CIT and others v. Habib Sugar Mills Limited and others PLD 1993 SC 257, wherein it was observed that the payment of advance tax is a payment on account towards the payment of a tax which is determined after regular assessment to be payable in the future assessm ent year. Stating the jargon simply, an assessee is to pay advance income-tax in a particular assessm ent year, based upon the last assessed income. This advance tax is then adjusted with the actual income-tax liability which is found at the time of the regular assessment of that particular assessm ent year. The key question to determine is as to what can happen in case the assessee defaults on such payment of advance tax. The law-makers in their wisdom have provided for imposition of additional tax for failure to pay advance tax under section 87 of the 1979 Ordinance. Although there is the provision to charge additional tax for such default, the 1979 Ordinance does not confer any power upon the Assessing Officer to seek recovery of the defaulted amount falling under section 53. Such was also the position under the erstwhile section 18-A of the Income-tax Act, 1922, the predecessor of the 1979 Ordinance, while section 18-A was the comparable section to the present section 53. Be that as it may, in case an assessee defaults in paying advance tax under section 53 the Assessing Officer can impose additional tax under section 87 for such default and may even frame an order under section 87. However, as already observed there is nothing to expressly authorise the Assessing Officer to demand the defaulted amount under section 53. In case the assessee continues default of section 53 and the time for framing the regular assessm ent reaches, the substantive default of section 53 (i,e, advance income-tax) would automatically lapse since under law any payment of section 53 is a credit with the exchequer which is liable to be adjusted with the actual tax liability for that year. Thus, if no advance tax is paid under section 53 or less amount is paid at the time of assessment more or less adjustment, as the case may be, shall be given. However, the Assessing Officer would be within his limit to raise the amount of additional tax under section 87 despite the lapse of liability of section 53 since the additional tax under section 87 is not relatable to the adjustment of advance tax with the final liability at regular assessment stage but the same is connected with the default of payment under section 53 which may have already taken place. Even before the time of regular assessm ent there is no power with the Assessing Officer to insist upon the defaulted payment of section 53. All that he can do is to impose additional tax under section 87. In striking contrast, the law-makers in the Indian jurisdiction have given the power to the Assessing Officer not only to recover the defaulted amount of advance tax during the course of the year i,e, before the final regular assessm ent, but also do so through framing an assessment order to such effect. The relevant provision in this regard from the Indian jurisdiction is section 210(3) of the Indian Income Tax Act, 1961, which for the sake of convenience is being reproduced as under:- "Section 210. Payment of advance tax by the assessee of his own accord or in pursuance of order of Assessing Officer.---(1)..............
(2) ..................................................................................................................
(3) In the case of a person who has been already assessed by way of regular assessment in respect of the total income of any previous year and who has not paid any advance tax under subsection (1), the _ Assessing Officer, if he is of opinion that such person is liable to pay advance tax, may, at any time during the financial year but not later than the last day of February, by order in writing, require such person to pay advance tax calculated in the manner laid down in section 209, and issue to such person a notice of demand under section 156 specifying the instalment or instalments in which such tax is to be paid."
The position in Pakistan, thus, is completely different from the predicament prevalent in India. In Pakistan the Assessing Officer bears no powers to insist upon the defaulted payment of section 53 or frame any order to raise such demand. All that he can do is to impose additional tax under section 87. In view of such position we hold that in the present case the exercise of power by the Assessing Officer raising a demand for the alleged defaulted amount under section 53 and framing an assessm ent order in this regard are completely without jurisdiction, unlawful, void ab initio, of no legal effect, being completely extraneous to the scheme and powers under the 1979 Ordinance.
7. However, this is not the end of the matter. The question is as to whether the order under section 53, though without jurisdiction, is appealable. In this regard reference is made to section 129 of the 1979 Ordinance which for the sake of convenience is reproduced as follows:-- "129. Appeal to the Additional Commissioner.---(1) Any assessee objecting to an order made by a Deputy Commissioner under section 59 or 59-A where any adjustment has been made under subsection (3) or subsection (2) respectively of those sections 62, 63, 65. 68, 75, 80, 80-A, 91, 98, 99, 105 to 112) (inclusive), 114 or subsection (2) of section 148, or an order under section 52, treating a person to be an assessee in default, or an order under section 78, treating the assessee as an agent of a non-resident, or an order under section 156 refusing to rectify the mistake, either in full or in part as claimed by the assessee or having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee may appeal to the Appellate Additional Commissioner against such order. (Underlined for emphasis)
(2) No appeal under subsection (1) shall lie against any order of assessment unless the tax payable under section 54 has been paid."
8. It is correct that section 129 does not specify section 53, however, the underlined portion of the said section 129 (as above) would read to the effect that "Any assessee objecting to an order made by a Deputy Commissioner having the effect of enhancing the assessment or reducing a refund or otherwise increasing the liability of the assessee ma a seal to the Appellate Additional Commissioner against such order." Surely an order under section 53 demanding defaulted payment thereunder amounts to either enhancing the assessment or reducing the refund or otherwise increasing the liability of the assessee. In particular the omnibus clause in section 129 "or otherwise increasing the liability of the assessee" is of wide import and there is nothing in the context to give it a restrictive interpretation. The term "otherwise" in the said section 129 covers all eventualities of increase of liability and is not necessarily to be interpreted as ejusdem generis with the preceding clauses. We are fortified to arrive at such conclusion on the basis of the following reference:--
(a) Vepa P. Sarathi, "Interpretation of Statutes", Third Edition at page 94: "It was held: the rule ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application. The Legislature when it used the word 'or otherwise', apparently intended to cover other cases which may not come within the meaning of the preceding clauses..."
(b) Bindra's "Interpretation of Statutes", Seventh Edition at page 1097: "Lord Simon observed in National Association of Local Government Officers v. Bolton Corporation (1943 AC 166, 176: (1942) 2 All ER 425): The use of the words 'or otherwise does not bring it into play the ejusdem generis principle....As the derivation of 'otherwisemeans 'or in another way."
"These are not words of limitation but of extension: Lilavati Bai v. State of Bombay, AIR 1957 SC 521, 528."
"Where the Legislature have granted a relief in certain prescribed cases without using the words 'and for any other causeor 'for other sufficient reasonsor 'otherwise', and they have stopped short after mentioning certain definite contingencies in which alone the reliefs can be claimed, it would not be right or proper to hold that the same relief could be granted even in cases falling outside those contingencies: Kanhaiya Lal v. Banshi Lal, AIR 1950 All. 444, 447."
(c) Surendra Malik, "Supreme Court on Words and Phrases", 1993 Edition, E.B.C., Lucknow at page 479: "or otherwise" --Bombay Land Requisition Act, 1948, S. 6, Expin. (a)
"The Legislature, when it used the word 'or otherwiseexplanation (a) to section 6 of the Bombay Land Requisition Act, apparently intended to cover other cases which may not come within the meaning of the preceding clauses, for example, a case where the tenant's occupation has ceased as a result of trespass by a third party. The Legislature, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever. Hence far from using those words ejusdem generis with the preceding clause of the explanation, the Legislature used those words in an all inclusive sense.
In the context of the object and the mischief of the enactment there is no room for the application of the rule of ejusdem generis. Lilavati Bai v. State of Bombay, AIR 1957 SC 521, 528, 529; 59 Bom. L.R.
934."
(d) Dr. R.N. Swami, Judicial Interpretation of Words and Phrases Under Direct Tax Laws", 1992 Edition at page 385: "The word 'or otherwisein subsection (2) signifies that in whatever manner tax is paid it shall be taken note of in calculating the interest C.I.T. v. Atlas Cycle Industries (1989) 180 ITR 319 at page 322 (P&H)."
N.B. --The matter is in respect of section 215 (2) of the Indian Income Tax Act, 1961.
(e) Sardar Muhammad Iqbal Khan Mokal "Law Terms and Phrases", 1982 Edition at page 655: "Otherwise". The tolls may be led by public auction or otherwise than by public auction. Where the procedure of a public auction is not accepted, any other procedure is open. There is no indication that this procedure must be of the same nature as that of a public auction. (Cf. North India Ferries Act, 1878, section 8). Baij Nath Prasad v. The State of U.P. And others, AIR 1968 All.
288."
(f) Black's Law Dictionary, Revised Fourth Edition at page 1253: "Otherwise". In a different manner, in another way, or in other ways. Safe Deposit & Trust Co. Of Baltimore v. New York Life Ins. Co., D.C. Md. 14F Supp.; 721, 726."
(g) Webster's Collegiate Thesaurus, 1988 Edition at page 526: "Otherwise adj syn Different 1. Disparate, dissimilar, distant, divergent, diverse, other, unalike, unequal, unlike."
(h) Lal Chand v. O.S.D. 1984 CLC 2396 (DB Kar) as per Nasir Aslam Zahid, J. At page 2398: "in the proviso to section 7(1)(b) of M.L.R. 115, it is provided that any transfer of land or creation of any right or interest in or encumbrances on any land, by way of gift or otherwise made by a person in favour of his heir during the specified period cannot be held to be void on the ground that the transaction was not bona fide. The proviso refers not only to transactions of land by gift by a person in favour of his heirs but also uses the words 'or otherwiseand as such transfers of land by other mode that is by sale or through exchange are also covered by the proviso. Learned counsel for the petitioner has referred to Abdul Ghafoor v. Federal Land Commission, decided by Shafiur Rehman, J. The word 'otherwiseemployed in the proviso in question is not to be given a restrictive meaning but on the contrary it has to be read as extending the mode by which such transfers could take place or right or interest to be creased .... The learned Single Judge came to the conclusion that the word 'otherwisein the proviso was not confined only to the transaction in the nature of gift but also extended to other modes by which transfer of land could take place or right or interest in land could be created. We are of the same view as has been taken in PLD 1975 Lah.
375. In our view, also the word 'otherwisein the proviso in question embraces not only transactions in the nature of gift but also any 'other transaction whereby right or interest in land is transferred or created. A transfer of land through exchange will also be covered by the word 'otherwise."
(i) M/s. Aslam Saeed & Co. v. M/s. T.C.P. Ltd. PLD 1985 SC 69 as per S.A. Nusrat, J., at page 81: "27. The words 'otherwise invalidare not ejusdem generis with the other cases mentioned in section
30. The same are meant to include all cases of invalidity on grounds other than those mentioned."
9. In the context of income-tax we have been able to lay our hands on Hassan Ali Kara Bhai v. CIT PLD 1974 Kar. 473 wherein Noor ul Arfeen, J. Writing for the Court, held that notwithstanding that no specific appeal was provided under section 30, of the Income-tax Act, 1922 against an order under section 35, however, such appeal lay since the order under section 35 partook the character of a fresh assessm ent order referable to section 23 of the 1922 Act, and therefore such an order being in the nature of an order of assessm ent was appealable to the Appellate Assistant Commissioner under section 30 of the Act.
10. The above discussion would amply confirm that the omnibus clause in section 129 i,e, "or otherwise increasing the liability of the assessee" covers every possible eventuality where the tax liability or obligation to pay income-tax is increased or refunds reduced, making such orders appealable under section 129. We accordingly hold that the impugned order in this case i,e, the order under section 53 would be appealable under section 129 and to this extent the contention of Mr. Athar Saeed is not correct. We take this opportunity to further clarify that the judgment of the Hon'ble Supreme Court in I.T.O. v. Eruck Maneckji 1991 PTD 663 is distinguishable in the present context. In that case the Income Tax Officer had passed an order under section 18-A of the 1922 Act, and it was observed that no appeal lay against such order, though a revision was competent. The law as it was under the 1922 Act pertaining to first appeals was contained in section 30 thereof which did not contain any omnibus clause analogous to the one as identified in section .129 of the 1979 Ordinance. The present law as contained in section 129 of the 1979 Ordinance has accordingly completely transformed the ability of assessees to prefer appeals as compared to the law as it was under the 1922 Act. The case of Eruck Maneckji and the principle of law evolved therein would have no application under the 1979 Ordinance.
11. Though we have held that the impugned order under section 53 is appealable under section 129, we still feel that in the present circumstances the petition would be maintainable since the impugned order is completely without jurisdiction and extraneous to the very powers conferred under the 1979 Ordinance on the Assessing Officer. It is settled law that availability of alternate remedies would be no bar to the maintainability of Constitutional petitions where impugned orders are completely without jurisdiction, mala fide, unlawful and of no legal effect. The latest pronouncement of the Hon'ble Supreme Court in this regard in Gatron (Industries) Ltd. v.
Government of Pakistan, 1999 SCM R 1072, which reiterates this principle yet again, and which was earlier echoed by this Court in Kamran Industries v. Collector of Customs. PLD 1996 Kar.
68. When it is amply demonstrated that the impugned order is completely without jurisdiction, it would be a travesty of justice, as in the present circumstances, to decline relief as the impugned exercise of power goes to the very root of the jurisdiction.
12. We accordingly allow the petition and declare the impugned order of the Assessing Officer under section 53 of the 1979 Ordinance to be completely without jurisdiction, while striking the same down. We may, however, clarify that in this judgment we have not decided the question as to whether the petitioner had in fact met its obligation of payment of advance tax under section 53 or whether it has under-paid such amount. The respondents are at liberty to take suitable action in accordance with law and if so permitted by it, in light of the guidelines provided hereinabove.
Equally, the petitioner shall be at liberty to seek its lawful remedies also in terms of the indicators underscored above.
(Sd.)
Dr. Ghous Muhammad, Judge.
S. AHMED SARWANA, J.---I have had the benefit of reading the judgment proposed to be delivered by my learned brother. I agree with his conclusion; however, I would like to briefly state my reasons for the same conclusion which are slightly different. They are as follows: According to the statements made in the petition, the petitioner is a limited company wholly owned by National Fertilizer Corporation and is being controlled by the Ministry of Production, Government of Pakistan. It is carrying on the business of manufacture of Urea and its by-products.
Petitioner is being assessed by the Income Tax Department and its assessments up to the year 1997-98 have been completed. In the Assessment Order for the Assessment Year 1997-98 the Deputy Commissioner of Income Tax (respondent .No,5) treated the sales made by the petitioner to National Fertilizer Marketing Ltd. As sales and did not give any finding that the transaction between the two companies was anything other than sales. It is further alleged that the petitioner was required to pay Advance Tax under section 53 of the Income Tax Ordinance, 1979 (hereinafter referred to as "the Ordinance") on the basis of the latest completed assessment which was for the year 1997-98 wherein the turnover of the petitioner was determined at Rs,3,619,061,312 and tax of Rs,411,934,285 was levied thereon: that is at the ratio of 11.38% of the sales and consequently the petitioner was required to pay Advance Tax for the Assessment Year 1999-2000 at the said ratio, By letter, dated 2-10-1998 petitioner informed respondent No,5 that according to latest assessment the turnover of the petitioner for the first quarter ending 30-9-1998 (excluding turnover falling under section 80-C of the Ordinance worked out to be Rs,846,515 and accordingly petitioner was required to pay an amount of Rs,96,333, as the first instalment of advance tax for the assessment year 1999-2000. In the said letter, petitioner pointed out that against the required payment of Rs,96,333 tax amounting to Rs,320,613 had already been withheld leading to an excess deduction of Rs,224,283 which would be adjusted against the second instalment of Advance Tax due on 7-1- 1989. Meanwhile, on 30-9-1998 petitioner filed a statement under section 143-B of the Ordinance exercising its option under clause 9 of Part IV of the Second Schedule of the Ordinance for the Assessm ent Year 1998-99. The exercise of the said option was not accepted by the Income Tax Department and by letter, dated 27-10-1998 respondent No,5 directed the petitioner to file its return under the normal law on the prescribed date on the basis of Audited Accounts and also directed the petitioner to forthwith pay the tax due under section 53 on 7-10-1998 towards the first instalment of advance tax. In the notice dated 27-10-1998 sent by respondent No, 5 to the petitioner no reference was made to the petitioner's letter of 2-10-1998. Thereafter extensive correspondence took place between the petitioner and respondent No,5 regarding the exercise of option under clause (9) of Part IV of the Second Schedule of the Ordinance for the Assessment Year 1998-99. By letter/Notice dated 30-11-1998 respondent No,5 informed the petitioner that the option of presumptive tax regime was not available/applicable to it for the reason, inter alia, that the relations between the petitioner and National Fertilizer Marketing Ltd. Were not that of seller and purchaser but that of principal and agent and again advised it to forthwith pay the tax due under section 53 on 7-10-1998 alongwith additional tax under section 87 latest by 4-12-1998 with a warning that in case of failure to comply with the provisions of section 53, necessary recovery measures available under the law would be adopted against the petitioner. Ultimately, respondent No,5 passed an Order under section 53(1) of the Ordinance (copy of the Order passed by respondent No, 5 has been filed as Annexure "I" to the petition but no date of Order has been printed thereon) directing the petitioner to pay the following amounts towards the fist and second instalments under section 53(1) of the Ordinance by 8-2-1999:-- "Turnover assessed for Assessment Year 1997-98 2,750,540,654 Tax for Assessment Year 1997-98 411,934.285 Tax ratio 14.976 % Turnover for 1st quarter 1999-2000 (i.e. July, September, 1998)997,846,486 Tax on the basis of ratio 149,437,490 Less: Deducted under section 50 35,250,612 Balance payable for 1st quarter 114,186,878 Turnover for 2nd quarter 1999-2000 (October 1998 to December 1998)854,464,503 Tax on the basis of ratio 127,964,604 Less: Deducted under section 50 40,360,024 Bal. Payable for 2nd quarter 87,604,500 Total tax payable 281 791,458."
The petitioner responded to the said demand by letter, dated 13-2-1999 explaining the position but without any fruitful result. Aggrieved by the aforesaid Order (undated) under section 53(1) of the Ordinance, petitioner filed the present Constitution petition, inter alia, on the ground that the impugned Order was mala fide, illegal, void and of no effect and sought, among others, the following reliefs in the Prayer Clause: "(a) Cancel the Impugned Order.
(b) Declare that the petitioner has fulfilled his obligations under section 53 and has paid the first and second instalments in accordance with the provisions of section 53 of the Income Tax Ordinance, 1979.
(c) ..
(d) Grant any other appropriate relief which this Honourable Court may deem fit and proper."
As far as petitioner's prayer (b) for declaration that it has fulfilled its obligation under section 53 and has paid the first instalment and second instalments in accordance with the provision of section 53 of the Income Tax Ordinance, 1979 is concerned, it is a question of fact which requires investigation and, therefore, this relief cannot be granted by the Court in its Extraordinary Constitutional jurisdiction under Article 199 of the Constitution.
With regard to Prayer (a) for cancelling the impugned order and prayer (d) for grant of any appropriate relief Which this Hon'ble Court may deem fit and proper is concerned, the matter requires examination under the provisions of the Ordinance, 1979. According to the Scheme of the Income Tax Ordinance, 1979 specially as reflected from Chapter VII thereof, every assessee is required to furnish a return of his total income under section 55 of the Ordinance for the income year (which is usually from 1st July of an year to the 30th of June of the following year) on or before 30th September next following the income year or up to such extended date. As the Department may notify in this behalf. Thereafter, if the Deputy Commissioner of Income Tax is satisfied without requiring the presence of the assessee or without the production of any evidence that the return filed by the assessee is correct and complete, he determines the tax payable on the basis of such return (section 59-A). However, if the Deputy Commissioner requires further information and/or evidence he issues a notice under section 61 of the Ordinance to the assessee and after obtaining the required information, document/s and examining the accounts passes an order on the basis of such assessm ent under section 62 of the Ordinance. While determining the tax under section 62 he is required to give credit of the advance tax deducted at source under section 50 and advance tax paid by the assessee under section 53 of the Ordinance. It is during the course of such assessment proceedings that the question relating to payment, non-payment or short payment of any instalment of advance tax, which the assessee was required to make, is to be considered. If the Assessing Officer finds either that the assessee has failed to make payment, has delayed payment or has made short payment, he has the authority to proceed against the assessee under section 53 read with section 87 of the Ordinance and determine the liability in the Assessment Order passed under section 62 of the Ordinance by imposing additional tax as provided by section 87 of the Ordinance. It would be appropriate to reproduce here the relevant provisions of sections 53 and 87 of the Ordinance which read as follows: "Section 53. Advance _payment of tax.---(1) An assessee---
(a) other than a company or a registered firm, whose total income (excluding income to which section 27, section 80B, section 80C, section 80CC or subsections (1) and (2) of section 50 applies) for the latest assessm ent year in respect of which the tax payable by him has been determined under sections 59, 59A, 60, 62 or 65, is not less than one hundred and fifty thousand rupees shall be liable to pay by way of advance tax to the credit of the Federal Government, on or before the seventh day of October, the seventh day of January, the seventh day of April and the twenty-first day of June in each financial year, an amount equal to one-fourth of the full amount of income-tax and super-tax so determined to be payable in respect of that assessment year (without making any adjustment for any tax already paid by way of advance tax or otherwise), as reduced by the tax, if any, already collected or deducted and paid under section 50 in the said financial year; and
(b) being a company or a registered firm shall, in respect of its income excluding income to which section 27, section 80C or section 80CC applies) be liable to pay by way of advance tax an amount which bears the same proportion to the company's or a registered firm's turnover for that year as the tax assessed, bears to the turnover assessed, for the latest assessment year in respect of which the tax payable by the company or registered firm has been determined under sections 59, 59A, 60, 62, 63, or 65, as reduced by the tax already paid under section 50 other than tax attributable to income covered by sections 80C and 80CC in the said financial year.
Section 87. Charge of additional tax for failure to pay advance tax.--(1) Where an assessee who was required to pay tax under subsection (1) of section 53---(a) fails to pay any instalment; or (b) fails to pay any instalment on or before the specified date; or (c) fails to pay the full amount payable by him, he shall, without prejudice to any other liability which he may incur under this Ordinance, be liable to pay additional tax at the rate of twenty-four per cent. Per annum on the amount not paid, and such additional tax shall be calculated from the date on which such amount was payable to the date on which it is paid or the thirtieth day of September, of the financial year next following, whichever is the earlier.
(2) Where in respect of any year, any assessee fails to pay tax under subsection (2) of section 53 or the tax so paid is less than eighty per cent. Of the tax chargeable for the relevant assessment year, he shall be liable to pay additional tax at the rate of twenty-four per cent. Per annum on the amount of tax so chargeable or the amount by which the tax paid by him falls short of the said eighty per cent. As the case may be; and such additional tax shall be calculated from the first day of April in that year to the date on which assessment is made or the thirtieth day of June of the financial year next following, whichever is the earlier."
A bare reading of section 53 clearly indicates that if an assessee does not pay the advance tax instalment, delays payment of the instalment or makes short payment of the instalment, no immediate penalty is provided for the dereliction. There is not a single word in the entire section from which it can be inferred that the Assessing Officer has the power to direct an assessee to pay the instalments which he is required to pay under the said section. However, under section 87(l) of the Ordinance, the assessee is liable to pay additional tax at the rate of 24 per cent. Per annum on the amount of the tax not paid, delayed or short paid which additional tax is calculated from the date on which the said amount should have been paid till the date on which it is actually paid or the 30th day of September of the financial year next following, whichever is earlier. For other eventualities regarding payment of advance tax different rates and dates of payment are provided under section 87(2) of the Ordinance. There is no other provision in the entire Ordinance except section 87 which provides for the consequences of nonpayment, short payment or delayed payment of advance income-tax under section 53 of the Ordinance. The impugned Order (undated) refers to section 53(1) of Income Tax Ordinance, 1979 under which it was passed.
Whereby the petitioner was required to pay Rs,281,791,458 with a warning that if the aforesaid demand was not paid the same shall be recovered through recovery action under section 92/93 of the Income Tax Ordinance, 1979.
As stated above section 53 of the Income Tax Ordinance does not contain any authority or provision whereby any officer of the Income Tax Department has been empowered to make any assessm ent or demand any payment from the assessee on his failure to pay, for delay in payment or for short payment of advance tax under section 53 of the Ordinance. The most the Deputy Commissioner of Income-tax can do is to take action against the assessee for non-payment, short payment or delayed payment of advance tax by imposing additional tax under section 87 of the Ordinance while making an assessment, inter alia, under section 60 or 62 of the Income Tax Ordinance, 1979. He has no authority, whatsoever to make any demand under section 53(1) of the Ordinance at any other time. In view of this position, it is clear that the impugned order (undated) passed by the Deputy Commissioner of Income Tax (respondent No,5) requiring the petitioner to pay Rs,281,791,458 is patently without jurisdiction, unlawful, mala fide and contrary to the provisions of the income Tax Ordinance, 1979 and cannot be sustained. The petition is accordingly allowed with costs and the impugned order is cancelled.