According to the writ petition, the petitioner was enjoying exemption from payment of income-tax in terms of clause (125-A) of Part I of Second Schedule to the Income Tax Ordinance, 1979 when he was made to pay the turn over tax under section 80D of the Ordinance Later, according to the learned counsel, by virtue of the decision given by the Hon'ble Supreme Court of Pakistan in Elahi Cotton Mills v.
Federation of Pakistan PLD 1997 SC 582, it was held that the exemptees are not held liable to pay the said tax. An application was filed for refund. However, the officer concerned instead of adjudicating upon the said application and deciding the same in accordance with law proceeded to reject the same vide order dated 20-12-1997 for reason that a letter dated 11-12-1997 issued by the C.B.R. Prohibits him from granting any said relief. Learned counsel with reference to Central Insurance Co. Ltd. v. Central Board of Revenue 1993 SCM R 1232 contends that the C.B.R. Would not be having any jurisdiction to interpret the law and that it would be for the adjudicating authority to decide the matter after hearing the petitioner.
2. No one has turned up for the respondents who are proceeded against ex parte.
3. I have given some thought to the contentions of the learned counsel, and I find myself in agreement. In the said case of Central Insurance Company, the Hon'ble Supreme Court has laid down that the C.B.R. Would not be having lawful authority to interpret the law and it would be for the forums empowered to adjudicate upon the matters arising under the said Ordinance who will be deciding the case before them in accordance with law.
4. This writ petition accordingly is allowed and order, dated 20-12-1997 of respondent No.3 is declared to be without lawful authority and accordingly is set aside. The result would be that the application filed by the petitioner shall be deemed to be pending before the said officer who shall decide the same in accordance with law after hearing the petitioner, independently of the said C.B.R. Letter.
5. A copy of this order be immediately remitted to respondents Nos.2 and 3 by the office. .