' A tax known as Corporate Assets Tax was levied through section 12 of the Finance Act, 1991.
Subsection (1) of section 12 being the charging provision, provided for levy of the said tax in respect of assets held by a company on the specified date, of the value and in the manner specified in the section. Subsections (2) and (3) of section 12 required filing of a return by a company in the prescribed manner within six months of the specified date which, according to the definition clause
(b) of section 12 meant the date for which the balance-sheet was drawn. However, that date was not to be any date preceding the 30th June, 1991 or following the 30th day of June, 1992. In case of failure on the part of company to file return, subsection (4) of section 12 empowered the Wealth Tax Officer to require such company by notice in writing to furnish a return within 30 days from the service of such notice. Also subsection (5) required the company liable to pay the prescribed tax alongwith the return.
2. Subsection (6) of section 12 vested power in the Wealth Tax Officer to make an order in writing and thereby to determine the tax payable. Once it was so done the subsection required the Wealth Tax Officer to serve a notice of demand upon the company specifying the sum payable and the time within which it was to be paid. In case a company failed to furnish the return within the time allowed for that purpose according to subsection (7) the Wealth Tax Officer was competent to impose upon such company a penalty of rupees one thousand for every day during which the default continued. Likewise subsection (8) required that the company shall be liable to pay additional tax at the rate of twenty per cent per annum on the amount not paid or short paid.
3. Subsections (9) and (10) of section 12 of the Finance Act, 1991 provided for application of section 32 (mode of recovery), section 23 (appeal to the Appellate Additional Commissioner from the orders of the Deputy Commissioner), section 24 (appeal to the appellate Tribunal), section 25 (powers of Commissioner to revise orders of the subordinate authorities) and section 35 (rectification of mistakes) of the Wealth Tax Act to the proceedings for collection of Corporate Assets Tax as they applied to the collection of Wealth Tax under the Wealth Tax Act. Subsection (11) of section 12 stated the amount of tax payable under that section while subsection (12) thereof defined inter alia the words "Company", "Specified dated" "Tax" "value of assets" and the Wealth Tax Officer.
4. The petitioner is a public limited company and an assessee of the Income Tax Department. It is stated that the last date for filing of return under section 12(2) of the Act in the case of the company was 30-6-1992. On its failure to have filed such return it was served with a notice under section 12(4) of the Finance Act for filing of return by 14-4-1994. Thereafter three other notices were issued on 18-4-1994, 24-10-1995 and 10-11-1998. After issuance of the last notice, the respondent/Wealth Tax Officer passed an assessment order on 4-2-1999 raising a demand of Rs,86,23,411. Out of this demand the Corporate assets tax was determined at Rs,20,00,000 only. The balance being the amount of penalty at Rs,28,61,000 and additional tax for the alleged default for period 1-4-1992 to 31-1-1999 at Rs,37,62,411.
5. The appeal filed by the petitioner failed before the First Appellate Authority on 2-4-2001. However, the appeal against the First Appellate order partly succeeded when a Division Bench of the Income Tax Appellate Tribunal though maintained levy of tax as aforesaid yet the penalties and additional tax were directed to be deleted. Since no further appeal under section 12 of the Finance Act, 1991 was made available nor the appeal provisions of Wealth Tax Act were made applicable to these proceedings, the petitioner has approached this Court in Constitutional jurisdiction on main ground being that the order of assessment could have been made within a reasonable time and the Wealth Tax Officer having made that order after a lapse of almost 8 years from the date on which the company was liable to file return and five years of issuance of notice under section 12(4), dated 6-4-1994 is a nullity in law.
6. Heard the learned counsel for the parties. It is an admitted position that neither section 12 of Finance Act, 1991 nor the provisions of Wealth Tax Act, 1963 provide for a time frame for service of a notice under section 12(4) or framing of an assessment under section 12(6) of Finance Act, 1991.
Both the parties however, agree that in view of subsections (9) and (10) of section 12, the provisions of Wealth Tax Act, 1963 with regard to collection, appeal, revision and rectification of orders are applicable to the proceedings for assessment and collection of Corporate Assets Tax.
7. Learned counsel for the petitioner however, insists that since the Wealth Tax Officer has been entrusted with the job the levy and collect the Corporate Assets Tax as wealth tax, the provisions in the Wealth Tax Act providing for a time frame for service of notices as well as framing of assessm ents under Wealth Tax Act are applicable to these proceedings. A specific reference is made to subsection (1) of section 17 providing for service of a notice within five years of the end of that assessm ent year. Subsection (2) of section 17-A is also referred to wherein a time limit of two years for completion of assessm ent starting from the end of the assessment year in which such notice was served has been prescribed.
8. According to the learned counsel for the petitioner, absence of a time limit in section 12 of the Finance Act, 1991 does not mean that a Wealth Tax Officer is competent either to serve a notice upon the assessee all times to come after accrual of the last date prescribed in the Act viz 30-6- 1992 nor he is competent to sit on a case and frame assessment years after service of a notice. His main stress being on the fact that in absence of a time limit in the statute act contemplated must be performed by the executive/Revenue authorities within a reasonable time. In support of his submission that issuance of a notice after almost five years of the due date and framing of an assessm ent after eight years of that date cannot in any manner be said to have been done within a reasonable time, learned counsel relies upon a judgment reported as re: K.P. Narayanappa Setty & Co. v. Commissioner of Income Tax A.P. (1989 PTD 1333). In that case the Hon'ble Judges of the Andhra Pradesh found the imposition of a penalty under the provisions of late Income Tax Act, 1922 after a period of nine years to be beyond reasonable time. Therefore, their Lordships returned a negative answer to the reference in which the question proposed being if in the facts and circumstances of the case any penalty was exigible in assessee's case for the assessment year 1946-47. The assessee in that case was assessed to a certain amount of income-tax and the assessm ent so framed became final on July 24, 1947. However, subsequently an order imposing penalty was made on July, 1963. Their Lordships agreed that although no period for imposition of penalty was fixed in the Act, yet it had to be levied within a reasonable time.
9. Learned counsel for the Revenue however, opposes an interference with the impugned order in exercise of Constitutional jurisdiction for three reasons. Firstly, that the remedies provided under law having been completely exhausted, no case for exercise of Constitutional jurisdiction is made out. Secondly, that the case relied upon is distinguishable for a number of reasons including the fact that in the case in hand it is the basic levy and not a penalty or additional tax which is being challenged. Thirdly that the provisions .Of section 12 of the Finance Act do not provide either for a time limit or that the levy shall be made within a reasonable time. Therefore, only those provisions of Wealth Tax Act can be read into or be invoked which have specifically been made applicable to the levy and recovery of Corporate Assets Tax and none other.
10. After hearing the learned counsel for the parties, I am inclined to allow the submissions made for the Revenue, Mr. Muhammad Ilyas Khan, Advocate, learned counsel for the Revenue is right in pointing out that the exercise of Constitutional jurisdiction cannot be a substitute for appeal or revision provisions in a statute. Where law does not provide for appeal or revision to this Court, the provisions of Article 199 cannot be read into that statute to fill in the gap. In Constitutional jurisdiction only a jurisdictional fact can be challenged on the touchstone of various guarantees enumerated in the Constitution itself. In the present petition it is not denied that the Assessing Officer had the jurisdiction to frame the assessment order which has been questioned. The only grievance is that the assessm ent order was framed with an inordinate delay. The vital I question therefore, being if an authority competent to make an order ceases to remain so far the mere reason that a considerable time had passed after the tax had become due or the fact that the notice was issued to the party some 3/4 years earlier to the framing of the order. Obviously this question will arise only where the statute as in the present case, is silent on the issue of limitation both for service of notice or framing of ' an order.
11. The legislature in its wisdom provided two appeals against the order of Wealth Tax Officer. These rights were allowed to the assessee with reference to certain provisions of the Wealth Tax Act, as detailed in earlier part of this order. It will be noted that in matters arising out of the Wealth Tax Act till the time of its repeal this Court was a Court of appeal against the orders of the Tribunal recorded under section 24 of the Act. It may also be noted that section 29 of the repealed Wealth Tax Act, further provided an appeal to the Hon'ble Supreme Court of Pakistan against the orders recorded by this Court under section 27 of that Act. The exclusion of these provisions in section 12 subsections (9) and (10) of the Finance Act, 1991 appears complete and absolute. These provisions accordingly cannot either be read into or be made applicable to the proceedings for levy or collection of corporate assets tax merely for the reason that the order of the Tribunal in Wealth Tax matters can be carried to this Court by way of an appeal or that a Wealth Tax Officer has been assigned the job to make an assessment and to recover the levy in the manner the wealth tax is collected.
12. Just as the appeal provisions of the Wealth Tax Act cannot be read into section 12 of the said Finance Act, the provisions of section 17 and 17-A of Wealth Tax Act prescribing various limitations for service of notice or framing of assessments also cannot be read into the provisions of section 12.
13. Learned counsel for the Revenue is also right in pointing out that in absence of a condition for levy of tax within a reasonable time any delay on the part of the Assessing Officer cannot deprive the Revenue of its legitimate dues. It will also be seen that the judgment relied upon the issue pertains to the levy of penalty which was primarily based upon an assessment order which stood completed many years ago. It was not the levy itself which was striked down by their Lordships on the basis of an inordinate delay. A levy whereever attracted does not become barred by limitation unless it is so provided in the statute imposing the levy. The bar of limitation as such is not attracted in the matters of collection of revenue. It is of that reason that most of the taxing statutes in the present day would, including Pakistan, provide for a time limit both for charge as well as collection so that the citizens can feel certain that after a specified time the Revenue Collector cannot touch their pocket. However, where no such limitation has been prescribed, for a Court it would amount to legislate that any length of time however long is settled or fixed after which a levy would not be enforceable. The law of limitation proceeds on the primary concept that it does not extinguish a right. It only bars a remedy. In revenue matters as 'well, failure to raise a demand within a stipulated period does not extinguish the levy unless so provided in law. All such bars of limitation only restrain the State from enforcing a levy against 'a citizen without affecting the legality or chargeability of the levy. The rationale remains the same. It is that a citizen should be clear in his mind that after a certain period even if he was liable to pay, the State cannot enforce the levy against him. It would be interesting to guess if a conscientious grandson comes forward to pay the taxes which his grandfather should have paid many years ago but which escaped the eye of the tax collector. Will the State refuse to accept that money which the gentleman offers on the ground that it was due to it? The position of a time-barred debt between two individuals is exactly the same. The parallels are not farfetched.
14. For the sake of discussion if one goes for the option. To lay down some length of time which is reasonable and beyond that it would not be reasonable to frame an assessment, the void is too open to be reduced down to a certainty. Then in different kinds of taxes different lengths of time may be needed to answer the peculiar nature of the levy. Income tax and wealth tax being perennial levies stand separately from Sales Tax Customs and Excise Duty etc. Which accrue on the basis of a kind of transaction.. Where the respective statutes do not provide of a time limit for enforcement of levy, will a period of three years for the former and two years for the latter be a reasonable period? Why it should not be vice-versa? Why not there be a shorter or a longer length of time? None of these questions can possibly be answered if we venture to settle a definite period to declare the charge of levy to be barred by limitation.
15. Finally I am not persuaded to interfere in Constitutional jurisdiction for another reason. It is the fact that levy in question is a one time levy. Its vires remained under litigation before the superior Court for considerable period. Therefore, the Revenue in the meantime was not positive as to its application. The issue with regard to status of work in progress for its inclusion in the value of assets held by a company also remained a subject-matter of litigation before the Courts and the Tribunal. Even Central Board of Revenue in view of different judgments remained indecisive as to the exact nature of the levy and its significance. A number of circulars issued on the subject can be referred to in that regard.
16. Accordingly for what has been said above, no case for interference in Constitutional jurisdiction having been made out with the impugned order recorded by the Revenue as well as the Tribunal, this petition shall be dismissed.