-Statutory powers of adjudication

Citation Name : 2019 PTD 353 LAHORE-HIGH-COURT-LAHORE
Side Appellant : GULISTAN TEXTILE MILLS LIMITED
Side Opponent : FEDERATION OF PAKISTAN
TAX statute---Statutory powers of adjudication----Overlap of such powers---Scope---Mere fact that a power had been conferred on an officer to initiate an action in respect of recovery of TAX did not, ipso facto, mean that such was the only power which could be exercised and no other power or jurisdiction could be exercised to effect recovery of such a TAX ---Powers which vested in different authorities were not mutually destructive but complementary to each other and unless the Legislature clearly provided to the contrary, such powers could be exercised without prejudice to any other power conferred under the LAW .

Citation Name : 2019 PTD 353 LAHORE-HIGH-COURT-LAHORE
Side Appellant : GULISTAN TEXTILE MILLS LIMITED
Side Opponent : FEDERATION OF PAKISTAN
Ss.32 & 179---Interpretation of Ss.32 & 179 of Customs Act, 1969---Recovery of Income TAX and Sales TAX by Customs officer(s)---Powers of adjudication under the Customs Act, 1969---Interpretation of Ss. 32 & 179 of the Customs Act, 1969---Expansion in powers of adjudication of Customs officer(s) in respect of Income TAX and Sales TAX liability of importers ----Scope--- Petitioners / importers impugned show-cause notice under S. 32 of the Customs Act, 1969 for recovery of Income TAX and Sales TAX ---Contention of petitioners, inter alia, was that Collectorate of Customs (Adjudication) did not have the jurisdiction to decide liability of the petitioners in respect of payment of any amount of sales or income TAX as said amounts could only be recovered by initiating proceedings under the respective LAW s under which they had been imposed---Validity---Statutory amendments whereby word "TAX es" was inserted first in S. 179 and subsequently in S. 32 of the Customs Act, 1969 were to be taken as reasoned and deliberative policy making by the Legislature and could not be ignored---Said words had been woven in the fabric of the Customs Act, 1969 to achieve a purpose and Court must interpret same words in such a manner so as to give effect to the purpose and policy underlying such amendments----Under said amendments power of adjudication was materially expanded not only to include the power of recovery of customs duty but also other "TAX es"---Said provisions were amended in such a way that the word "TAX es" was added so as to confer jurisdiction on the officers of Customs for making adjudication in respect of TAX es which had been levied or had been short-levied and officers of Customs, therefore, acted as the collecting agents for the income TAX and sales TAX authorities from every importer of goods on the value of goods at rate(s) specified---Constitutional petitions were dismissed, in circumstances.

Citation Name : 2019 PTD 60 LAHORE-HIGH-COURT-LAHORE
Side Appellant : STARLET INNOVATIONS (PVT.) LTD.
Side Opponent : FEDERATION OF PAKISTAN
Ss. 177, 169(3), 154,120, 115(4) & 114---Presumptive TAX regime---TAX -payer filing statement in terms of S. 115(4) of the Income TAX Ordinance, 2001---Question as to whether accounts of such person could be audited---Petitioner/TAX -payer contended that he had filed a statement under S. 115(4) of the Ordinance which would constitute "full and final discharge of its TAX liability", therefore, he was neither required to file a return of income under S. 114 of the Income TAX Ordinance, 2001 nor its accounts could be audited under the provisions of S. 177 of the Ordinance---Validity---Petitioner had not referred to any provision, including S. 177 of the Ordinance, which prohibited the conduct of audit in the case of an TAX -payer who had filed a statement under S. 115 and not a return of income under S. 114 of the Ordinance, therefore, any challenge on such basis was without any LAW ful justification and the impugned notices could not be struck down being invalid and illegal---TAX -payer was an exporter and TAX required to be deducted was a final TAX under S. 154 of the Ordinance on the income from which it was deductible---Section 169(3) of the Ordinance was triggered, in the case of TAX -payer, and upon filing of the statement, assessment would be treated to have been made under S. 120 and would be taken to be an assessment order for the purposes of the Ordinance---TAX payer could not consider itself immune from the applicability of S. 177 of the Ordinance and beyond its mischief merely on the hypotheses that the TAX deductible under S. 154 was the final TAX on the income---Final TAX on the income of a person merely absolved that person of the obligation to file a return of income and no more ; the same did not follow that income TAX affairs of such person were no more prone to audit proceedings---For purpose of conducting audit, any person was liable to be proceeded against, irrespective of whether he filed a return under S. 114 or a statement in terms of S. 115 of the Ordinance---Constitutional petition was dismissed accordingly.

Citation Name : 2019 CLD 578 LAHORE-HIGH-COURT-LAHORE
Side Appellant : PAKISTAN MOBILE COMMUNICATION LIMITED
Side Opponent : ABRAR AHMED
Regln. 1---BTS Tower Policy, 2013 [issued by the Punjab Local Government & Community Development Department through Notification No.SOTAX (LG) 3-4/03 (P-111) dated 12.08.2013], Clause 4---[Punjab] Environmental Protection Act (XXXIV of 1997), S. 12---Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, Reglns. 3 & 4 & Scheds. I & II---Punjab Environmental Protection Base Transceiver Station (BTS) Regulations, 2012 ('the 2012 Regulations') and 'BTS Tower Policy, 2013'---No retrospective effect---Base Transceiver Station (BTS) tower erected by a cellular company ('the appellant')---Requirement of obtaining NOC from Environment Protection Agency (EPA)---Admittedly the BTS Tower in question was installed by the apellant and functional since the year 2005---Regulations of 2012 were made by the Environment Protection Agency (EPA) in the year 2012 and the BTS Tower Policy in the year 2013 which were not applicable to the BTS tower of the appellant because they could not be of retrospective effect---In the BTS Tower Policy, 2013 it was mentioned in Clause-4 that for the already installed BTS Towers, the cellular company shall have to bring it in conformity with technical specification provided in the same and in such regard the appellant had already filed application to the concerned EPA---Installation of BTS tower did not fall in Schedule I read with Regulation 3 or Schedule II read with Regln. 4 of the Pakistan Environmental Protection Agency Review of Initial Environmental Examination and Environmental Impact Assessment Regulations, 2000, therefore, there was no requirement at the relevant time for the appellant to seek NOC from the EPA for installation of BTS tower---Appellant had now at present stage filed an application to the EPA along with all the requirements including fee etc. for NOC which was still pending---Single Judge had erred in LAW while holding that the appellant's tower lacked the requirements of the BTS Tower Policy, 2013---High Court directed that the EPA was to process the said application and decide the same within a period of two weeks positively; that in case of being aggrieved by the order likely to be passed by the EPA, either party, had the remedy of appeal under the [Punjab] Environmental Protection Act, 1997---Intra-court appeal was allowed accordingly.

Citation Name : 2019 PLD 382 LAHORE-HIGH-COURT-LAHORE
Side Appellant : IKHLAQ-E-MADINA TOURS AND TRAVELS PRIVATE LIMITED
Side Opponent : FEDERATION OF PAKISTAN through Secretary Ministry of Religious Affairs and Interfaith Harmony, Islamabad
Quota of pilgrims---Old and new Hajj Group Organizer Companies ("HGOs")---Separate criteria for assessment---No discrimination---Petitioners challenged the Hajj Policy and Plan 2019 ("Hajj Policy 2019") on the ground that they had not been issued a quota of pilgrims despite the fact that they were Hajj Group Organizer Companies ("HGOs") who were duly enrolled and entitled to the quota of pilgrims for Hajj 2019; that Hajj Policy 2019 was illegal and arbitrary because it did not equally distribute the quota of pilgrims for Hajj 2019; that on the basis of the criteria set out in the Hajj Policy 2019 the petitioners were discriminated against as they did not have the requisite experience of conducting Hajj, hence they would never be eligible since this was the primary criteria, and that the petitioners faced discrimination as the relevant authorities were still maintaining old HGOs and new HGOs list, such that the new were considered against a 2% quota only---Held, that criteria for Assessment of Profiles of new HGOs was placed before the High Court for assessment of new profiles and as per the criteria it was based on the judgment of the Supreme Court of Pakistan in Dossani Travels Pvt. Ltd. and others v. Messrs Travels Shop (Pvt.) Ltd. and others (PLD 2014 SC 1) ("Dossani Travels Case")---On the basis of said criteria for new HGOs a merit list had been made which provided for the name of the HGO, the Province from which it was applying, year of its incorporation, year of its TAX return filing, year of Securities and Exchange Commission of Pakistan (SECP) filings and experience in carrying out Umrah---On the basis of the marks obtained in these categories, the overall marks set out the merit---In terms of the merit list provided, the cases of the petitioners had been considered and their names were duly incorporated in the merit list---However, for the purposes of the allocation of quota of pilgrims to new HGOs, the first 35 HGOs had been selected as the quota was satisfied till Serial No.35---With reference to old HGOs a criteria had also been provided to ensure that they met the given standards---Old HGOs were the HGOs who were providing Hajj services, hence were scrutinized considering their past Hajj services---New HGOs were those who had never carried out Hajj services yet were considered on the basis of Umrah services---Such distinction did not suggest discrimination rather showed that a thought through process had been put in place to consider all HGOs favourably---Ministry of Hajj in 2019, reserved an additional 5000 Hajj quota for allocation to newly enrolled HGOs in compliance of the order of (Islamabad) High Court and against another quota as promised by the Saudi King, which would give newly approved HGOs the opportunity to be issued Hajj quotas---In terms of the criteria set out for old and new HGOs, there appeared to be no arbitrariness or randomness in the selection process---Hajj Policy 2019 provided for a Hajj Policy Formulation Committee ('the Committee') which included Secretary, Ministry of Religious Affairs as Chairman, representative from the office of the Attorney General for Pakistan, from the Ministry of Foreign Affairs, and Ministry of LAW and Justice and representative from the Competition Commission of Pakistan---Bare look at the members who sat in the Committee showed that it was an impartial Committee comprising of a diverse set of members who formulated the Hajj Policy 2019 and the criteria for allocation of Hajj quota---Hajj Policy 2019 was approved by the Cabinet whereafter the quota allocation process was started---Petitioners along with other HGOs were all duly considered, on the basis of which a merit list was made---Assessment was made by engaging a third party, which was a well reputed Chartered Accountant, hence the question of favouritism and random picking of HGOs had no force---Hajj Policy 2019 and quota allocated thereunder was in compliance with the pronouncement of the Supreme Court especially the "Dossani Travels Case"---Fact that every HGO could not be accommodated while allocating Hajj quota did not tantamount to discrimination and the fact that petitioners (HGOs) had not been given Hajj quota also did not suggest discrimination---High Court directed that any grievances of the petitioners regarding selection of HGOs contrary to the criteria could be raised before the Committee, and in the event that such applications were filed before the Committee, the same shall be decided expeditiously so as to prevent any disturbance in the allocation of Hajj quota---Constitutional petition challenging the Hajj Policy 2019 was dismissed accordingly.

Citation Name : 2019 PCrLJN 23 LAHORE-HIGH-COURT-LAHORE
Side Appellant : SAEED AHMAD
Side Opponent : ADDITIONAL SESSIONS JUDGE
Ss. 22-A, 22-B & 154---Order by Justice of Peace to register criminal case, powers of---Petitioner had impugned order of Justice of Peace, whereby SHO concerned was directed to receive version advanced by respondent in accordance with provisions of S.154, Cr.P.C., which was being construed as a step preparatory to registration of a criminal case---Validity---High Court observed that exposing a person to investigative process and face rigors of criminal prosecution, was no small measure, there must exist reasonable and tangible material with evidential basis to set LAW into motion so as to bring about an indictment---In the present case, ten persons were likely to face the consequences against solitary tenderness and swelling, viewed by the Medical Officer with suspicion---Registration of criminal case and investigation consequent thereon would be abuse of process of LAW , casting hardship on the proposed accused---Authority to be exercised by the Justice of Peace was to advance the ends of justice and for the sake of a person, wronged in the face of administrative injustice/inaction; it could not be invoked for purposes incompatible therewith---Exaggerated accusations, casting wider net upon the opponents, needed to be quashed in the bud instead of TAX ing upon public time and resource---Justice of Peace, in the present case, lost sight of said aspects---Intervention in equity was most conscionable---Constitutional petition was allowed and impugned order passed by Justice of Peace was set aside, in circumstances.

Citation Name : 2019 PTD 2288 KARACHI-HIGH-COURT-SINDH
Side Appellant : PFIZER LABORATORIES LTD.
Side Opponent : The COMMISSIONER OF INCOME TAX, COS-II, KARACHI
Ss. 79 & 136---Income from transactions with non- resident---Prerequisites for application of S. 79 of the Income TAX Ordinance, 1979---Transfer pricing---'Arms length transaction'---Scope----Question before High Court was whether additions made to income of TAX payer, which was a pharmaceutical company, under S. 79 of the Income TAX Ordinance, 1979 on basis of its import of raw materials from its parent company, were in accordance with LAW ---Contention of Department inter alia, was that such practice tantamount to transfer pricing by way of which profits were transferred to parent company by TAX payer, therefore invocation of S. 79 of the Income TAX Ordinance, 1979 was justifiable---Validity--Assessing Officer, in the present case, compared price of imported raw materials of TAX payer, which TAX payer imported from its parent company, with raw materials imported by other companies from other sources and thereafter made additions in respect of imported price of raw materials---Difference between import prices was tabulated without any justification or details about other factors required for necessary comparison in order to justify additions under S. 79 of the Income TAX Ordinance ,1979---Onus lay on Department to prove an 'arms length transaction', and simply observing that some other companies imported a particular raw material was not sufficient to establish transfer pricing or to justify the invocation of S. 79 of the Income TAX Ordinance, 1979 --- Additions made to the income of the TAX payer were therefore not in accordance with LAW --Reference was answered accordingly.

Citation Name : 2019 PTD 2209 KARACHI-HIGH-COURT-SINDH
Side Appellant : GETZ PHARMA (PVT.) LIMITED
Side Opponent : FEDERATION OF PAKISTAN
"Casus omissus", principle of---Applicability---Scope---Per principle of casus omissus a matter which should have been, but had not been provided for in a statute could not be supplied by Courts, as to do so will be legislation and not construction---Casus Omissus can, in no case, be supplied by court of LAW as that would amount to altering a provision---While interpreting a penal or TAX ing statute, Courts must look to words of a statute and interpret them in light of what was clearly expressed and it could not imply anything which was not expressed and it could not import provisions in a statute so as to support an assumed deficiency--Statute was an edict of Legislature and the conventional way of interpreting or construing a statute was to seek "intention" of its maker---Statutory provision, if open to more than one interpretation, then the Court had to choose that interpretation which represented true intention of the Legislature as the function of the court was only to expound and not to legislate.

Citation Name : 2019 PTD 2021 KARACHI-HIGH-COURT-SINDH
Side Appellant : K-ELECTRIC LIMITED
Side Opponent : FEDERATION OF PAKISTAN through Secretary to the Government of Pakistan
S.202---Duty and TAX liability before privatization of company---Recovery---Petitioner company was privatized by Government and was aggrieved of recovery proceedings by authorities for TAX es and duties incurred prior to its privatization---Validity---Long outstanding liability towards duty and TAX es against petitioner were acquired during privatization and its payment was deferred on one pretext or other---Petitioner could not obtain any waiver or relaxation of amount of admitted liability of customs duty from competent authority---Authorities LAW fully created demand of customs duty and sales TAX against predecessor of petitioner company in year 1998 and same could not be recovered from petitioner who acquired all assets and liabilities at time of privatization in year 2005---High Court declined to interfere in exercise of Constitutional jurisdiction as there was no justification for non-payment of long outstanding TAX liability which could not be waived through decision of Economic Coordination Committee or any executive order---Constitutional petition was dismissed in circumstances.

Citation Name : 2019 PTD 1858 KARACHI-HIGH-COURT-SINDH
Side Appellant : ASHRAFI BREAD INDUSTRIES
Side Opponent : FEDERATION OF PAKISTAN
Ss. 13, 3, 2(41) & Sixth Sched.---S.R.O. No. 509(I)/2013 dated 12-06-2013---Exemption---Scope of sales TAX ---TAX able supply---Scope---Person who enjoys exemption in terms of S. 13 read with Sixth Schedule of Sales TAX Act, 1990 and does not make any TAX able supply in terms of S. 2(41), Sales TAX Act, 1990 is not required to be charged further TAX and extra sales TAX in terms of S. 3(1A) and S.R.O. No. 509(I)/2013 dated 12-06-2013---Purpose of levying extra TAX , in addition to the TAX under subsection (1) of S. 3 of Sales TAX Act, 1990 is to charge the said TAX from those persons who are liable to be registered under Sales TAX Act, 1990 but have chosen not to get themselves registered to avoid payment of sales TAX in accordance with LAW ---Legislature in its wisdom has chosen to exempt the supplies from payment of sales TAX ---Manufacturer cannot be made liable to pay any further TAX or extra TAX only on account of his non-registration under Sales TAX Act, 1990---Words used in S. 13(2)(a) of Sales TAX Act, 1990 are very specific and provide for exemption of any TAX able import or supply of any goods from the whole or any part of the sales TAX chargeable under the Sales TAX Act, 1990 and not merely under S. 3(1) of Sales TAX Act, 1990---Section 13 of Sales TAX Act, 1990 has an overriding effect on the chargeability of sales TAX in terms of S. 3(1) as well as S. 3(1)(a) of Sales TAX Act, 1990---Section 3 of Sales TAX Act, 1990 can only be invoked in respect of goods which are being charged sales TAX .