PLJ 2003
Present: SHAHZAD AKBAR KHAN AND
IJAZ-UL-HASSAN, JJ.
Dr. NAJIBULLAH KHAN-Petitioner
versus
FEDERATION OF PAKISTAN, through the SECRETARY, MINISTRY OF FINANCE, GOVERNMENT OF PAKISTAN, ISLAMABAD and 4 others-Respondents
W.P. No. 686 of 2000,
decided on 30.6.2003.
(i) Constitution of
—T-Art. 199-Respondent's plea, that constitutional petition was pre-mature as no final order has been passed and only a letter has been issued and that petitioner having purchased certificates in question, of his own without compulsion, doctrine of promissory estoppel would come into his way, was misconceived and does not hold field-Impugned deduction was declared to as against the provisions of constitution and being without lawful authority would have no effect. [P. 282] C
(ii) Income Tax Ordinance, 1979 (XXXI of 1979)
--—-S. 129-Constitution of
(iii) Provincially Administered Tribal Areas, Regulation No. 1 of 1970--
—Para 4-Income Tax Ordinance (XXXI of
1979), Preamble-Constitution of
1993 SCMR 1232 ref.
Mian Gul Hassan Aurangzeb, Advocate for Petitioner. Mr. Bid Muhammad Khattak, Advocate for Respondent No. 5. Mr. Salah-ud-Din Khan, D.A.G. for Respondents Nos. 1 to 4. Date of hearing : 28.5.2003.
JUDGMENT
Ijaz-ul-Hassan, J.-Dr. Najibullah Khan, petitioner has filed instant Writ Petition No. 686/2000 under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 for declaring Central Board of Revenue's letter C. No. 1(19) WHT/91, dated May 04, 2000 and the Central Directorate of National Savings letter No. F.8 (2) S-l/Cert/98 dated May 9, 2000 as without lawful authority and of no legal effect, with prayer that the National Saving Center, Mingora be directed to reverse the entries of deduction of withholding tax and the amount so far deducted be credited to the accounts of the customers.
2.
The National Saving Center throughout
3. Barrister Mian Gul Hassan Aurangzeb, learned counsel for the petitioner assailed the legality of deduction of income tax/withholding tax on the monthly income accrued to the petitioner on the Regular Income Certificates owned by him and vehemently contended that Income Tax Ordinance, 1979 having not been extended to PATA in the manner required and in compliance of Article 247 of the Constitution, the impugned deduction is violative of the Constitution and cannot be allowed to remain intact. The learned counsel added that the letters in question issued in this respect by Central Board of Revenue Islamabad are without authority and of no legal effect. He submitted that the National Saving Center, Mingora, be directed to reverse the entries of deduction of withholding tax and the amount so far deducted be credited to the accounts of the customers. To augment the contentions, he placed reliance on the following citations :--
(i) M/S Gul Cooking Oil and Vegetable Ghee (Pvt.) Ltd. vs. Pakistan through Secretary, Ministry of Finance, Government of Pakistan, Islamabad and others (2000 PLR 385 Peshawar).
(ii) Messrs Lucky Cement Limited vs.
The Central Board of Revenue
and others (PLD 2001
(iii) Ghilaf
Gul vs. Commissioner of Income Tax/Wealth Tax, Zone-B,
(iv) M/S Central Insurance Co. and others
vs. The Central Board of Revenue,
(v) F.S. Tobacco Company (Pvt.) Ltd. vs. Superintendent, Central Excise and Sales Tax Nowshera and 4 others (1995 PTD 874 Peshawar).
4. Mr. Salahuddin Khan, learned
Deputy Attorney General, appearing on behalf of the Federal Government supported the action of Central Board of Revenue Islamabad and attempted to
argue that entire transaction having
taken place between
the parties at
Islamabad, respondents are quite justified to deduct withholding
tax from the income of the petitioner and
the observation contained in impugned letters is in no manner violative of
the provisions of the
Constitution, infringing the fundamental or legitimate right of the petitioner.
The learned counsel also challenged
the maintainability of the writ petition and reiterated that alternate
remedy provided under Section 129 of the Income Tax Ordinance, 1979 having not been availed,
the petition is not maintainable. To
substantiate the plea he relied on an
unreported judgment of august Supreme
Court of Pakistan passed in case captioned Dr. Hafiz Sher
Badshah vs. Income Tax Officer, Circle-H Mardan and 2
others (Civil Petition No. 359-Pof2002).
5. There appears to be no controversy between the
parties that petitioner is a bona
fide resident of District Swat which comes within the Provincially Administered Tribal Areas
(hereinafter referred to as PATA) and
the National Saving Center throughout
6. By Regulation No. 1 of 1969, issued by the
Administrator of Martial Law, .Zone-A,
the Administration of the territories of the former states of Dir, Chitral
and Swat was taken away from their respective rulers and was assumed by the then Government of West
Pakistan. Paragraph 6 of the said
Regulation authorised the Provincial Government to constitute
the territories falling in the former
States of Dir, Chitral and Swat into such administrative
units as it deemed fit. In exercise of this power the Provincial Government divided the territories so coming under
its administrative control into districts
and made them part of the Malakand Division. The
The Governor of the province, with the
approval of the President, made a number
of Regulations, beginning with Regulation No. 1 of 1970, whereby a number of statutes which were in force in the
other parts of the
7. Article 247 of the Constitution makes provision for the administration of the tribal areas. The relevant portion of Article 247 reads :--
"247. Administration of Tribal Areas.
(1)
(2)
(3) No Act of Majlis-i-Shoora (Parliament) shall apply to any Federally Administered Tribal Area or to any part thereof, unless the President so directs, and no Act of Majlis-i-Shoora (Parliament) or a Provincial Assembly shall apply to a Provincially Administered Tribal Area, or to any part thereof, unless the Governor of the Province in which the Tribal Area is situate, with the approval of the President, so directs; and in giving such a direction with respect to any law, the President or as the case may, the Governor, may direct that the law shall, in its application to a Tribal Area, or to a specified part thereof, have effect subject to such exceptions and modifications as may be specified in the direction.
(4) _________________________
(5)___________________________
(6)______________________________
(7)
8.
We have heard at length the rival contentions of learned
counsel for
the parties in the light of the material available on the record and the judgments cited at the
bar.
9.
It should not take us long to agree with learned counsel
for the petitioner
that the Income Tax Ordinance, 1979, having not been extended and applied to PATA
by the Governor of N.W.F.P. with the approval of the President, the
deduction of income tax/withholding tax by the National Saving Center, Mingora, from the income accrued to the petitioner and
other customers
on the Regular Income Certificates is against the Constitution, thus, without
lawful authority and of no legal effect. Deduction of income tax/withholding tax
cannot be lawfully made by the National Saving Center Mingora, on a mere
observation/interpretation of the provisions of Income Tax Ordinance, 1979,
by the Central Board of Revenue eont^eu in mpugned letter C.No. 1 (19) WHT/91, dated May 04, 2000. It has been contended with
justification that the petitioner is exempt from payment of income tax/witholding
tax because the very Income Tax Ordinance, 1979, is not at all applicable to PATA where the income is derived by the
petitioner who, is a domiciled resident of PATA.
10. Adverting to the preliminary objection raised by
learned Deputy Attorney General that
the remedy of appeal having not been availed by the petitioner, instant constitutional petition is not
maintainable, we find that the
objection is misconceived. It is true that the jurisdiction under Article 199 of. the Constitution is to
be exercised where no other adequate remedy is available. Adequate remedy has also been defined to mean efficacious remedy in a number of judgments given by superior
Courts. In the instant case we find
that since Income Tax Ordinance, 1979 has not been extended to PATA, none of the provisions of the said
Ordinance can be made applicable by
any force of argument or any stretch of imagination to the assessees in PATA. In other words no provision of the Ordinance could
be invoked by or against the assessees thereat, and
therefore, the question of availing alternate remedy does not arise at all in
the first place. Since the dispute
between the parties is fiscal in nature the aggrieved party could directly
approach the superior Courts by invoking constitutional jurisdiction as observed in Messrs Central Insurance Co. and
others vs. The Central Board
of Revenue,
11. It has been asserted on behalf of the Federal Government that petition in hand is premature because no final order has been made and only letter has been issued and that the petitioner having purchased the Saving Certificates of his own without any compulsion, the doctrine of promissory estoppel comes into his way. The submission of the learned counsel does not hold the field. The judgment relied by the learned counsel proceeds on different facts and is of no help to respondents.
12. Resultantly, we accept the writ petition and declare the . impugned deduction, as against the provisions of the Constitution and being without lawful authority, would have no effect. The National Saving Center Mingora, shall reverse the entries of deduction of withholding tax and the amount so far deducted shall be credited to the account of the customers. We make no order as to costs.
(A.A.) Petition accepted.