C. P. NO. D-2384 / 2014
Present:
Mr. Justice Aqeel Ahmed Abbasi.
Mr. Justice Muhammad Junaid Ghaffar.
Muhammad Asim …………………………………………………… Petitioner
VERSUS
Federation of Pakistan & Others …………………………………. Respondents
Date of hearing: 13.06.2014
Date of order: 13.06.2014
Petitioner: Through Mr. Mushtaq Hussain Qazi Advocate.
Respondent No. 1 Mr. Ashfaq Rafiq Janjua Standing Counsel .
Respondent No. 2 to 5 Mr. S. Mohsin Imam Wasti Advocate along with
Mr. Azam Nafees, Inland Revenue Audit Officer.
O R D E R
Muhammad Junaid Ghaffar, J. Through instant petition the petitioner has impugned the Notice dated 21.4.2014 issued by respondent No. 4 (The Additional Director Intelligence & Investigation Inland Revenue) under Section 38 of the Sales Tax Act, 1990 on the ground that the respondent No. 4 has no jurisdiction to issue such notice either under the Sales Tax Act 1990 or in terms of SRO 775(I)/2011 dated 19.8.2011 (“SRO 775”).
2. Briefly the facts as stated in the Memo of Petition are that on 22.4.2014 at about 01.00 PM a team comprising officers of Directorate of Intelligence & Investigation, Inland Revenue, Karachi (Directorate of Intelligence “IR”) comprising of respondents No. 4 & 5 and other officers came to the petitioner’s office for obtaining record of the petitioner being maintained under the Sales Tax Act, 1990. The said visit / search was purportedly conducted on the basis of notice dated 21.4.2014 as aforesaid. Through instant petition the petitioner has impugned the said notice dated 21.4.2014 and all subsequent acts of the respondents on the ground that the respondents No. 4 & 5 have no jurisdiction in the matter.
3. Learned Counsel for the petitioner contended that officers of (Directorate of Intelligence “IR”) are not the officers of Inland Revenue and in terms of “SRO 775” they have no jurisdiction to either issue any notice or visit the premises of the petitioner in terms of Section 38 of the Sales Tax Act, 1990. In support of his contention the learned Counsel has relied upon the judgment of a Division Bench of this Court dated 20.3.2014 in the case of Waseem Ahmed & another V/S Federation of Pakistan & others C.P. No. D-2273/2011 and various other connected petitions. Learned Counsel has specifically referred to Para 62 of the said judgment and contended that since “SRO 775” has been declared to be ultra vires, therefore, the respondents have no jurisdiction in the matter.
4. Conversely, the learned Counsel for the respondents duly assisted by Mr. Azam Nafees, Audit Officer, Inland Revenue, contended that insofar as the jurisdiction of the officers of respondents is concerned, the same has already been decided by a Division Bench of this Court vide judgment dated 16.5.2012 in the case of Anfal Vs Deputy Director, Intelligence & Others C.P. No. D-1218/2012 and other connected petitions, whereby it has been held that the officers of the respondents i.e. Directorate of Intelligence & Investigation, FBR, are competent to make inquiries and investigation under the provisions of the Sales Tax Act, 1990. Learned Counsel further submitted that the decision of this Court as aforesaid was impugned before the Hon’ble Supreme Court by the petitioners, whereafter, the same was withdrawn as not pressed. Learned Counsel further submitted that instant petition is misconceived in law and facts, hence liable to be dismissed, whereas respondents may be allowed to proceed in the instant matter in accordance with law, including the adjudication of the case, as due to an interim order, the respondents have been restrained from proceeding any further in the matter.
5. We have heard both the learned Counsel and perused the record. The only ground being urged on behalf of the petitioner or which can be examined by this Court under Article 199 of the Constitution, in the instant matter is to the extent, that since the respondents have no jurisdiction in terms of “SRO 775” therefore, the action purportedly initiated in terms of Section 38 of the Sales Tax Act, 1990, is without any lawful authority and jurisdiction; hence no further proceedings initiated on the basis of documents and other material retrieved from the office of the petitioner can be sustained in law. The learned Counsel for the petitioner has specifically referred to Para 62 of the judgment dated 20.3.2014 passed by a learned Division Bench of this Court in the case of Waseem Ahmed & another V/S Federation of Pakistan & others C.P. No. D-2273/2011, wherein “SRO 775” has been declared as ultra vires, therefore, according to learned Counsel for petitioner, the respondents have no jurisdiction in the instant matter. However, it appears that the learned Counsel for the petitioner has lost sight of the fact that respondents No 4 & 5 are exercising jurisdiction in terms of SRO 776(I)/2011 dated 19.08.2011 (“SRO 776”) and not under “SRO 775”. The officers of (Directorate of Intelligence “IR”) have been conferred powers of the officers of Inland Revenue in terms of Section 30 & 30E of the Sales Tax Act, 1990 for certain specific provision of Sales Tax Act, 1990 which includes Section 38 ibid under which the impugned notice has been issued. It would be advantageous to reproduce “SRO 776” which is as follows:-
“GOVERNMENT OF PAKISTAN
FEDERAL BOARD OF REVENUE
(INLAND REVENUE)
Islamabad, the 19th August, 2011
NOTIFICATION
(SALES TAX)
S.R.O. 776 (I)2011- In exercise of the powers conferred by sections 30 and 30E of the Sales Tax Act, 1990 and in supersession of its Notification No. S.R.O. 56(I)/2010, dated the 2nd February, 2010 the Federal Board of Revenue is pleased to appoint the following officers of Directorate General Intelligence and Investigation, Inland Revenue, specified in column (2) of the Table below, to exercise powers of the offices specified in column (3) of the said Table and discharge such duties in relation to any case or cases of cases, falling under the provisions of the said Act, as specified in column (4) of that Table, namely:-
|
S.No. |
Designation of officer |
Designation of officer of Inland Revenue |
Provisions of the Sales Tax Act, 1990 |
|||
|
(1) |
(2) |
(3) |
(4) |
|||
|
1. |
Director General Intelligence and investigation Inland Revenue or Director Intelligence and Investigation Inland Revenue |
Chief Commissioner Inland Revenue or Commissioner Inland Revenue |
Sections 25, 25A, 25AA, 31, 32, 37, 37A, 37B, 38, 38A, 38B, 40, 45B, 46 and 47 |
|||
|
`2. |
Additional Director Intelligence and Investigation Inland Revenue |
Additional Commissioner Inland Revenue |
Sections 25, 25A, 31, 37, 37A, 37B, 38, 38B, 40, 45B, 46 and 47. |
|||
|
3. |
Deputy Director Intelligence and Investigation Inland Revenue or Assistant Director Intelligence and Investigation Inland Revenue |
Deputy Commissioner Inland Revenue or Assistant Commissioner Inland Revenue |
Sections 25, 25A, 31, 37, 37A, 37B, 38, 38B and 40 |
|||
|
4. |
Superintendent Intelligence and Investigation Inland Revenue or Intelligence and Investigation Inland Revenue Auditor Officer |
Superintendent Commissioner Inland Revenue or Commissioner Inland Revenue Audit Officer |
Sections 25, 25A and 37 |
|||
|
5. |
Deputy Superintendent Intelligence and Investigation Inland Revenue or Intelligence and Investigation Auditor Inland Revenue” |
Deputy Superintendent Inland Revenue or Auditor Inland Revenue |
Sections 25, 25A and 37 |
|||
6. From the perusal of the above SRO, it transpires that insofar as the contention of the learned Counsel for the petitioner that since “SRO 775” has been declared as ultra vires, the respondents have no jurisdiction in the instant matter is misconceived and is hereby repelled. In fact the respondents are exercising powers in terms of “SRO 776” and though in the judgment dated 20.03.2014 as aforesaid “SRO 776” has been declared to be invalid, but it has also been held that such invalidity merely meant that, as before SRO 48/2008 continued to effectively hold the field. It has been further held in the said judgment that notwithstanding the changes in Section 30 & 30A of the Sales Tax Act 1990, SRO 48/2008 continued to remain effective for all purposes and that the reference to the Directorate of Intelligence-FBR subsequently became a reference to the Directorate of Intelligence “Inland Revenue”. It has also been held that the officers of Directorate of Intelligence “IR” are duly authorized and empowered under SRO 48/2008 or any subsequent validly issued notification and all such acts are within the competence of the said officers. In nutshell, the overall effect of declaring “SRO 776” to be invalid does not have any material effect as to the jurisdiction being exercised by the respondents in the instant matter which stands continued to be within the four corners of law in terms of SRO 48/2008. For ease of reference the relevant portion of the said judgment at Para 62 is reproduced as under:-
“62. Accordingly, in light of the foregoing discussion and analysis, and subject to the last preceding paragraph, we dispose of these petitions in the following terms:
A. As to the jurisdiction point:
a. SRO 48/2008 is declared to have been validly issued and effective accordingly.
b. SRO 56/2010 is declared to be invalid, but its invalidity merely meant that SRO 48/2008 continued to effectively hold the field.
c. SRO 775/2011 is declared to be ultra vires the Sales Tax Act.
d. SRO 776/2011 is declared to be invalid, but its invalidity merely meant that, as before, SRO 48/2008 continued to effectively hold the field.
e. Notwithstanding the changes in Section 30 & 30A, SRO 48/2008 continued to remain effective for all purposes and it is declared that for the reasons as stated (i) the reference therein to officers of Sales Tax subsequently became a reference to officers of Inland Revenue, and (ii) the reference to the DG (I&I)-FBR subsequently became a reference to the DG (I&I)-IR.
f. Notwithstanding sub-paragraph (e), it would be appropriate if FBR, in supersession of previous notifications, issues a fresh notification under sections 30 and 30E that complies with both the required conditions, i.e. declares the offices of the DG (I&I)-IR “to be” offices of Inland Revenue (section 30) and establishes their jurisdiction, etc. in relation to specified provisions (section 30E).
B. As to registration of FIRs, submissions of challans and notices under section 37 in relation to the criminal cases:
g. The FIRs, and the challans submitted and notices issued on or before 30.6.2011 and any investigation carried out by or before that date were validly issued and undertaken by the offices of the DG (I&I)-FBR and within jurisdiction.
h. The challans submitted and notices issued on or after 1.7.2011 by offices of the DG (I&I)-FBR were irregular as this “Directorate General had ceased to be of relevance for the Sales Tax Act on and after that date, but for reasons stated such irregularity does not vitiate their validity nor invalidate any investigation or inquiry nor render defective or invalid any proceedings taken before the Special Judge by such offices.
i. All acts and proceedings with regard to the criminal cases (including by way of any further investigation) can now be done and / or continued only by offices of the DG (I&I)-IR, duly authorized and empowered under SRO 48/2008 or any subsequent validly issued notification. Reference herein below to “prosecution” shall thus mean and be references to the officers of the DG (I&I)-IR.
j. If at any time the Federal Government validly exercises its powers under section 37B(13), this paragraph 62 shall apply, mutatis mutandis, to the offices so notified.”
7. Similar view has been expressed by another division bench of this Court in the case of Anfal Vs Deputy Director, Intelligence & Others in CP No 1218/2012 and other connected petitions, vide judgment dated 16.05.2012, wherein the learned division bench has held that the officers of Directorate of Intelligence “IR” are competent to make inquiries and investigations under the provisions of the Sales Tax Act 1990.
8. In view of herein above, we are of the view that the access sought to the office of the petitioner by the respondents in terms of section 38 of the Sales Tax Act is lawful and within the jurisdiction and the competence of the respondents; hence the instant petition is devoid of any merits hence, the same was dismissed with all listed applications vide our short order dated 13.06.2014 and these are reasons for such short order. However, the petitioner is at liberty to raise all such objections on the merits of the case before the appropriate adjudication authorities which shall be decided strictly in accordance with law after affording proper opportunity of being heard to the petitioner.
J U D G E
J U D G E
ARSHAD/