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Petitioner: Messrs IBRAHIM FIBRES LTD. through Secretary/Director Finance VS Respondent: FEDERATION OF PAKISTAN through Secretary/ Revenue Division and 3 others
Court Name: Sindh High Court Judge(s): Muhammad Ather Saeed, Arshad Noor Khan Title:Messrs IBRAHIM FIBRES LTD. through Secretary/Director Finance vs
FEDERATION OF PAKISTAN through Secretary/ Revenue Division and 3 others Case No.: C.P. No, D-548 of 2008 Date of Judgment:2008-11-22 Reported As: PLD 2009 Karachi 154 Result: Petition refused Judgment ORDER ' MUHAMMAD ATHAR SAEED, J.-This constitutional petition was filed in this Court on 27-3-2008 against the alleged action and inaction of the Income Tax Appellate Tribunal, Lahore Bench and both the Judicial and Accountant Members of the Lahore Bench, who had allegedly after hearing the appeal filed by the petitioner against the order of the CIT Appeals Lahore setting aside the order of the Income Tax Officer based at Lahore on the point of credit under section 107AA had passed dissenting orders and the Accountant Member is alleged to have changed his verbal order to please Respondents Nos.10 and 11 was are also based at Lahore. 2. Vide various orders passed by this Court on different dates initially the orders of the Members of Income Tax Appellate Tribunal Lahore were sealed and they were restrained from de-sealing the order but later on this order was recalled. However, the respondent department was restrained from initiating any action in terms of the said order. Later on, contempt application was also moved against some of the respondents on which notices were issued to the alleged contemnors and the interim order passed earlier was extended. 3. Earlier, vide the order of this Court, dated 3-4-2008, the learned counsel for the petitioner was put to notice that the legal objection made by the respondents Nos.9 and 10 that since the matter pertains to Province of Punjab this Court does not have the territorial jurisdiction to adjudicate it, would be decided first. This case was fixed before this Bench for the first time on 21-10-2008 when once again the learned counsel for the petitioner was put to notice that this Court before adjudicating on merits of the case, will first take up and decide whether the petition is
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maintainable insofar as it has been filed in this Court against action of the Tribunal at Lahore and today both the applicants were prepared to argue on this point. 4. We have heard Mr. Khawaja Shamsul Islam the learned counsel for the petitioner and Mr. Shahid Jamil Khan learned counsel for the respondents Nos.9 and 10. 5. The learned counsel for the petitioner started his arguments by reading out the orders of this Court, dated 28th March, 2008 and 3rd April, 2008 in which this Court had given certain directions to the respondent No,8 i.e, the Tribunal and other respondents for sealing of the impugned order and then order for desealing the same and restraining the respondent Department from taking any action on the basis of the disputed impugned order. On the basis of these two orders of this Court the learned counsel drew our attention to the order of the Income Tax Appellate Tribunal in which the directions given in these orders of this Court had been complied with. The learned counsel, therefore, argued that the respondents had by complying with the orders of this Court accepted the jurisdiction of this Court and, therefore, they were precluded from challenging the jurisdiction of this Court to adjudicate on this constitutional petition. He further submitted that no prejudice is caused to the respondent if this constitutional petition is heard by this Court or by the Lahore High Court. The learned counsel submitted that the secretarial, corporate commercial, legal and tax assessm ent matters are being regularly attended by the company secretariat tax law division situated at Karachi. All returns, petitions, revisions and memos are prepared at Karachi office and their tax advisors and legal advisors are also based at Karachi. He further stated that the appeal before the Tribunal was prepared at Karachi and filed before the Income Tax appellate Tribunal Lahore and the notices of hearing of the appeal and the impugned orders were also received at Karachi office. According to the learned counsel, the Income Tax appellate Tribunal is a single entity and its Benches function at Karachi, Lahore, Islamabad, Peshawar and Quetta and, therefore, since it is a Federal Institution, its orders can be challenged in any High Court in Pakistan and at least in the case of the present petitioner both the Sindh High Court and the Lahore High Court have concurrent jurisdiction and it is his prerogative to opt to file the constitutional petition before any of the two High Courts. The learned counsel then drew our attention to section 20(c) of the C.P.C. Which provides that subject to limitations aforesaid every suit shall be instituted in a Court within the local limits of whose jurisdiction the cause of action wholly or in part arise. According to the learned counsel the petitioner's tax matters are dealt with at the Karachi office and notice of hearing was also received at the Karachi office, therefore, the cause of action has partly arisen in Karachi and this Court has full jurisdiction to decide this constitutional petition. The learned counsel then referred to the judgment of the Honourable Supreme Court in the case of Messrs Al-Iblagh Limited, Lahore v. The Copyright Board, Karachi and others (1985 SCMR 758) in which a full bench of the Honourable Supreme Court had held that a petition/appeal against a judgment of the Copyright Board, the office of whose Registrar is situated at Karachi, can be filed either in the Sindh High Court or Lahore High Court as both the Courts have concurrent jurisdiction in the matter and both the Courts can entertain a writ petition against the impugned order. He submitted that this case is completely identical to the case of the petitioner and since this judgment is that of a full bench comprising of five Members it is binding on this Court and, therefore, this Court may declare that it has jurisdiction to hear the above constitutional petition. The learned counsel then relied on the judgment of this Court reported in the case of Itehad Cargo Services v. Rafaqat Ali (PLD 2002 Karachi 420) in which this Court had held that where two Courts might have jurisdiction in respect of the same case it is prerogative of the plaintiff to choose the place of suing. The learned counsel then read out Rule 3 of Income Tax Appellate Tribunal Rules, 2005 which reads as under:-- (2) Sitting of Bench.---A Bench shall hear and dispose of such appeals and applications made under the Ordinance as are assigned by the Chairperson or any member authorized by him in this
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behalf. 6. He argued that this rule is completely para materia with the relevant rule of copyright which was adjudicated upon in the Al-Iblagh case (supra) and, therefore, the facts of his case are completely identical to the case of Al-Iblagh case. The learned counsel also placed reliance on the following cases:-- (1) Gulzar Ahmad Khan v. The Chief Election Commissioner of Pakistan Islamabad and 7 others (PLD 1997 Lahore 643). (2) Trading Corporation of Pakistan (Private) Ltd. v. Pakistan Agro Forestry Corporation (Private) Limited and another (2000 SCMR 1703). (3) Secretary, Ministry of Religious Affairs and Minorities and 2 others v. Syed Abdul Majid (1993 SCMR 1171). (4) Ch. Akbar Ali v. Secretary, Ministry of Defence, Rawalpindi and another (1991 SCMR 2114). (5) Flying Kraft Paper Mills (Pvt.) Ltd. Charsadda v. Central Board of Revenue, Islamabad and 2 others (1997 SCMR 1874). 7. On the basis of his arguments and the judgment relied on by him the learned counsel submitted that this Court has jurisdiction to hear this constitutional petition and prayed that he may be provided an opportunity to the argue the case on merits. 8. The learned counsel for the respondents strongly opposed the arguments advanced by the learned counsel for the petitioner and submitted that by complying with the order and directions of this Court, the respondents have not conceded to the jurisdiction of this Court and are not precluded from challenging it. He further argued that even if it is considered that the respondents have accepted the jurisdiction of this Court then also it is a settled law that the parties cannot give consent to any action which is against the law. 9. The learned counsel submitted that the filing of writ petitions are governed by the provisions of Article 199 of the Constitution of Islamic Republic of Pakistan, 1973. He read out the provisions of Article 199 to point out that this Court is competent to pass orders in cases covered under paras (i) and (ii) of sub-clause (a) of clause (1) of this Article and under paras (i) and (ii) of sub-clause (b) and sub-clause (c). Reading out all these provisions he specifically mentioned that under all these provisions the Court can exercise its jurisdiction when any person performs, within territorial jurisdiction of the Court, or an act is done or proceedings taken within the territorial jurisdiction of the Court, or a person is in custody within the territorial jurisdiction of the Court, a person holds office within the territorial jurisdiction of the Court or when government functionaries exercise any powers or perform any functions within the territorial jurisdiction of that Court. He pointed out that so far as the present petition is concerned, the petitioner has prayed to this Court for issuance of writ of mandamus falling under sub-clause (ii) of sub-clause (a) of clause (1) of Article 199 and this Court before exercising its jurisdiction has to be satisfied that the act done or proceedings taken against which the writ of mandamus is requested to be issued, has been done or taken within the territorial jurisdiction of this Court. He pointed out that the petitioner filed his returns of income before Taxation Officer performing his functions in the province of Punjab which falls under the jurisdiction of the Lahore High Court. The appeal has been heard by the Lahore Bench of the Income Tax Appellate Tribunal at Lahore by the Judicial and Technical Members who have been posted to perform their functions at Lahore, the act of passing the order or omission for passing of the relevant order have all been performed at Lahore and, therefore, this Court has no jurisdiction to entertain this petition for issuance of writ of mandamus as none of the purported actions or proceedings have been taken within the jurisdiction of this Court. 10. The learned counsel then strongly opposed the arguments of the learned counsel for the petitioner that since the Income Tax Appellate Tribunal is a Federal Body and its benches function in all the four provinces, therefore, despite the fact that the act or omission may have been taken
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by the functionaries of the Tribunal functioning in a particular province but the entitlement of filing a petition against such act or omission is within the prerogative of the petitioner to file in any Court he so desires. The learned counsel submitted that Al-Iblagh case quoted supra on which the reliance has been placed by the learned counsel for the petitioner is distinguishable from the facts of this particular case, as in that case it was observed by the Honourable Supreme Court that since Copyright Board has been setup by Pakistan Central Government for whole of Pakistan and performs functions in such matters relating to the affairs of Federation in all the provinces, therefore, any order passed by such Board or proceedings taken by it in relation to any person in any of the four provinces of the country, would give High. Court of Province, in whose territory order would affect such a person, jurisdiction to hear the case. They also observed that appeal under section 76 can also be preferred to High Court within whose jurisdiction the appellant actually and voluntarily reside or carries on business or .Works for gains. He pointed out that the facts in that case were that initially the hearing of the appeal in view of the request of the parties as well as for the convenience of the three of the Members of the Board who were from Lahore and Rawalpindi admittedly, had taken place at Lahore. However, the final order whereby the appeal was dismissed was announced at Karachi, but since the appellant admittedly resided at Lahore it was held by the Honourable Supreme Court that both the Sindh High Court and the Punjab High Court had concurrent jurisdiction to hear the appeal under the Copyright Act. He also preferred to the judgment of the Honourable Supreme Court in the case of Asghar Hussain v. Election Commissioner of Pakistan and others (PLD 1968 SC 387) which was relied on by the Honourable Bench in Al-Iblagh case (supra) and pointed out that in that case the subject matter of the certificated appeal was that bye-election of East Pakistan Provincial Assembly from constituency No,PE-126, Comilla VI, was held under the President's Order and the High Court of East Pakistan had given a decision that it had no jurisdiction to issue writ or direction to the Election Commissioner of Pakistan as it was stationed at Islamabad. The Honourable Supreme Court held that this judgment was unsustainable in law and the persons, who were affected, by the order were residing within the jurisdiction of High Court of East Pakistan (as it then was) and the elections were held in the territory of East Pakistan (as it then was) and the Election Commissioner was person or authority which exercised its powers in the Province of East Pakistan in connection with the affairs of the Center and, therefore, the High Court of East Pakistan had proper jurisdiction. The learned counsel pointed out that the fact in these cases was that the parties in those appeals were the persons who were affected ordinarily resided in the territorial jurisdiction of the High Courts in whose jurisdiction they had filed these petitions and cause of action had also accrued to them in the territorial jurisdiction of those High Courts. The learned counsel then relied on the judgment of the Honourable Supreme Court in the case of Sandalbar Enterprises (Pvt.) Ltd. v. Central Board of Revenue and others (PLD 1997 SC 334) in which according to him the case of AlIblagh quoted supra was distinguished. According to the learned counsel in this case writ petition was filed in Rawalpindi Bench at Lahore High Court against an assessment for the levy of regulatory duty imposed at Karachi which was rejected by the Lahore High Court and the petition was returned to the petitioner to present the same before the proper Court on the ground that the learned Lahore High Court had no territorial jurisdiction despite the fact that vires of Notification was also challenged and reliance was placed on Al-Iblagh case. However, grant of leave was refused by the Honourable Supreme Court after distinguishing the case of Al-Iblagh in the following manner. "(7) The petitioners' prayer was for a direction to the Customs Authorities at Karachi not to levy the regulatory duty. The above relief could have been granted by the High Court of Sindh within whose jurisdiction the person performing the affairs of the Federation is discharging his functions." 11. The learned counsel also argued that the cause of action will arise in territories within whose jurisdiction impugned action or proceedings which have been challenged and in which the
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authorities have given the verdict and only that High Court will have the jurisdiction to issue writ of mandamus. The learned counsel in support of his above contentions relied on the following case laws. (1) Sabir Din v. Government of Pakistan through Secretary, Ministry of Defence and others (1979 SCMR 555). (2) Abdul Ghaffar Lakhani v. Federal Government of Pakistan and 2 others (PLD 1986 Karachi 525). (3) Mst. Shahie a Maqsood v. President of Pakistan through Secretary, Law Justice and Human Rights (2004 CLC 565). (4) Subhan Beg and 18 others v. Pakistan State Oil Co. Ltd. Rawalpindi (PLD 1980 Kar. 113). 12. The learned counsel pointed out that if it is held that in case of orders of the Federal Tribunal even those Courts have jurisdiction within whose territorial jurisdiction the cause of action does not arise either partially or fully nor the authorities whose impugned action has been challenged are performing the functions of the Tribunals in that territorial jurisdiction, then a pandora box will open and appeals and petitions will be filed in various High Courts just on the basis of personal preference of likes and dislikes. He, therefore, prayed that this Court may refuse to exercise its jurisdiction and dismiss the petition in limine leaving the petitioner to seek any other remedy if he so desires. 13. Exercising his right to reply the learned counsel for the petitioner referred to a Full Bench judgment of this Court in the case of Ghaffar Lakhani case relied on by the learned counsel for the respondent and quoted supra. The learned counsel submitted that after the judgment of the Supreme Court in the case of Zafar Ali Shah's case reported in PLD 2000 SC 869, this judgment of the Full Bench of this Court has been rendered per incurium. In support of his contention he relied on the following few lines from the judgment of the Honourable Supreme Court:-- "It is a fundamental principle of jurisprudence that Court must always endeavor to expand their jurisdiction so that the rights of the people are guarded against arbitrary violations by the executive. The orders of the Chief Executive are subject to the jurisdiction of the constitutional Courts of the land." 14. The learned counsel also argued that for the purpose of administration of justice Court can mould the relief and allow the same though it is not prayed for as the courts are not merely salves of technicalities, but are Courts of justice and, therefore, the relief can be moulded in a way which serves the purposes of justice. For this purpose, he relied on a judgment of this Court in the case of Messrs Facto Belarus Tractors Limited Karachi and another v. Federation of Pakistan (PLD 2006 Karachi 479). To substantiate that the partial cause of action arose at Karachi and therefore this Court had jurisdiction to entertain the writ petition, the learned counsel relied on a judgment of the Honourable Supreme Court in the case of the Collector, Customs and Central Excise, Peshawar v. Messrs Rais Khan Limited (1996 SCMR 83). 15. We have examined the case in the light of the arguments of the learned counsel and have also perused the records of the case and the law on the subject including provisions of Article 199 of the Constitution of Islamic Republic of Pakistan and the judgments relied on by the learned counsel. 16. At the very outset, we may observe that we are not impressed by the arguments of the learned counsel that by complying with the directions of this Court issued through earlier orders, the respondents have impliedly consented that this Court has jurisdiction to issue writ of mandamous in this case. They had already objected against filing of this constitutional petition before this Court and merely complied with the directions and orders of this Court simply out of respect they hold for this Court and the compliance of the orders do not mean that they had given implied consent to the jurisdiction of this Court. From a perusal of the actions and omission of the members of the Income Tax Appellate Tribunal Lahore bench we have seen that such acts and omissions took
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place within the territorial jurisdiction of the Lahore High Court and therefore the cause of action fully arose at Lahore. It is also our considered opinion that the effect of the order of the Tribunal either in favour or against the petitioner would either be that the tax would be demanded or the tax liability will be extinguished by the taxation officer at Lahore and no person or authority based in Karachi or any other part of Sindh which falls within the territorial jurisdiction of this Court, will be entitled to issue any demand or take any coercive action against the petitioner for recovery of demand or in any other matter connected with the subject-matter of appeal. We are also of the opinion that although the Income Tax Appellate Tribunal is a federal institution having Benches all over the country and functions under a single chairperson who, as pointed out by the learned counsel for the petitioner, performs its functions in all the provinces through benches formed by the learned Chairperson to hold sitting at the headquarter or such other place as the chairperson may consider convenient. However, the functions of these Benches will be restricted to the territories in which they have been assigned by the chairperson to hear and decide the appeals and the Lahore Bench according to the jurisdiction has been constituted to hear appeals against the orders of the Taxation Authorities performing their functions in Lahore or such other part of Punjab as may have been declared by the chairperson and, therefore, it is clear that from the time the return was field before the Income Tax Officer all the actions initiated and proceedings taken have been taken by the authorities including the taxation officer, commissioner of Income Tax (Appeals) and the Members of the Income Tax Tribunal performing their functions in respect of cases falling within the territorial jurisdiction of the Lahore High Court. The petitioner counsel has been emphasizing that the partial cause of action had arisen at Karachi, but except arguing that his corporate tax offices are situated at Karachi and that the impugned orders were received at Karachi, the has not been able to point out even a single instance of the cause of action arising at Karachi or any effect of the impugned action or omission by the Members of the Tribunal which may have arisen at Karachi and which could be implemented in any part of Sindh by any authority. 17. The learned counsel for the petitioner has relied heavily on AlIblagh case and has argued that the facts of this petition are similar to the facts of that case as both the Income Tax Appellate Tribunal and the Copyright Board are Federal Institutions performing their functions all over Pakistan. It is, therefore, his submission that the orders passed by the Tribunal sitting anywhere in Pakistan can be challenged in any High Court in Pakistan. 18. We have examined the judgment of the Honourable Supreme Court in Al-Iblagh case quoted supra and have seen that the Honourable Supreme Court decided the issue that Lahore High Court had jurisdiction to entertain the writ petition filed by the petitioner whose appeal against the order of the Copyright Board sitting in its appellate capacity was to be filed before the learned Lahore High Court. The Honourable Supreme Court decided this issue in the following manner:- "The learned Judge in the High Court was of the opinion that as the offices of the Registrar and the Copyright Board were located in Karachi and the record to be examined (or "certified" if the technical term was to be used) was also in Karachi, the rule laid down by this Court in The Deputy Managing Director, National Bank of Pakistan and others v. Ataul Haq PLD 1965 SC 201 would be attracted and, therefore, the Sindh High Court in whose jurisdiction the records of the respondents were available would alone have jurisdiction to entertain the writ petition." 19. In this case the Honourable Supreme Court also relied on its observations in the case of Asghar Hussain quoted supra which reads as under:-- "The plaint meaning of the words" "a person performing in the Province functions in connection with the affairs of the Centre" excludes territorial limitations, such as, that the person or authority to whom the High Court is empowered to issue writs must be amenable to its jurisdiction either by residence or location within those territories." ' It explained that:-
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"The Central Ministries as well as many Departments of the Central Government are located in Islamabad or at Rawalpindi. Nevertheless they perform functions in both the provinces in connection with the affairs of the Centre, such as, Defence of Pakistan, External Affairs, ' Insurance, Copyright, ' Patent, Design---------" 20. We are of the opinion that the facts of the present petition are not identical with the facts of the case in Al-Iblagh case quoted supra because whereas Income Tax Appellate Tribunal performs its functions through various benches which have been granted jurisdiction to hear and decide the case in various territories the copyright Board is a single entity which meets all over Pakistan to decide the cases in which cause of action may have arisen in a particular territory and appeals are ordinarily filed in the High Court in which the cause of action arose and when such decisions are…
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