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Petitioner: MESSRS NAFEES BAKERS VS Respondent: DEPUTY COLLECTOR EXCISE AND TAXATION/SALES-TAX OFFICER, MIRPUR
1986 P T D 396
1986 P T D 396
[Azad J & K High Court]
Before Muhammad Akram Khan, J
Messrs NAFEES BAKERS and 2 others
Versus
DEPUTY COLLECTOR EXCISE AND TAXATION/SALES‑TAX OFFICER, MIRPUR and 7 others
Writ Petition No. 26 of 1985, decided on 23rd February, 1986.
(a) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑‑
‑‑S. 44‑‑Constitutional jurisdiction‑‑Disputed question of fact‑ Ordinarily disputed question of fact could not be gone into in constitutional petition but whenever an affidavit was placed before Court in constitutional petition and same was not controverted from other side affidavit could be accepted‑‑On basis of such affidavit, question of fact, held, could be decided by High Court even in constitutional jurisdiction.
P L D 1964 S C 260; P L D 1970 S C 29, 853; P L D 1971 S C 498; 1972 S C M R 47; 1973 S C M R 422; P L D 1977 Kar. 6; P L D 1978 Kar. 417; 1979 C L C 872; 1980 C L C 952; 1982 C L C 2217 and 1982 S C M R 497 rel.
(b) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑‑
‑‑‑S. 44‑‑Constitutional jurisdiction‑‑Question of fact‑‑High Court in constitutional jurisdiction would not hold an elaborate enquiry into question of fact but decide same on basis of affidavits‑‑If a party alleges a question of fact and produces a reliable document and also supports it with an affidavit if and that affidavit not challenged or controverted from other side, High Court, held, would not hesitate to accept that fact.
Eastern Express Co. Ltd. v. Sind Labour Court, Karachi P L D 1977 Kar. 168; 1972 S C M R 395; 1975 S C M R 352; 1981 S C M R. 318 and A I R 1971 J a K 67 ref.
(c) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑
‑‑‑S. 44‑‑Writ‑‑Purpose‑‑Writ is to foster justice or to advance cause of justice.
1980 C L C 446; 1980 C L C 99; P L D 1981 Kar. 469; 1984 PLC (C.S.) 325 and P L D 1984 S C 3 rel.
(d) Sales Tax Act (111 of 1951)‑‑
‑‑‑Ss. 10, 12(2) a 31‑‑Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974), S. 4(4) cl. 13 and S. 44‑‑Sales Tax‑‑Petitioners producing affidavit in support of sale‑deed by which they claimed to have transferred their confectionary business‑‑No counter‑affidavit filed to refute claim of sale and affidavit of petitioners standing unchallenged and uncontroverted‑‑Income‑tax Officer on other hand accepting transferee as owner and directing him to appear before him alongwith accounts and transferee paying income‑tax‑‑Confectionery business of petitioner, he'd. stood transferred to a third party in circumstances and no sales Aix could be levied on or demanded from him for that business.
PLD1977SC 182 ref.
(e) Azad Jammu and Kashmir Interim Constitution Act (VII of 1974)‑‑
‑‑‑S. 44‑‑Sales Tax Act (Iii of 1951), Ss.5(2), 10 & 12‑‑Circular No.7 of 1981‑‑Constitutional jurisdiction‑‑When a person is assessed and levied sales tax and has exhausted all alternate remedies provided by law and then comes to High Court in Constitutional jurisdiction for writ of qua warranto question as to whether respondent levying sales tax enjoyed power of a Sales Tax Officer or not, held, could be looked into and High Court would give verdict on that point.
(f) Azad Jammu and Kashmir Interim Constitution Ad (VIII of 1974)‑‑
‑‑‑S. 44‑‑Sales Tax Act (III of 1951) Ss.5 (2) & 12‑‑Circular No.7 of 1981‑‑Constitutional jurisdiction‑‑Aggrieved person‑‑Orders issued by respondent and notice impugned in petition speaking of application of 'penal provisions' against petitioner despite the fact that no sales tax had been assessed and no demand notice issued and impugned orders were passed on no evidence‑‑Petitioner, held, was an aggrieved person in circumstances and his writ petition was competent‑‑Impugned orders quashed.
(g) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑
‑‑‑S. 44‑‑Sales Tax Act (III of 1951). Ss.10 a 12‑‑Constitutional petition‑‑Aggrieved person‑‑Petitioner threatened to be proceeded against under penal provisions despite fact that no sales tax was assessed as yet‑‑Petitioner, held, was aggrieved person.
P L D 1969 S C 223; P L D 1975 Lah. 544; P L D 1979 Quetta 75; 1979 S C M R 389; 1981 C L C 321; 1981 C L C 1539 and PLD 1983 S C (A J a K) 20 rel.
(h) Azad Jammu and Kashmir' Interim Constitution Act (VIII of 1974)‑‑
‑‑‑S. 44‑‑Constitutional petition‑‑Maintainability‑‑Right sufficient for maintaining a proceeding in writ jurisdiction, held, not necessarily a right in strict juristic sense‑‑It was enough if applicant disclosed that he had a personal interest in performance of a legal duty which, if not performed or performed in a manner not permitted by law, would result in loss of some personal benefit or advantage or curtailment of a privilege or liberty or franchise.
P L D 1969 S C 223 rel.
(i) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑‑
‑‑‑S. 44‑‑Constitutiopal jurisdiction‑‑Invocation of jurisdiction‑‑Fact that petitioner should be an aggrieved person, held, was a sine qua non for invoking constitutional jurisdiction‑‑Petitioner must establish a direct or indirect injury to himself and substantial interest in subject‑matter of proceedings.
1979 S C M R 389 and P L D 1983 S C (A J a K) 20 rel.
(j) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑‑
‑‑‑S. 44‑‑Constitutional petition‑‑ Laches‑‑Doctrine of laches hits constitutional petition but where there is no inordinate delay same would be overlooked.
P L D 1975 A J a K 104; P L D 1980 S C (A J & K) 5; P L D 1983 SC (AJAK) 203; 1984 P T D (Trib.) 65; 1978 S C M R 367; NLR 1981 S C J 408; 1981 C L C 1163 and 1982 C L C 961 rel.
(k) Azad Jammu and Kashmir Interim Constitution Act (VIII of 1974)‑‑
‑‑‑S. 44‑‑Constitutional petition‑‑Doctrine of laches‑‑No hard and fast rules could be laid down in respect of delay in filing constitutional petition‑‑Every case having got its peculiar facts and circumstances, doctrine of laches could not be applied in every case blindly.
M A I R 1962 J & K 19; 1972 K L J 46; A I R 1975 J&K 27 and AIR 1958 J a K 11 rel.
Muhammad Afzal for Petitioners.
M. Nisar Mirza, Addl. A. G. for Non‑Petitioners Nos. 1 to 5. Riaz Alam for Non‑Petitioner No. 7.
Manzoor Hussain for Non‑Petitioner No. 8.
Date of hearing: 18th February, 1986.
ORDER
This is a writ petition under section 44 of the Azad Jammu and Kashmir Interim Constitution Act, 1974, whereby the petitioners have challenged the impugned orders, dated 12‑2‑1985 and 19‑2‑1985 passed by the Deputy Collector Excise and Taxation/Sales Tax Officer, Mirpur, the non‑petitioner No. 1.
2. The first impugned order i.e. No. TAX/EXCISE/499‑405/85, dated 12‑2‑1985 (Annexure P/VIII) reads as under: ‑
"Subject: Payment of Sale Tax.
Please refer to subject cited above. Vide this Office Order No. 3143‑44, dated 5‑12‑1983 copy of which was duly endorsed to you, your plea regarding the separation and sale of sweet business to some other persons was not accepted and you were directed to pay Sales Tax on self‑clearance basis. On conducting thorough enquiries and personal observations it has been found that restaurant, baking and sweets business is being conducted jointly and collectively in the same manner as was being done before.
The order cited above has neither been withdrawn /amended by this office nor appealed against by you, as such you are liable to pay Sale Tax on self‑clearance basis for the period 16‑7‑1983 to uptil now, failure to which penal action under relevant provisions of Sale Tax Act, 1951 will be taken. Your plea taken again by you in your Letter No. nil, dated 8‑12‑1984 being untenable and against the facts is not accepted."
The other impugned order is No. EXCISE/625‑27/85, dated 19‑2‑1985, which reads as under:‑
Subject: Payment of sales tax.
Please refer to this Office Letter No. 499‑501, dated 12‑2‑1985 regarding the subject cited above.
It has been reported by the concerned Inspector that you have not deposited the due amount of sales tax as payable by you in respect of sweets business being conducted in the same premises in which restaurant and bakery business is doing. You are given another opportunity for depositing the sales tax in the Government treasury before the end of this month otherwise action under law will be taken. It is again pointed out that In the light of your applications, dated 10‑12‑1983 and 8‑12‑1984 detailed fresh enquiries have been carried out by this office and it has been found that restaurant, baking and sweets business factually being conducted in the same old premises and no separation of sweets business has been made, in true sense as stated in the above‑mentioned applications. So yours' plea regarding separation of sweet business is not acceptable. Please arrange the payment of sales tax on self‑clearance basis within the time mentioned above."
3. So, the non‑petitioner No. 1 has disbelieved the transaction of sale and decided to proceed for the assessment of the sales tax from Messrs Nafees Bakers, the petitioners. These two orders have been challenged in this writ petition and a prayer is made that both these orders should be quashed.
4. Mr. Muhammad Afzal, the learned counsel for the petitioners, has urged the following points:‑
(a) That the petitioners are a registered Firm which was registered under the Partnership Act of 1932, on 8‑11‑1982, and the business of the petitioners was liable to sales tax, which was paid by the petitioners under Licence L‑4 No. 25/83, Annexure P/11. Later on, the petitioners' Firm sold its business in respect of the confectionary item which was liable to sales tax, on 4‑7‑1983, vide sale‑deed Annexure P/III in lieu of Rs.20,000 to the respondent No.7, Muhammad Aqeel. The petitioners' Firm informed the non‑petitioner No.l about the fact of sale, vide letter, dated 16‑7‑1983, Annexure P/IV. Thereafter. the non‑petitioner No. 1. vide his Order No. 3143‑44, dated 5‑12‑1983, refused to accept this transfer and called objections from the petitioners'
Firm which submitted its objections on 10‑12‑1983 and took up the stand that the business in respect of the confectionary item had been sold to Muhammad Aqeel. Copies of Letter No. 3143‑44, dated 5‑12‑1983 and the objections of the petitioners are attached with this writ petition as Annexure P/V arid PIVI. The non‑petitioner No.l dropped the proceedings against the petitioners' Firm and no order was passed in 1984 and no sales tax was demanded from the firm (the petitioners) in 1984.
Later on, the non‑petitioner No. 1 turned a volte face and vide Letter No. 1004‑5, dated 22‑11‑1984, Annexure P/VII after almost one year, the Inspector Excise, Mirpur demanded sales tax from the petitioners' Firm. The petitioners' Firm submitted objections against that order on 8‑12‑1984, vide Annexure P.VII/1. Thereafter, the Deputy Collector Excise and Taxation, Mirpur (non‑petitioner No. 1) passed the impugned orders and demanded the sales tax from the petitioners. These orders are bad in law because the confectionary business was transferred and then retransferred. It vas first transferred by the petitioners to Muhammad Aqeel, non‑petitioner No.7, who retransferred it to Muhammad Khalil non‑petitioner No.8, on 12‑2‑1984. Therefore, no sales tax could be levied against the petitioners' Firm for the item of confectionary;
(b) That no sales tax could be demanded without passing an assessment order about the sales tax under section 10 of the Sales Tax Act of 1951 which has been adapted‑by the Ordinance of 1984; (c) That the business of confectionary could be sold to any person under section 31 of the Sales Tax Act read with section 4, subsection (4), clause 13, of the Azad Jammu and Kashmir Interim Constitution Act, 1974;
(d) That the non‑petitioner No.l has got no jurisdiction of a civil Court to adjudicate upon the point of transfer of ownership. A copy of the sale‑deed was produced by the firm before the non‑petitioner No.l who has wrongly disbelieved that deed;
(e) That under section 3(4) (proviso‑of the Sales Tax Act of 1951), the law empowers the Central Board of Revenue to levy and collect the sales tax under Central Excise Act of 1944 which Central Excise Act is applicable to Azad Jammu and Kashmir territory vide the Adaptation of Laws Act of 1959. Therefore, according to the law, there should be a Board and that Board should direct the levy assessment and recovery of the sales tax under the Central Excise Act of 1944;
(f) That the Sales Tax Act of 1951 was adapted through an Ordinance but it is not known as to whether this Ordinance has been re‑enacted upto-date or not. It is also not known whether the Ordinance was placed before the Azad Jammu and Kashmir Legislative Assembly or not and whether the Legislature has passed the Act or not;
(g) That the Azad Jammu and Kashmir Government has not constituted or appointed any Board of Revenue under law. According to section 2 of the Sales Tax. Act (Act 111) of 1951 of Pakistan, the Act applies alongwith all the rules and notifications made or issued thereunder and enforced in Pakistan immediately before the commencement of this Ordinance and the expressions "Central Government" and "Central Board of Revenue" shall, as far as practicable, be construed to refer to the "Azad Government of the State of Jammu and Kashmir" and the "Azad Jammu and Kashmir Board of Revenue" respectively and a reference to "Pakistan" shall be construed as a reference to "Azad Jammu and Kashmir". Therefore, if some Azad Jammu and Kashmir Board of Revenue has been appointed by the Azad Jammu and Kashmir Government, that Board was not legally constituted;
(h) That under section 5 of the Sales Tax Act, the authorities prescribed for levy and collection of the sales tax are:
(1) Every Commissioner of Income‑tax will be Commissioner of Sales Tax;
(2) Every Appellate Assistant Commissioner of Income‑tax shall be the Appellate Assistant Commissioner of the Sales Tax; and
(3) Every Income‑tax Officer will be a Sales Tax Officer.
The argument is that the non‑petitioner No. 1 is not a "Sales Tax Officer" under law and, therefore, he has got no jurisdiction to pass any order in respect of the sales tax. He is merely the Deputy Collector Excise and Taxation and, therefore, he is not authorised or empowered to pass the impugned orders. Therefore, the orders are without any authority and jurisdiction and liable to be quashed on this ground alone;
(i) That no doubt the Sales Tax Circular No. 7 of 1991 gives a table whereby the Assistant Collector of Customs/Central Excise can be appointed as a Sales Tax officer and that Circular was issued under subsection (2) of section 5 of the Sales Tax Act of 1951 by the Government of Pakistan, but the Circulars of the Pakistan Government were not adapted by the Azad Jammu and Kashmir Government and, therefore, this Circular cannot be of any help to the non‑petitioner No. 1 because the Act along with its rules notifications was adapted and the word "Circular" was omitted at the time of adaptation of the said Act; .
(j) That under subsection (2) of section 5 of the Sales Tax Act, the Board of Revenue may delegate powers of the Sales Tax Officer to any person by name or by virtue of his office, but here in this case, there is no such delegation of powers through any "circular" passed by the Azad Jammu and Kashmir Government. Therefore, Mr. Bhatti, the Deputy Collector Taxation and Excise Mirpur (non‑petitioner No. 1) was not empowered to act as a "Sales Tax Officer";
(k) That section 10 of the Sales Tax Act of 1951 authorises the Sales Tax Officer to make an assessment and after that assessment, to issue a demand notice under section 12(2) of that Act. No such assessment was made and, therefore, the impugned notices' are illegal. The fact that the impugned orders are merely notices has been accepted by the non‑petitioner No.l in his written statement, para. No. 2 (Preliminary Objections).
(l) That the self‑clearance procedure is only provided under the Income‑tax Act and no such procedure exists under the Sales Tax Act. The impugned notices/or orders speak about the payment of sales tax under the self‑clearance procedure and, therefore, these orders are illegal;
(m) That under the Central Excise Act, rule No. 235, Chapter 15, there is a provision for self‑clearance procedure for payment of Central Excise for specified items only: and for specified places only. Here in this case, the confectionary item is not a specified item and Mirpur is not a specified place within the meanings of the rule No. 235 cited above;
(n) That the impugned notices have been issued by the non‑petitioner No. 1 in his capacity of Deputy Collector Excise and Taxation and not as Sales Tax Officer. He cannot issue such notices as Deputy Collector Taxation and Excise because he is an officer employed as a Deputy Collector Taxation and Excise which subject belongs to the Azad Jammu and Kashmir Government while the Central Excise is the subject of Azad Jammu and Kashmir Council. However, even if he shows that he is a Sales Tax Officer, even then he could not issue the impugned orders or notices because these orders have been issued in violation of section 5 read with section 10 of the Sales Tax Act ?f 1951. Section 12(2) also hits them;
(o) That under the Azad Jammu and Kashmir Rules of Business, which are issued under section 58 of the Azad Jammu and Kashmir Interim Constitution Act, 1974, Schedule No. I gives a list of the department. At serial number 7, Excise and Taxation Department is mentioned but the officer mentioned therein is Collector Excise and Taxation and not the Deputy Collector Excise and Taxation. The Schedule No.II mentions the subjects of Excise and Taxation and the words "other taxes" mentioned at serial number 10, page 38 of the Rules of Business, include sales tax; and
(p) That the title of property cannot be determined by the non -petitioner No.l on two grounds:
(i) It is the function of the civil Court to say that the registered deed was a fraud; and
(ii) The petitioner has placed an affidavit before the High Court. This affidavit goes unchallenged and uncontroverted because no counter‑affidavit has been produced from the other side. This means that the fact of transfer of the confectionary item has been admitted and, therefore, the finding of the non‑petitioner No.l that the confectionary business has not been transferred, is absolutely wrong.
No doubt, the disputed questions of fact cannot be gone into in a writ petition but whenever an affidavit is placed before the Court in a writ petition and it is not controverted from the other side, the affidavit of the petitioner should be accepted and. on the basis of it, the question of fact can be decided by the High Court even in writ jurisdiction.
5. Mr. Manzoor Hussain, Advocate, the learned counsel for Muhammad Khalil, non‑petitioner No.8, has argued that his client has purchased the confectionary business on payment of Rs.20,000 and paid the income‑tax for the assessment year 1985‑86 to the Income‑tax Department. He has produced a photostat copy of the Income‑tax challan which shows that Rs.100 were assessed on 1‑4‑1985 and this money was paid by Muhammad Khalil to the Income‑tax authorities. The learned Advocate has argued that under section 115 of the Evidence Act, the non‑petitioner No.l is estopped to demand sales tax from the petitioners because two persons cannot be assessed and asked to pay the sales tax for one and the same business.
6. Mr. Riaz Alam, Advocate, the learned counsel for Muhammad Aqeel, non‑petitioner No.7, has submitted that confectionary business is with Muhammad Khalil now and his client, Muhammad Aqeel, is not a party because he is not engaged in the confectionary business now at all.
7. On the other hand, Mr. M. Nisar Mirza, the learned Additional Advocate‑General has replied:‑
(a) That the petitioners are carrying on the business of cafetaria, bakery and confectionary. It is 'a Firm of about 6 or 7 persons of the same house and the same family. The Sales Tax Act was adapted in Azad Jammu and Kashmir in 1983 and the confectionary business was started before 1983. On 4‑7‑1983, the transaction of sale was communicated to the non‑petitioner No.l vide Annexure P‑III and this sale was not found genuine by the non‑petitioner No.l as it is clear from the letter Annexure P‑V which was written on 5‑12‑1983. The petitioners have not challenged the order Annexure P‑V, dated 5‑12‑1983 although this is the order, which goes against the petitioners and should have been challenged by them. Therefore, this writ is hit by the doctrine of laches and delay;
(b) That the impugned order is not a decision because no tax has been assessed, imposed or levied on the petitioners and, therefore, this writ petition is premature and should be dismissed;
(c) That no writ lies in this case because the impugned orders (if they can be termed as assessment orders) are merely notices about the decision regarding the sale;
(d) That the petitioners are not an aggrieved party within the meanings of section 44 of the Azad Jammu and Kashmir Interim Constitution Act, 1974 because .no sales tax has been assessed and no demand notice has been issued to the petitioners;
(e) That there is alternate remedy of appeal under section 14 of the Sales Tax Act, according to which an appeal lies to the Appellate Assistant Commissioner. This argument is advanced if the petitioners' case is that the impugned order are orders which levy any sales tax;
(f) That vide Sales Tax Circular No.7 of 1981, the Azad Jammu and Kashmir Board of Revenue empowers the Assistant Collector Central Excise to act as the Sales Tax Officer and, therefore, it is wrong to say that Mr. Bhatti, the non‑petitioner No.l, is not the Sales Tax Officer. (A photostat copy of the Circular, was produced by the learned Additional Advocate‑General and was placed on the file.);
(g) That the department of Excise and Taxation has been handed over to the Azad Jammu and Kashmir Council which is a necessary party in this case. The petitioners have failed to implead the Azad Jammu and Kashmir Council as a non‑petitioner and, therefore, this writ petition is liable to be dismissed on that ground. Though this objection was not raised in the written statement, yet in the light of the judgment of the Supreme Court in the case of N.T.T.C., a law point can be urged and raised although not mentioned in the written statement;
(h) That the sales tax is payable under section 3 of the Sales Tax Act and an appeal lies under section 14 of that Act. The learned Additional Advocate‑General has also referred to the Circular No.667 dated 25‑4‑1981, which lays down the procedure for collection of sales tax. The collection of sales tax on non‑excisable goods is made according to the Circular No.667‑C/81, dated 25‑4‑1981; and
(i) That the Deputy Collector Excise and Taxation is mentioned in the Rules of Business of 1975 at page 67. The words "all gazetted officers" include the Deputy Collector Excise and Taxation.
On the point of laches and delay, the learned Additional Advocate‑General has referred to P L D 1975 A J & K 104 and an unreported case of this High Court titled "Muhammad Sadiq v. Income Tax Officer". As regard to the aggrieved persons, P L D 1980 S C (AJ&K) 5 and PLD 1983 S C (AJ&K) 203 were cited by the learned Additional Advocate -General. He has also cited 1984 P T D (Trib.) 65 which case relates to the income‑tax and not to the sales tax.
8. In reply, Mr. Muhammad Afzal, the learned counsel for the petitioners, has submitted:‑
(a) That under the Adaptation Act, the Sales Tax Act has been adapted alongwith Rules and Notifications but the Circulars have not been adapted. Therefore, the non‑petitioner No. 1 has got no power to act as a Sales Tax Officer and jurisdiction to pass orders regarding the sales tax because he does not enjoy the powers of a Sales Tax Officer. The Circular No.7 of 1981 should have been adapted in Azad Jammu and Kashmir because the Adaptation Ordinance does not speak of Circulars but of Rules and Notifications only;
(b) That the appointment of a Sales Tax Officer is made by the Board of Revenue of Azad Jammu and Kashmir and no order has been shown whereby the Azad Jammu and Kashmir Board of Revenue appointed any person as the Sales Tax Officer including Mr. Bhatti, the non -petitioner No.l. Therefore, the non‑petitioner No. 1 is not a Sales Tax Officer appointed under law and, as such, he has no authority to pass any order under the Sales Tax Act. Reference was made in this respect to section 5, subsection (2), of the Sales Tax Act of 1951;
(c) That the Government Order No. 242/59, dated 15‑5‑1959 was made when the Central Excise was the subject of the Azad Jammu and Kashmir Government and it was in 1974 that under the Azad Jammu and Kashmir Interim Constitution Act of 1974, the department of Central Excise was transferred to the Azad Jammu and Kashmir…
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