DEPUTY COMMISSIONER OF INCOME TAX/WEALTH TAX, FAISALABAD and others vs Messrs PUNJAB BEVERAGE COMPANY (PVT.) LTD
This matter arises from petitions filed against the judgment of the Lahore High Court which accepted writ petitions filed against a show-cause notice issued under the Income Tax Ordinance, 1979. The core legal question before the Supreme Court was whether the High Court ought to have entertained a constitutional petition against a mere show-cause notice, bypassing the departmental forum provided under the law. The Supreme Court held that the practice of bypassing statutory remedies and rushing to the constitutional jurisdiction of the High Court against a show-cause notice is to be deprecated, as it impedes the Department from performing its functions and recovering revenue. The Court converted the petition into an appeal, allowed it, and set aside the impugned judgment of the High Court. The key principle laid down is that a party must exhaust statutory remedies and contest proceedings before the departmental authorities upon receiving a show-cause notice, rather than prematurely invoking the constitutional jurisdiction of the High Court under Article 199 of the Constitution.
- Whether a writ petition under Article 199 of the Constitution of Pakistan 1973 is maintainable against a show-cause notice issued under Section 66A of the Income Tax Ordinance 1979?
- Should parties be permitted to bypass departmental remedies and approach the High Court directly upon issuance of a show-cause notice?
- Section 66A, Income Tax Ordinance 1979
- Article 199, Constitution of Pakistan 1973
ORDER
Iftikhar Muhammad Chaudhry, C.J.--These petitions have been filed against the judgment dated 24-2-2003 passed by Lahore High Court, Lahore in Writ Petitions Nos, 4408 and 4360 of 2002.
2. Precisely stated facts of the case are that proposed show cause under Section 66A of Income Tax Ordinance, 1979, dated 6-3-2002 was issued to respondent who instead of contesting the proceeding before the forum directly filed writ petitions in the Lahore High Court. The High Court accepted the plea vide impugned judgments dated 24-2-2003.
3. Learned counsel for Department contended that as per language of the show-cause notice department had only asked as to why proposed action be not taken, the respondents could not have filed writ petitions in the High Court. They ought to have replied to the notice and contested the same within the Department. He in this behalf placed reliance on Al-Ahram Builders (Pvt.) Ltd. u.
Income Tax Appellate Tribunal 1993 SCM R 29.
4. We have heard learned counsel and have gone through the reported judgment carefully wherein it has been held that tendency of bypassing the remedy provided under law, and resort to constitutional jurisdiction of High Court was-deprecated. In view of the contents of the notice the Department only contemplates to take action against them. The petitioner instead of rushing to the High Court and consuming sufficient time should have submitted reply before invoking the jurisdiction of the High Court. We have held in the judgment that such practice is to be deprecated because if merely on the basis of show-cause notice proceedings are started then in such position department would never be in a position to proceed with the cases particularly the recovery of revenue etc. Thus keeping in view the circumstances of the case we are of the opinion that respondent, had wrongly availed remedy under Article 199 of the Constitution instead of availing appropriate remedy under Income Tax Ordinance, 1979. Therefore, merely for the purpose of convenience, availing the remedy of the High Court under Article 199 of the Constitution cannot be appreciated. Thus for the foregoing reasons petition is converted into appeal and allowed. The impugned judgment is set aside. No costs.