ABDUL REHMAN MAYAT Versus WEALTH TAX OFFICER

1. ZAFFAR HUSSAIN MIRZA, J .‑‑This is an appeal by leave of this Court from the order of a Division Bench of the Sind High Court, dated 16th March, 1988, whereby the constitutional petition filed by the appellants was dismissed in limine.

2. Briefly the facts culminating in the impugned order are that the appellants along with others, are the owners of immovable property consisting of a commercial multi‑storey building bearing No.3‑SB‑6, Abdullah Haroon Road, Karachi, which has 9 floors and is called Farid Chambers.

3. According to the appellants they purchased the aforesaid property jointly with 23 other individuals in the year 1970.

4. 'The grievance of the appellants is that, although for the levy and collection of income tax, each of the individual co‑sharers was being treated as separate assessee and all the co‑sharers were not being treated jointly as association of persons, as a result of amendments made in section 2(m)(iii) of the Wealth Tax Act, in 1980, and further amendments made in the year 1981, the Wealth Tax Officer, treated all the co‑owners as body of individuals i.e. A.O.P. and framed the assessment for the years 1979‑80, 1980‑1981, 1981‑1982 and 1982‑1983 demanding a total sum of Rs.8,35,979 as wealth tax dues for the said years.

5. Being aggrieved the appellants preferred first appeal before the learned C .I . T . (appeals) which was dismissed and therefore the filed a second appeal before the Income Tax Appellate Tribunal (Karachi Bench), Karachi, which is pending decision. Along with second appeal, the appellants also prayed for stay of recovery proceedings which came before a Bench of the Tribunal. By order dated 23rd February, 1988, the learned Members of the Bench on a tentative assessment of the points urged by the learned counsel for the appellants, came to the conclusion that no case for stay was made out in respect of the assessment years in question except for the year 1979‑1980. Accordingly the prayer of the appellants was dismissed with respect to the three years and the recovery proceedings were only stayed in respect of the year 1979‑1980.

6. Being dissatisfied with the order passed on their stay application dated 23rd February, 1988, the appellants filed a constitutional petition before the High Court of Sind at Karachi seeking to challenge the assessment orders and the recovery proceedings resorted to in pursuance thereof. The learned Judges of the Division Bench of the High Court, who decided the constitutional petition dismissed the petition in limine, as stated earlier by the impugned order, on the reasoning as appears from the following passage of the order

7. "In support of the above petition Mr. Muhammad Naseem, learned counsel for the petitioner, has urged that the learned Income Tax Appellate Tribunal has not dilated upon the two important points, which were raised (1) that assessment of the petitioners under A.O.P. was not legal as the relevant provision of the Wealth Tax and the Schedule thereto was violative of the status and (2) that petitioners were not served with the notices prior to the passing of the impugned order.

8. In our view, the grant of stay is a matter of discretion of the Tribunal concerned. The Tribunal has exercised discretion partly in favour of the petitioners and partly against them. The appeal is still pending, in which the above points can be agitated."

9. Leave was granted by this Court in order to consider the question whether the High Court had misconceived the prayer of the appellants in the constitutional petition by treating the same to have been directed only against the order of the Income Tax Appellate Tribunal, while the appellants had filed the same impugning all orders passed against them as without jurisdiction.

10. As a short question of law was involved the main appeal was directed to be fixed at an early date and in pursuance of this order the appeal came up before the Court but was adjourned at the request of one of the parties. However, learned counsel for the appellants made a request that as the impugned order was causing hardship to the appellants, the stay application may be heard and disposed of. The request appeared to be reasonable but since the respondents did not have enough time to prepare the defence, by order dated 7 th June, 1988, passed at Quetta, the hearing of the miscellaneous petition was fixed for 26th June, 1988, at Rawalpindi.

11. In the meantime this case has come up for hearing of another miscellaneous petition by the appellants for disposing of the stay application so that the recovery of the wealth tax from the appellants may be stopped forthwith.

12. The main argument urged by the learned counsel for the appellants is that in pursuance of the recovery proceedings the respondents have attached the entire rent payable by the tenants in occupation of the various tenements in the building who have been prohibited from paying the rent to the owners, with the result that the owners are unable to pay for the employees, electricity, gas, repairs and provincial as well as K.M.C. taxes. According to the learned counsel the percentage of the expenses for upkeep and payment of the various taxes comes to as high as about 115$ of the income.

13. As the Court is due to close for summer vacation and there appears to be urgency in the matter, we have heard the learned counsel for the parties on the main appeal with their consent.

14. Learned counsel for the appellants reiterated his grievance noted in the order granting leave and sought to urge that in the light of the relevant provisions of law, the Wealth Tax Officer misconceived the legal position in treating the co‑owners of the property in question as association of persons, with the result that the entire proceedings have been rendered void. Elaborating his contention he submitted that the amended provisions of section 2(m)(iii) of the Wealth Tax Act, applied only in case there is common interest of the individuals in the property, as in the case of co‑operative societies or trusts, but it cannot include the case of co‑ownership in which the right of each individual co‑owner is relatable separately qua immovable property and is transferable separately which itself constitutes separate property.

15. After hearing the learned counsel for the parties we find that the decision of the High Court refusing to interfere with the orders impugned before it, in the exercise of constitutional jurisdiction, is mainly based on the ground that the second appeal filed by the appellants was still pending adjudication before the Income Tax Appellate Tribunal in which the same questions were under consideration. It is well recognized and indeed provided by Article 199 of the Constitution that the extraordinary jurisdiction of the High Court can ordinarily be invoked when there is no other remedy provided by law. When appellants themselves had invoked the statutory remedy of second appeal, no exception can be taken to the view taken by the High Court that in the presence of the pending appeal, the writ jurisdiction cannot be invoked. Therefore, there is n justification to interfere with the impugned order of the High Court.

16. For the same reasons we feel that it will not be proper for us to take over the decision of questions properly before the Income Tax Appellate Tribunal by deciding the same in this appeal, as that would pre‑empt the jurisdiction of the statutory Tribunal of which it is lawfully seized at the instance of the appellants themselves.

17. However, we find some force in the submission that the order of attachment of the rents payable by the tenants of the building in question may be causing great hardship against the owners some of whom are non‑residents and the maintenance of the property may be jeopardized until the appeal is disposed of by the Appellate Tribunal. However, we have no intention to decide the question whether stay of proceedings may be ordered and the order dated 23rd February, 1988 passed by the Bench of the Tribunal be set aside. We, therefore, direct that if a fresh application is submitted by the appellants in this behalf the Income Tax Appellate Tribunal shall reconsider the matter and dispose of the same on merits according to law after hearing the parties.

18. With the aforesaid observations this appeal is dismissed with no order as to costs.

19. M.B.A./A‑271/S Appeal dismissed.