COMMISSIONER OF INCOME-TAX, COMPANIES III, KARACHI and others Versus Messrs PAKISTAN ELECTRIC MANUFACTURING CO. LTD.
This civil appeal arises from a judgment of the High Court of Sindh, which converted a time-barred income tax appeal into a constitutional petition and allowed it, setting aside concurrent orders of the tax authorities. The core legal questions involved whether an income tax appeal filed long after the dismissal of a second appeal was maintainable, and whether the High Court erred in exercising its constitutional jurisdiction to bypass statutory limitation periods and finality of orders. The Supreme Court of Pakistan held that the High Court improperly exercised writ jurisdiction by converting a time-barred appeal into a constitutional petition after considerable delay, ignoring the fact that the original assessment order had attained finality. The Court laid down the principle that constitutional jurisdiction cannot be invoked to circumvent the bar of limitation and revive matters that have already achieved finality through the prescribed statutory hierarchy without any apparent error on the face of the record.
- Whether an income tax appeal filed against an original assessment order after a considerable delay is time-barred and maintainable?
- Whether the High Court can lawfully convert a time-barred income tax appeal into a constitutional petition?
- Whether writ jurisdiction can be invoked to challenge an order that has already attained finality through the statutory hierarchy?
- Section 2(12), Income Tax Ordinance 1979
- Section 136, Income Tax Ordinance 1979
- Section 136(1), Income Tax Ordinance 1979
- Section 156, Income Tax Ordinance 1979
- Rule 22, Income Tax Appellate Tribunal Rules
ORDER
IFTIKHAR MUHAMMAD CHAUDHRY, C.J. --- Leave to appeal was' granted by this Court on 7th July, 2000 to consider the following questions:
(i) Whether the income tax appeal filed on 16-6-1998 against the original order dated 5-5-1996 was time-barred and could be lawfully maintained?
(ii) Whether the learned High Court failed to take into consideration various provisions of the statute and the judgments rendered by this Court on the questions of law involve? And
(iii) Whether the impugned judgment can be sustained in law in the peculiar facts and circumstances of the case?
2. Precisely stating the facts of the, case are that the assesses/respondent declared his income in the annual return for the year 1997-98 in which income-tax was levied in terms of section 2(12) of the Income Tax Ordinance, 1979 (hereinafter referred to as the "Ordinance"). The order of assessment was challenged by the respondent in appeal but could not succeeded within the hierarchy of Income Tax Ordinance, as second appeal filed by respondent was dismissed on 5th May, 1996. No reference against and subjected the same to tax. The order of assessment was challenged by respondent by way of first appeal, which failed, compelling him to approach Income Tax Appellate Tribunal (hereinafter referred to as the "Tribunal") by way of second appeal, which was also dismissed on 5th May, 1996. No reference against it was filed in terms of section 136 of the Ordinance. Subsequent, thereto assessee filed an application for setting aside the judgment of the Tribunal under Rule 22 of Income Tax Appellate Tribunal Rules (hereinafter referred to as "the Rules"), which was dismissed by the Tribunal vide order, dale 20th May, 1997. Respondent instead of seeking remedy against this order before the proper forum moved another application for rectification of the order, dated 5th May, 1996 in pursuance of section 156 of the repealed Ordinance which was rejected on 14th March, 1998. Finding no redress before the Income Tax Authorities as well as the Tribunal respondent preferred Income Tax Appeal No.158 of 1998 before the learned High Court of Sindh.
3. The appellant objected to the maintainability of the appeal on the bar of limitation but the High Court vide impugned judgment converted the appeal into a writ petition and allowed the same. As such instant appeal has been filed.
4. Learned counsel for the appellant stated that the scope of filing of appeal under section 136(1) of the Ordinance is altogether different from a constitutional petition, therefore, the learned High Court should not have allowed the conversion particularly known that the original order was passed on 5th May, 1996 and it was required to be challenged within a period of 90 days, therefore, on the question of limitation as well the constitutional petition was not maintainable as it suffered from lashes. It was further contended that the Income Tax Authorities not having identified any error floating on the face of the judgment or in the proceedings enquiring exercise of jurisdiction under section 156 of the Ordinance, therefore, the learned High Court ought not to have converted the appeal into constitutional petition.
5. No one has appeared on behalf of the respondent.
6. We have heard the learned counsel for the appellant and have gone through the orders passed by the Income Tax Authorities particularly the order dated 5th May, 1996 and the other orders passed on the basis of the applications moved. We are of the opinion that there was no error apparent or floating on the face of the record or the judgment warranting exercise of writ jurisdiction by the High Court. Therefore, for such reasons the competent authorities rightly dismissed the application filed by the respondent under Rule 22 of the Rules on 20th May, 1997. Surprisingly, the respondent instead of challenging this order and seeking remedy before the appropriate forums moved an application for rectification knowing well that no error apparent or floating on the face of the record was identifiable for exercise of constitutional jurisdiction. Therefore, we are of the opinion that it was not a fit case where the High Court should have exercised constitutional jurisdiction that too by converting an appeal into a constitutional petition after a considerable delay and ignoring the fact that the order, dated 5th May, 1996 had achieved finality. Assuming for the sake of arguments that there was some illegality in the impugned order, as claimed and pointed out by the respondent, therefore, he should have challenged the same before the proper forum instead of waiting for a long time and invoking the writ jurisdiction of the High Court.
7. For the foregoing reasons we are of the opinion that the learned High Court should not have converted the time-barred appeal into a constitutional petition for the purpose of considering the case of the respondent on merits as the impugned judgment/order had attained finality much before filing of the appeal before the High Court.
7-A. Thus, for the foregoing reasons the appeal is allowed and the impugned judgment of the High Court is set aside with no order as to costs.
S.A.K./C-10/SC Appeal accepted.