WEALTH TAX OFFICER and anothers vs SHAUKAT AFZAL and 4 others

1. ' ABDUL QADEER CHAUDHRY, J.---This appeal by leave of the Court is directed against judgment of the High Court of Sindh dated 13-11-1990.

2. ' Leave granting order reads as under:-- "This is a petition for leave to appeal by the Wealth Tax Officer and another against the judgment of a Division Bench of the Sindh High Court, dated 13th November, 1990 allowing the Constitutional petition filed by the respondents and declaring the orders passed by the petitioners treating the disputed properties as "assets" within the meaning of the Wealth Tax Act, 1963 chargeable to wealth tax, as without lawful authority and of no legal effect..

3. ' The respondents are an association of persons and jointly own three properties, namely: (1) Afzal Plaza constructed on Plot No.164, Deh Safron, Shahrah-e-Faisal, Karachi, which is partly let out and partly occupied by the respondents for their own business, (2) property situated in Kotri which has been let out on rent and (3) property bearing No.338-B situated in Garden West, Karachi, which is lying vacant. These properties were inherited by the respondents from their father Sher Afzal Khan who died in September, 1975.

4. ' In the events that happened, Wealth Tax Officer, petitioner No.1, called upon the respondents to file a return of Wealth Tax and on the basis thereof an assessment order was passed. The respondents' appeal before the Commissioner of Income Tax (Appeals), petitioner No.2 herein, was dismissed and it was held that the properties fell within the definition of the term "assets" as defined by section 2(e)(ii) of the Wealth Tax Act, 1963 (hereinafter referred to as the Act). Respondents' appeal before the Tribunal is said to be pending and has not been decided.

5. ' However, the respondents challenged the orders passed in proceedings taken against them as without jurisdiction in a Constitutional petition before the Sindh High Court. It was admitted before the High Court that Afzal Plaza was constructed and let out partly, so was the property at Kotri let out from the date of its construction, as well as the property at Garden West, consisting of four floors, out of which on two floors some flats, were let out. However, learned Judges of the Division Bench of the High Court who decided the Constitutional petition referred to the judgment of this Court in Civil Appeal No.K-140 of 1981 (B.P. Biscuit Factory Limited, Karachi v. Wealth Tax Officer and another) which was decided on 19th January, 1989 and held that the properties held by the respondents did not. Fall within the ambit of the term "assets" as defined in the Act and as interpreted by this Court in the aforesaid judgment.

6. ' In support of the present petition, Mr. Shaik Haider, learned counsel, has urged that the learned Judges of the Division Bench have misconstrued the judgment of this Court in the case of B.P.

7. Biscuit Factory Limited, Karachi, and have fallen in error in holding, in the circumstances of the present case, that the properties are not liable to wealth tax within the meaning of the Act. In this connection, learned counsel referred to the view taken by this Court in the aforesaid judgment regarding the term "assets" so far as it related to the association of persons under section 2(e)(ii) of the Act where it was held as under:-- " We would hold that only such immovable properties as are held for the purposes of business of construction and sale or of letting them out fall within the definition."

8. ' In the submission of the learned counsel, on a plain reading of the clause construed and explained by this Court, properties held for purpose of business of construction and letting them out, clearly fall within the definition. If so, counsel contended that admittedly the properties in question were held by the respondents for purpose of business of construction and letting out on the facts established. Therefore, the learned Judges ought to have held so?

9. ' We have heard learned counsel for the parties Mr. Shaik Haider and Mr. Shahenshah Hussain.

10. Some factual disputes have been raised by the parties. After going through the impugned judgment, we noted that the respondents had filed appeal before the Tribunal against the action of the appellants and that appeal was still pending when the respondents filed Constitutional petition in the High Court. The learned High Court has noted this fact and made the following observation:-- "Mr. Shaik Haider the learned counsel also contended that the petition suffers from laches as appeal is pending before the Tribunal. Mr. Shahenshah Hussain has contended that the appeal is pending but it has not yet been decided and further that the respondents are demanding and recovering wealth tax from the petitioners. Mr. Shaik Haider frankly states that due to shortage of Benches the appeal could not be heard. In such circumstances when the Supreme Court has already laid down in clear terms the meaning of the expression "assets" which is clearly applicable to the facts of this case and although the petitioners have filed appeal which has not been heard and is not expected to be heard in the near future and further that they are being pressed by the respondents for recovery of demands they are entitled to challenge the same under Article 199."

11. The respondents had approached the Tribunal for the redressal of their grievance. Before exhausting departmental appeal, the High Court should not have entertained the Constitutional petition particularly, when the appellants' contention was that the precedent on which reliance was placed by the High Court, was distinguishable. This Court in the case of Commissioner of Income Tax, Companies-II and another v. Hamdard Dawakhana (Waqf), Karachi (PLD 1992 Supreme Court 847) has observed its under:-- "Before parting with the judgment we may observe that in cases where any party resorts to a statutory remedy against an order he cannot abandon or bypass it without any valid and reasonable cause and file Constitution petition challenging the same order. Such practice, in cases where statute provides alternate and efficacious remedy up to High Court, cannot be approved or encouraged."

12. ' We may also add the following observation of this Court in the case of A. Habib Ahmed v. K.K.G.

13. Scott Christian and others (PLD 1992 Supreme Court 353): "It is often said that if a Court has no jurisdiction it is better for the High Court to interfere in its extraordinary jurisdiction to provide swift and efficacious remedy. Experience has shown and it has now been recorded as opinion in a large number of cases, that in practice even if it was so few decades ago, it is no more so in the present circumstances. See a very recent judgment of this Court on this very issue Messrs English Boot Shoes Ltd. v. Collector, Central Excise and Land Customs (Civil Appeal No.344-K of 1986, decided on 24-12-1991).

14. ' We, therefore, 'accept this appeal, set aside order of the High Court. The respondents are allowed to go to the Tribunal and they may move an application for revival of appeal. It is expected and hoped that the Tribunal will decide the case on merits. There will be no order as to costs.