M/s. Amin Textile Mills (Pvt.) Ltd vs Commissioner of Income-tax and 2
This petition for leave to appeal challenged a High Court judgment that dismissed a constitutional petition filed against the issuance of show-cause notices under Section 65 of the Income Tax Ordinance, 1979. The petitioners argued that the notices were void ab initio, asserting that the condition precedent under Section 65(2) of the Ordinance—the possession of definite information subsequent to the assessment—was not met. The Supreme Court upheld the High Court's decision, affirming that the mere issuance of a show-cause notice does not render it invalid or void. The Court held that the petitioners must exhaust the statutory remedies available within the hierarchy of the Income Tax Ordinance before invoking the constitutional jurisdiction of the High Court. The Court discouraged the practice of bypassing statutory forums to seek constitutional relief. While the petition was dismissed and leave to appeal declined, the Court granted the petitioners liberty to raise their objections before the relevant Income Tax Authorities, directing that such objections be considered in accordance with the law before any adverse order is passed.
- Is a constitutional petition maintainable against the issuance of a show-cause notice under the Income Tax Ordinance, 1979?
- Must a taxpayer exhaust statutory remedies provided under the Income Tax Ordinance, 1979, before approaching the High Court under its constitutional jurisdiction?
- Does the mere issuance of a show-cause notice under Section 65 of the Income Tax Ordinance, 1979, render it void ab initio without evidence of lack of independent application of mind by the authority?
- Section 65, Income Tax Ordinance 1979
- Section 65(2), Income Tax Ordinance 1979
- Section 62, Income Tax Ordinance 1979
- Section 132, Income Tax Ordinance 1979
- Section 107(5), Income Tax Ordinance 1979
JUDGMENT: IRSHAD HASAN KHAN, J.--(1). This petition for leave to appeal is directed against the judgment, dated 8-12-1998 of the High Court of Sindh at Karachi, whereby Constitution Petition No,D-1353 of 1997, filed by the petitioners against issuance of show-cause notices under section 65 of the Income Tax Ordinance, 1979 (hereinafter referred to as the Ordinance), was dismissed with the following observation:-- "Upon the above discussion, we have come to the conclusion that the Constitutional petition is misconceived and is not maintainable as the petitioner has ample remedy available to him in case an adverse order is passed on the basis of the impugned show-cause notices. Accordingly, this petition is dismissed with costs together with the miscellaneous application therein."
2. Mr. Rehan Hasan Naqvi, learned Advocate Supreme Court for the petitioners vehemently contended that the learned Division Bench of the High Court had erred in not appreciating that the impugned notices were ab initio void, illegal, arbitrary, unwarranted and without jurisdiction as the condition precedent as laid down in sub-section (2) of section 65 of the Ordinance, did not exist in petitioners' case, inasmuch as, no definite information subsequent to the assessment orders passed under section 62/132 of the Ordinance, had come in possession of respondent No,
3. He further argued that the learned Judges in the High Court also erred in holding that the provisions of subsection (5) of section 107 of the Ordinance had been correctly invoked although the assessm ent orders were passed under sections 62/132 of the Ordinance to give effect to the order of the learned Commissioner of Income Tax (Appeals), dated 1-2-1994, passed in Appeals Nos, 97, 98 and 99 of 1993. It was finally contended that the very fact that the Constitution petition had been admitted to a regular hearing, constituted a prima facie case in favour of the petitioners, therefore, in the facts and circumstances of the case and the explanation offered by the petitioners, the impugned notices should have been quashed.
3. After hearing the learned counsel for the petitioners at some length we may observe that simpliciter the factum that notices under section 65 of the Ordinance had been issued, would not render them invalid or void. There is no material on record to show that the competent Authority failed to apply its independent mind to the facts of the case before issuing notices. Be that as it may, the High Court, was right to observe that the petitioner should, in the first instance, approach the hierarchy of the forums provided for under the Ordinance instead of filing a Constitution petition. Apart from the bald assertion that the impugned order is void ab initio there is nothing on record to substantiate the above plea. In the case of Al Ahram Builders (Pvt.) Ltd. v. Income Tax Appellate Tribunal (1993 SCM R 29), this Court discouraged the tendency to bypass the remedy provided under the relevant statute to press into service Constitutional jurisdiction of the High Court.
4. Be that as it may, the petitioners shall be at liberty to raise whatever pleas available to them against the impugned notices before the Income Tax Authorities. We have no doubt in our minds that any objection raised by the petitioners against the impugned notices shall be duly considered and disposed of in accordance with law before any adverse order is passed by the concerned authorities, without prejudice to any observations made in the impugned judgment as well as this order. However, in the circumstances of the case, imposition of cost is it set aside.
5. With the above observation, the petition is dismissed and leave is declined.