ISLAMABAD: The Islamabad High Court (IHC) directed the Federal Board of Revenue (FBR) to issue instructions under Section 214(1) of the Income Tax Ordinance, 2001, to the Karachi chief commissioner, to refrain from adopting any measures for coercive recovery.
A single-judge bench of Sardar Ejaz Ishaq Khan said the injunctive relief granted on 01.03.2024 shall continue.
The Court said that unnecessary interim litigation will be avoided if the main case could be decided as early as possible. The IHC office was directed that the main cases are to be listed for 14.03.2024, and no other case shall be listed (except urgent list) on that day.
FBR’s restructuring report to be submitted to IHC on 28th
It was also directed to list all the connected cases as well as CMs no. 2 (or 1 as the case may be for various petitions) filed along with the main petitions seeking interim relief.
The IHC said in order to save the respondents the colossal aggravation they would have to go through to file CPLAs against each of the interim order only to get the same order from the Supreme Court, and given that it is admitted on both sides that the Supreme Court has ordered the interim injunction to be remanded for a decision afresh by this Court. The order of the Supreme Court would be deemed applicable for all petitions pending before the High Court, and the respondents need not file CPLAs in that respect before the Supreme Court anymore.
The respondents are directed not to undertake any coercive measures for recovery, including by any forcible recovery from the accounts of all the petitioners, in view of the judgement of this Court in Pakistan LNG Limited v. Federation of Pakistan (2022 PTD 1763). To the extent that the aforesaid order of the Supreme Court requires a decision on the maintainability to be decided first, this Court has already heard extensive submissions in the previous hearings and has come to the conclusion that:
(i)all the petitions are maintainable to the extent they seek a declaratory relief in respect of the substantive content of the amendments made to the law, for the reason that the declaratory relief of reading down the law is directed at the law, and not to any person within the territorial jurisdiction of this Court; (ii)all the petitions where the petitioners file their tax returns in Islamabad are also maintainable for seeking directions against the tax authorities performing functions within Islamabad; and (iii)all the petitions where the petitioners file their tax returns in a jurisdiction other than Islamabad are maintainable to the extent the directions sought can be operative in respect of the tax authorities functioning within Islamabad.
However, the question whether a specific direction in the nature of a mandamus will on final judgement be issued to the respondent Chief Commissioner at Karachi remains to be decided for which submissions will be concluded on the next date.
It needs to be kept in view that a declaration is a remedy altogether distinct from a direction issued pursuant to that declaration, and given that this Court has already rendered a judgement by which it remains bound, the relief of declaration sought in these petitions is co-extensive with the previous judgement. This Court has yet to decide whether it will proceed to issue mandamus at all to the Chief Commissioner at Karachi; one may stop short of doing so in the final judgement.
In the meantime, in order for these petitions not to become infructuous, the Chief Commissioner Karachi has to wait till the final judgement; this Court has inherent powers to issue an interim injunction under section 151 of the Code of Civil Procedure ex-debitojustitiae, and in that respect an interim injunction operates independent of the constraints of the territorial jurisdiction under Article 199.
It needs to be remembered that the Chief Commissioner acts not in his own right, but as an official of the FBR subordinate to the Board under section 207 of the Income Tax Ordinance, 2001, tasked to collect revenue for the federal government, and it would be downright absurd - reductio ad absurdum - to take the view that, while the Board and the federal government stand precluded from coercive recovery premised on the amendments to section 4C under challenge in these petitions, the Chief Commissioner Karachi can go on a limb of his own to collect revenue by implementing those amendments as they stand and remit the revenue to the federal government and FBR who for now stand precluded from receiving that revenue in their accounts in the first place.
Copyright Business Recorder, 2024
Comments
Comments are closed.