ISLAMABAD: The Lahore High Court has directed the Federal Board of Revenue (FBR) to initiate the process of specifying the functions and jurisdictions of the officers of the Directorate General (Intelligence & Investigation Inland Revenue) and to complete it within two months.
According to the judgment of the LHC in the WP No 4361 of 2017, the SRO 115 of the FBR, and the impugned notices are set aside being without lawful authority and of no legal effect.
Thereafter, the FBR may confer powers on officers of the DG (I&I) compatibly with their functions, and to accord with the holding by this Court.
Although separate notices have been issued to the petitioner in these constitutional petitions, yet there is a commonality of challenge to the SRO 115(I)/2015 (SRO 115) issued by the FBR on 09.02.2015.
By the notification, certain powers and functions have been conferred on the officers of the DG (I&I) by Section 230 of the Income Tax Ordinance, 2001 (Ordinance, 2001), the LHC said.
Under the SRO115(I)/2015, Board has conferred upon the officers of the Directorate General (Intelligence and Investigation), Inland Revenue the powers of the authorities specified to exercise powers and perform functions under the provisions of the Income Tax Ordinance, 2001.
The court said that the Section 230 of the Income Tax Ordinance, 2001 sets up the DG (I&I).
It casts two onerous responsibilities on the FBR.
SRO 115 merely fulfills the mandate of Section 230(2)(b) (to confer powers) but the prior mandate has gone unfulfilled.
The LHC judgment said that unless the officers were aware of their jurisdiction (and functions), they would not be able to employ these powers within the sphere of activity settled by law.
Even more important than specifying the jurisdiction is the act of specifying the functions of DG (I&I) for that will determine the precise nature of the reason for their existence and set out the details of the field of activity.
Section 230 is a specimen of brevity and by sub-section (2), legislature has delegated on the FBR, the power of rule making to provide for relative details and better protection to private interests, against administrative arbitrariness.
But the FBR cannot exercise that power of administrative legislation by patchwork, ignoring the essence of the delegated authority, which postulates a structural approach of firstly, specifying the functions, and thereafter, for powers to be conferred.
The use of the word "and" after semi-colon at the end of clause (a) in sub-section (2), reinforces the view explicated above and leaves it in no manner of doubt that the notification regarding the functions and jurisdiction has to precede the notification conferring powers, and not the other wary round.
On this ground, too, SRO 115 is ultra vires and must be set aside, the LHC added.
Reading sub-section (2) holistically clearly shows that specifying functions and jurisdiction of officers of DG (I&I) is a prior step to the one conferring powers upon them.
Copyright Business Recorder, 2021
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