"\u003chtml xmlns:o=\"urn:schemas-microsoft-com:office:office\"\r\nxmlns:w=\"urn:schemas-microsoft-com:office:word\"\r\nxmlns:st1=\"urn:schemas-microsoft-com:office:smarttags\"\r\nxmlns=\"http://www.w3.org/TR/REC-html40\"\u003e\r\n\r\n\u003chead\u003e\r\n\u003cmeta http-equiv=Content-Type content=\"text/html; charset=windows-1252\"\u003e\r\n\u003cmeta name=ProgId content=Word.Document\u003e\r\n\u003cmeta name=Generator content=\"Microsoft Word 11\"\u003e\r\n\u003cmeta name=Originator content=\"Microsoft Word 11\"\u003e\r\n\u003clink rel=File-List href=\"2003J14_files/filelist.xml\"\u003e\r\n\u003ctitle\u003eSECTION 122 OF THE INCOME TAX ORDINANCE, 2001 A PATENT ABUSE OF `DUE\r\nPROCESS OF LAW\u0027\u003c/title\u003e\r\n\u003co:SmartTagType namespaceuri=\"urn:schemas-microsoft-com:office:smarttags\"\r\n name=\"date\"/\u003e\r\n\u003co:SmartTagType namespaceuri=\"urn:schemas-microsoft-com:office:smarttags\"\r\n name=\"place\"/\u003e\r\n\u003co:SmartTagType 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1.25in;\r\n\tmso-header-margin:.5in;\r\n\tmso-footer-margin:.5in;\r\n\tmso-paper-source:0;}\r\ndiv.Section1\r\n\t{page:Section1;}\r\n--\u003e\r\n\u003c/style\u003e\r\n\u003c!--[if gte mso 10]\u003e\r\n\u003cstyle\u003e\r\n /* Style Definitions */\r\n table.MsoNormalTable\r\n\t{mso-style-name:\"Table Normal\";\r\n\tmso-tstyle-rowband-size:0;\r\n\tmso-tstyle-colband-size:0;\r\n\tmso-style-noshow:yes;\r\n\tmso-style-parent:\"\";\r\n\tmso-padding-alt:0in 5.4pt 0in 5.4pt;\r\n\tmso-para-margin:0in;\r\n\tmso-para-margin-bottom:.0001pt;\r\n\tmso-pagination:widow-orphan;\r\n\tfont-size:10.0pt;\r\n\tfont-family:\"Times New Roman\";\r\n\tmso-ansi-language:#0400;\r\n\tmso-fareast-language:#0400;\r\n\tmso-bidi-language:#0400;}\r\n\u003c/style\u003e\r\n\r\n \r\n\r\n\u003cbody lang=EN-US style=\u0027tab-interval:.5in\u0027\u003e\r\n\r\n\u003cdiv class=Section1\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003eSECTION 122 OF THE\r\nINCOME TAX ORDINANCE, 2001 A \u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePATENT ABUSE OF\r\n`DUE PROCESS OF LAW\u0027\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003eBy\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center\u0027\u003e\u003cb\u003e\u003cbr\u003e\r\nDr. Ikramul Haq, Advocate, \u003cst1:place w:st=\"on\"\u003e\u003cst1:City w:st=\"on\"\u003eLahore\u003c/st1:City\u003e\u003c/st1:place\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eSection 122 of the new Income Tax\r\nOrdinance, 2001 [hereinafter: \u0026quot;the new Ordinance\u0026quot;] is proving to be a\r\nlethal weapon in the hands of Pakistani tax officials who have taken it as a\r\nlicence to destroy the sanctity of past and closed transactions that constitute\r\ntaxpayers\u0027 vested right under the law. They are using it in a hardnosed manner\r\nby finding\u0027 fault with every order passed by their predecessors under the\r\nrepealed Income Tax Ordinance, 1979 [hereinafter: \u0026quot;the repealed\r\nOrdinance\u0026quot;] and in some cases even by themselves. This is an open mockery\r\nof law and unashamed violation of basic norms of justice. This provision of law\r\nto the extent it applies to the period prior to coming into force of the new\r\nOrdinance is void ab initio and violative of fundamental rights guaranteed in\r\nthe Constitution of Pakistan.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003cu\u003eI. Illegality on account of\r\nabuse of powers:\u003co:p\u003e\u003c/o:p\u003e\u003c/u\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThe new Ordinance cannot operate\r\nfor any period prior to \u003cst1:date Year=\"2002\" Day=\"1\" Month=\"7\" w:st=\"on\"\u003e1st\r\n July, 2002\u003c/st1:date\u003e, the date from which it became operative, unless there\r\nis a saving, provision in the law itself. The following points re-scope of\r\nsection 122(5) and analogous provisions of section 65 and 66A of the repealed\r\nOrdinance deserve attention:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(1) There is no\r\nsaving provision in section 239 of the new Ordinance for issuance of fresh\r\nnotices under section 65 or 66A in respect of any order passed under the\r\nrepealed Ordinance. Pending proceedings are, however, covered under section\r\n239(4) of the new Ordinance. Hence any notice under section 122(5)(a) or\r\n122(5)(b), having the characteristics of section 65 or 66A of the repealed\r\nOrdinance, issued for assessments already completed or other orders that have\r\nattained finality is void \u003cspan style=\u0027letter-spacing:.4pt\u0027\u003eab initio.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(2) A new law\r\ncannot be applied to any period prior to the date of its coming in force unless\r\na specific saving provision is provided in the repealing law [(1984) 49 Tax 34\r\n(Trib.)], which is conspicuous by its absence in the new Ordinance. The .provision\r\nto reopen/unsettle the past and closed transactions through an amendment in\r\nsection 122 (vide Finance Ordinance 2002), without first saving the retroactive\r\napplication of sections 65 and 66A in the saving clause itself, is violative of\r\nlaw as is being explained in the forthcoming paragraphs.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003cu\u003eSection 122(5) of the new\r\nOrdinance reads as follows:\u003co:p\u003e\u003c/o:p\u003e\u003c/u\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003eSection 122(5):\r\nAn assessment order shall only be amended under subsection (1) and an amended\r\nassessment shall only be amended under Subsection (4) where the Commissioner\u0026#8209;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(a) is of the\r\nview that this Ordinance or the repealed Ordinance has been incorrectly applied\r\nin making the assessment (including the misclassification of an amount under a\r\nhead of income, incorrect payment of tax with the return of income, an\r\nincorrect claim for tax relief or rebate, an incorrect claim for exemption of\r\nany amount or an incorrect claim for a refund; or\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(b) has definite\r\ninformation acquired from an audit or otherwise that the income has been\r\nconcealed or inaccurate particulars of income has been concealed or inaccurate\r\nparticulars of income have been furnished or the assessment is otherwise -\r\nincorrect.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003eNotification No.\r\nS.R.O. 633(I)/2002 dated 4th September, 2002 issued by the Federal Government\r\nin exercise of powers conferred by section 240 of the new Ordinance inserted\r\nthe words \u0026quot;or the repealed Ordinance\u0026quot; in section 122(5). The power\r\ngiven under section 240 to the Federal Government is:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e240. \u003cu\u003eRemoval\r\nof difficulties\u003c/u\u003e.---(1) Subject to subsection (2), if any difficulty arise\r\nin giving effect to any of the provisions of this Ordinance, the Federal\r\nGovernment may, by notification in the official Gazette, make such order, not \u003cu\u003einconsistent\r\nwith the provisions of this Ordinance\u003c/u\u003e, as may appear to it to be necessary\r\nfor the purpose of removing the difficulty. [underlined for emphasis]\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003eAs evident from\r\nabove, the Federal Government has abused the powers under section 240, \u003cspan\r\nstyle=\u0027letter-spacing:.4pt\u0027\u003einter \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ealia,\r\n\u003c/span\u003efor the following:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(i) in the garb\r\nof \u0026quot;removal of difficulties\u0026quot; substantial legislation has been\r\nresorted to;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(ii) the\r\ninsertion of words \u0026quot;under the repealed Ordinance\u0026quot; is inconsistent\r\nwith provision of the new Ordinance as evident from section 239 which does not\r\nsave any fresh action under section 65 or 65A of the repealed Ordinance for the\r\ncompleted assessments and finalized orders.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(iii) a\r\nretrospective amendment has been made through S.R.O. issued under a delegated\r\nauthority, which is against the law. The Federal Government enjoys no authority\r\nto insert any provision in the new Ordinance retrospectively destroying the\r\nvested rights of the taxpayers.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eSection 6 of the General Clause\r\nAct, 1897 clearly provides that a repealing statute cannot alive any provision\r\nof the repealed law \u0026quot;unless a different intention appears\u0026quot;.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(4) In the\r\nsaving clause i.e. section 239 of the new Ordinance, there is no different\r\nintention expressed, hence any action under section 122(5) for assessments\r\ncompleted under the repealed law is- unlawful. \u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(5) In section\r\n239 there is no mention that the Legislature wants to revive section 65 or. 66A\r\nfor assessments/orders passed under the repealed Ordinance, hence subsequent\r\namendment in section 122(5) read with 240 is inconsistent hence of no legal\r\neffect.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIn the light of above, it can be\r\nconcluded that proceedings initiated under section 122 by the Taxation Officers\r\nfor earlier years are unlawful, \u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ecoram \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.4pt\u0027\u003enon judice \u003c/span\u003eand violative of fundamental\r\nrights guaranteed under the Constitution of Pakistan.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eII. \u003cu\u003ePast and closed\r\nTransaction \u0026amp; their Sanctity\u003co:p\u003e\u003c/o:p\u003e\u003c/u\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIt is an established law that past\r\nand closed transactions cannot be disturbed/unsettled unless allowed under the\r\nlaw. The honourable apex Court in ITO, Central Circle II, \u003cst1:City w:st=\"on\"\u003e\u003cst1:place\r\n w:st=\"on\"\u003eKarachi\u003c/st1:place\u003e\u003c/st1:City\u003e and another v. Cement Agencies Ltd.\r\nPLD 1969 SC 322 strongly disapproved the act of disturbing past and closed\r\ntransactions in the following terms:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u0026quot;I do not\r\nsee how on the basis of the judgment of this in Octavious Steel \u0026amp; Company\r\nLtd.\u0027s case past and closed transactions could be reopened...Mr. Nusrat has not\r\nbeen able to refer to any authority which lends support to the course adopted\r\nby the Income-tax Officer. \u003cu\u003eA decision given by a High Court in another case\r\ncannot be ground for re-opening an issue which stood finally determined by a\r\ndecision of a subordinate Court or authority\u003c/u\u003e\u0026quot;.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThis judgment of the honourable\r\nSupreme Court is unequivocal on the issue that after an order is passed and\r\nattained finality, the same cannot be disturbed if even a contrary order of the\r\nhighest Court in the country later on pronounced in another case. If tax\r\nofficials are issuing notices under section 122 (5) on the basis of some later\r\ncases, formulating the opinion that at the time of passing original order their\r\npredecessors applied the law \u0026quot;incorrectly\u0026quot;, they should reconsider it\r\nas in such a case their actions would be totally unlawful, unwarranted and\r\nuncalled for.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eThe\r\njudgment(s) they have in mind must be sub judice at the moment and\u003c/span\u003e if\r\nlater on the higher Courts reverse the same, how the Department would\r\ncompensate irreparable loss suffered by taxpayers? How can Taxation Officers\r\nclaim that the assessing officer misapplied law when no contrary judgment was\r\nin existence at the said point of time?\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThe language of section 122(5)(a)\r\ncast a heavy burden on Taxation Officers to prove that \u0026quot;law was\r\nincorrectly applied\u0026quot; by the Assessing Officer at the time of making\r\nassessments. The divergence of views that the Assessing Officer who passed the\r\nearlier order should have completed the assessment in a different\u0027 way cannot\r\nbe construed as \u0026quot;incorrect application of law\u0026quot;. The past and closed\r\ntransactions cannot be disturbed by just alleging that law was incorrectly\r\napplied. First of all they will have to prove beyond any shadow of doubt that\r\nwhile making the assessments in question the provisions of the repealed\r\nOrdinance `were incorrectly applied. In fact their action under section 122(5)\r\nis illegal unless first of all this provision is made legal by an amendment\r\nthrough a legislative process providing a specific saving clause as to\r\ninvocation of section 65 or 66A for the earlier years..\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIn a recent case reported as 2003\r\nPTD 808, the honourable Lahore High Court once again highlighted the .sanctity\r\nof finalised assessments which cannot be disturbed on mere views, gossips,\r\nconjectures or surmises and in a light manner as is being attempted by the\r\nTaxation Officers these days through issuing notices under section 122(5)\r\nindiscriminately, erratically and irresponsibly.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIt is worthwhile to mention that\r\nthe honourable Supreme Court in Income Tax Officer v. Cement Agencies Ltd.\r\n(1969) 20 TAX 1 (SC Pak.) held that: \u0026quot;...even a legislature measure like\r\nan Ordinance expressly given retroactive effect could not operate so as to\r\nannul a valid and existing judgment as between parties whose rights had been\r\ndetermined and according to law which existed before the new Ordinance was\r\npassed.\u0026quot; In another case Central Insurance Company and others v. C.B:R.\r\n1993 SCMR 1232= (1993) 68 Tax 86 (SC Pak.), it is categorical held by the\r\nhonourable apex Court that in para. 27 that `any subsequent decision. after the\r\ndisposal of the case by the Assessing Office; cannot be said to be the\r\ndiscovery of a new important matter or of a mistake or an error on the face of\r\nrecord and that mere conflict and divergence of opinion cannot give rise to\r\nreview of the judgment\u0027.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThese judgments of the honourable\r\napex Courts: confirm that even the new-Ordinance cannot apply retrospectively\r\nto annul a valid and existing judgment as between parties whose rights had been\r\ndetermined and according to law which existed before the new Ordinance was\r\npassed [see my article \u003cspan style=\u0027letter-spacing:.5pt\u0027\u003eConfusion \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.1pt\u0027\u003eabout repeal and saving \u003c/span\u003eon this subject in \u003cspan\r\nstyle=\u0027letter-spacing:.5pt\u0027\u003eTax \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eReview\r\n\u003c/span\u003e(October-December 2002) published by Lahore Law Publications or visit\r\nthe website.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIII. \u003cu\u003eRetrospective application\r\nis not permissible\u003co:p\u003e\u003c/o:p\u003e\u003c/u\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIt is an established law that any\r\nprovision, which is not procedural in nature, cannot be applied retrospectively\r\nunless inserted by explicit words to apply so by the Legislature itself. The\r\nhonourable Lahore High Court in the case of Messers Monnoo Industries Ltd. v.\r\nThe Commissioner of Income Tax, Central Zone, \u003cst1:City w:st=\"on\"\u003e\u003cst1:place\r\n w:st=\"on\"\u003eLahore\u003c/st1:place\u003e\u003c/st1:City\u003e 2001 PTD 1525 held as under:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u0026quot;Section\r\n66A of the Income Tax Ordinance, 1979 is not procedural in nature, and\r\ntherefore, it could not have retrospective effect to touch the completed\r\nassessments before its introduction on the statute book. The interpretation\r\nmade by the C.B.R. through the Circular No.1 (48)/11-1-1979 dated \u003cst1:date\r\nYear=\"1981\" Day=\"17\" Month=\"2\" w:st=\"on\"\u003e17-2-1981\u003c/st1:date\u003e appears to be\r\nmore in consonance with law. Particularly in view of the fact that revisional\r\nprovisions were not saved by section 166 of the Income Tax Ordinance providing\r\nfor repeal and saving of the late Income Tax Act, 1922\u0026quot;.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eSection 122(5)(a) is almost \u003cspan\r\nstyle=\u0027letter-spacing:.1pt\u0027\u003epari materia \u003c/span\u003eto section 66A with the\r\ndifference that the Commissioner., is not even required to establish that the\r\norder passed by the Assessing Officer was also prejudicial to the Revenue. In\r\nthe new Ordinance provisions of section 66A as such have not been saved in\r\nsection 239. But C.B.R. has certainly forgotten its Circular No.1 (48)/11-1-1979\r\ndated \u003cst1:date Year=\"1981\" Day=\"17\" Month=\"2\" w:st=\"on\"\u003e17-2-1981\u003c/st1:date\u003e\r\nreferred to in the above judgment. It shows beyond any doubt that notice under\r\nsection 122(5)(a) cannot be issued for any order made prior to 1st July, 2001.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThe honourable apex Court in a\r\nrecent case, Zakaria H.A. Sattar Bilwani and another v. Inspecting Additional\r\nCommissioner of Wealth Tax, Range-II, Karachi 2003 PTD 52 (SC Pak.), while\r\nexamining the application of the similar provision of the erstwhile Wealth Tax\r\nAct, 1963 [section 17B] held as under:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u0026quot;The\r\nlearned High Court may have examined the question of the application of section\r\n17-B Wealth Tax Act, 1963 concerning its effect retrospectively or\r\nprospectively by applying the principle of interpretation of statutes namely\r\nwhere any statute effects, substantive right it would operate prospectively\r\nunless by express enactment or necessary intendment, retrospectively unless by\r\nexpress enactment or necessary intendment, retrospective operation has been\r\ngiven. This Court elaborately examined identical question in respect of section\r\n2 as amended by, Banking Companies (Recovery of Loans) (Amendment) Act (XVIII\r\nof 1992) in the case of Malik Gul Hassan \u0026amp; Co. and 5 others v. Allied Bank\r\nof Pakistan (1996 SCMR 237). Relevant para therefrom is reproduced hereinbelow\r\nfor convenience:\u0026#8209;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u0026quot;7. It is\r\nwell-settled principle of interpretation of statute that where \u0026quot;a statute\r\neffects a substantive right, it operates prospectively unless \u0027by express\r\nenactment or necessary intendment\u0027 retrospective operation has been given--\r\nMuhammad Ishaq v. State PLD 1956 SC (Pak.) 256 and State V. Maulvi Muhammad\r\nJamil, PLD 1965 SC 681. This principle was affirmed in Abdul Rehman v.\r\nSettlement Commissioner (PLD 1966 SC 362). However, statute, which is\r\nprocedural in nature, operates retrospectively unless it affects an existing\r\nright on the date of promulgation or causes injustice or prejudice to a\r\nsubstantive right....\u0026quot;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThe assessments concluded under\r\nthe repealed Ordinance of 1979 and other proceedings finalised cannot be\r\ndisturbed/unsettled through section 122(5)(a) which is not a procedural section\r\nand amendment made in the law through S.R.O. 633(I)/2002 dated 14th September,\r\n2002 is unlawful as discussed above.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eEarlier the honourable Lahore\r\nHigh Court held in Commissioner of Income Tax v. M. Fahad Amin (2002) 86 Tax\r\n165 (HC Lah.) = 2002 PTD 248 that:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e\u0026quot;In the\r\npresent case admittedly section 17-B empowering an IAC was inserted by Finance\r\nAct, 1922 and was to take effect from \u003cst1:date Year=\"1992\" Day=\"1\" Month=\"7\"\r\nw:st=\"on\"\u003e1st July, 1992\u003c/st1:date\u003e. Therefore, the power vested in IAC through\r\namended provisions was available for the assessment year 1992-93 onwards only.\r\nThe IAC\u0027s action in touching the assessment order prior to the aforesaid\r\nassessment years when power that vested only in the Commissioner of Wealth Tax\r\ncertainly not in accordance with law.\u0026quot;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIt is an irrefutable principle\r\nthat an amendment in law or a repealing enactment cannot destroy the vested\r\nright, yet the Taxation Officers are issuing notices under sections 122 for\r\nearlier years violating the explicit law and precedents of the higher Courts\r\nwhich are, biding on them under Articles 189 and 201 of the Constitution of\r\nPakistan.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eIV. \u003cu\u003eArticle 4 of Constitution\r\nand due process of Law\u003co:p\u003e\u003c/o:p\u003e\u003c/u\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThere are certain basic norms of\r\njustice that have to be adhered to in all the judicial and quasi-judicial\r\nproceedings. One of the cardinal principles of such basic norms is that one\r\ncannot be a judge of his own cause. \u0027Section 122 as it stands now make the\r\nCommissioner of Income Tax a judge of his own cause as first of all he\r\ndelegates all his powers to a Taxation Officer and once an order is made by\r\nhim, he would declare that the delegated officer applied the law incorrectly!\r\nWhat a mockery of `due process of law\u0027 that in fact he is posing as Judge of\r\nhis own cause. How can he declare his own orders [though passed by somebody\r\nelse on his behalf as envisaged in section 211] as incorrect? This would\r\ncertainly be a wanton breach of the basic norm of the justice that no one can\r\nbe a judge of his own cause. This breach will in fact be violative of \u0027the\r\nright of access to justice\u0027 which is well-recognised inviolable fundamental\r\nright enshrined in Article 4 of the Constitution. This right is equally founded\r\nin the doctrine of \u0027due process of law\u0027 New. Jubilee Insurance Company Limited,\r\n\u003cst1:City w:st=\"on\"\u003eKarachi\u003c/st1:City\u003e v. National Bank of \u003cst1:country-region\r\nw:st=\"on\"\u003ePakistan\u003c/st1:country-region\u003e, \u003cst1:place w:st=\"on\"\u003e\u003cst1:City w:st=\"on\"\u003eKarachi\u003c/st1:City\u003e\u003c/st1:place\u003e\r\nPLD 1999 SC 1126.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThe \u0027right of access to justice\u0027\r\nincludes the right to be treated according to law, the right to have a fair and\r\nproper opportunity of being hard and trial and the right to have a fair and\r\nimpartial Court/Tribunal/Authority.. The term due process of law, as elaborated\r\nby the honourable apex Court in the case of New Jubilee Insurance Company Ltd.\r\n(supra) can be summarised as under:\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;text-indent:.5in\u0027\u003e(1) A person\r\nshall have notice of the proceedings which effect his rights;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;text-indent:.5in\u0027\u003e(2) He shall be\r\ngiven reasonable opportunity to defend;\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify\u0027\u003e(3) That the\r\nTribunal, .Court of authority before which his rights are adjudicated is so\r\nappointed/constituted as to give reasonable assurance of its honesty and\r\nimpartiality; and\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;text-indent:.5in\u0027\u003e(4) That it is a\r\nCourt/Authority of competent jurisdiction.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003eThese are the basic requirements\r\nof the doctrine \u0027due process of law\u0027 that are embodied inter alia in Article 4\r\nof the Constitution. It is intrinsically linked with the right to have access\r\nto justice which is a\u0027 fundamental right. This right, \u003cspan style=\u0027letter-spacing:\r\n.1pt\u0027\u003einter alia, \u003c/span\u003eincludes the right to have protection against abuse of\r\npowers. The Commissioner of Income \u003cspan style=\u0027letter-spacing:.5pt\u0027\u003eTax \u003c/span\u003eunder\r\nsection 122 has assumed the role of a Judge of his own cause and, therefore,\r\nany action under this provision of the new Ordinance amounts to a manifest and\r\nblatant violation of due process of law. Needless to say that this provision as\r\nit stands now is un-constitutional in view of Article 4 of the 1973\r\nConstitution.\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003c/div\u003e\r\n\r\n\u003c/body\u003e\r\n\r\n\u003c/html\u003e\r\n"