Law: Income Tax Ordinance, 1979

Section: 50(4)

JUDGMENT EJAZ AFZAL KHAN,J.-By this single judgment, we dispose of S.A.Os. Nos.29 to 32 of 2000 and S.A.Os.Nos.3 to 5 of 2000 filed by Messrs Al-Khair Gadoon Ltd. and the Commissioner Income Tax /Wealth Tax, Companies Zone Peshawar, respectively under section 136 of the Income Tax Ordinance, as a common question of law is involved therein. The controversy for the decision of this Court in all these appeals gives rise to only two formulations which read as under:- (1) Whether on the facts and circumstances of the case the learned Income Tax Appellate Tribunal Peshawar was justified to include in its judgments, dated 6-4-2000 under appeal in Appeals Nos.29 to 32 of 2000, the cash purchases from the purview of section 50(4) of the Income Tax Ordinance? (2) Whether on the facts and circumstances of the case, the learned Income Tax Appellate Tribunal Peshawar was justified to exclude in its judgment, dated 15-10-1999 under appeal in Appeals Nos.3 to 5 of 2000, the cash purchases from the purview of section 50(4) of the Income Tax Ordinance, 1979? 2. Appellants in Appeals Nos.29 to 32 of 2000 and for that matter the respondents in Appeals Nos.3 to 5 of 2000 do not dispute the purchase of goods from the supplier thereof against payments made by them. They also do not dispute that none of their purchases was subjected to deduction of income tax at the source. But their case, however, is that supply of goods does not include both cash and credit purchases of goods by the payer, therefore, it cannot be brought within the mischief of section 50(4) of the Income Tax Ordinance, 1979. The explanation, as per their instance, inserted by virtue of amendment in Finance Act, 1998 (Act No. III of 1998) promulgated on 1st July, 1998, whereby the expression supply has been held to include both cash and credit purchase of goods by the payer will not have any application on their cases which relate to the assessment year of 1994-95, 1995-96, 1996-97 and 1997-98 as no law imposing a liability can be retrospective. Reliance was also made on the cases of Commissioner Income Tax Karachi v. Eastern Federation Union Insurance Co. (PLD 1982 SC 247), Aftabuddin Qureshi and another v. Mst.…

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