Law: Income Tax Ordinance, 1979

Section: 17,17(1)(a),32

Law: Constitution of Pakistan, 1973

Section: 189,201

(a) Income Tax Ordinance (XXXI of 1979) [since repealed]-------Ss. 17 & 32---Interest on securities of the Federal/Provincial Government---Exempted from tax---Method of accounting for computation of income---Method regularly adopted by assessee---Respondent-Banks filed their returns of income tax for the relevant assessment years declaring interest on Government securities on "receipt basis"---Declaration so made was accepted by assessing authority---Assessments were framed and orders were passed treating the same as a past and closed transaction---Subsequently assessing authority issued notices to the banks to show cause as to why the assessments carried out earlier not be opened and revised---Legality---Section 32 of Income Tax Ordinance, 1979 provided an exception to the computation of income including interest on any securities of the Federal Government or a Provincial Government received by an assessee in any income year---Banks were justified in adopting the method of accounting which was hybrid and had been consistently used by the banks since long---Appeal filed by assessing authority was dismissed accordingly. (b) Estoppel--- ----No estoppel against the law. (c) Constitution of Pakistan--- ----Arts. 189 & 201---Law enunciated by the High Courts and the Supreme Court---Binding precedent---Law enunciated by the High Courts under Art. 201 of the Constitution became a binding precedent for all the forums within the Province---Law enunciated by the Supreme Court under Art. 189 of the Constitution became binding precedent for all forums in the country. JUDGMENT JAWWAD S. KHAWAJA, J.---These three appeals, by leave of the Court, challenge the judgments of the High Court, dated 3-4-2014 and 26-3-2014. Leave to appeal was granted on 17-10-2006, through a detailed leave granting order. The said order being relevant is reproduced as under:-- "These petitions are directed against identical judgments of the Sindh High Court dated 3-4-2004 and 26-3-2006 allowing respondents' writ petitions challenging the vires of notices issued by Income Tax Authorities under section 65 of the Income Tax Ordinance, 1979 (hereinafter referred as the Ordinance 1979) whereby…

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