| STR (Sales Tax Reference)-STR (Sales Tax Reference) 41-24 (RUKSHANDA ASAD VS CIR ETC) by Mr. Justice Asim Hafeez Tag Line: Right of appeal available at the time of promulgation of Amendment Act extinguishes if amendment is made effective retrospectively or… |
Form No: HCJD/C-121
ORDER SHEET
IN THE LAHORE HIGH COURT,
RAWALPINDI BENCH, RAWALPINDI
JUDICIAL DEPARTMENT
STR No.41/2024
Rukshanda Asad Versus Commissioner Inland
Revenue and others
S.No. of order/
proceeding
Date of order/
Proceeding
Order with signature of Judge, and that of parties of
counsel, where necessary
29.04.2025 Mr. Muhammad Mohsin Nazir, Advocate for
the applicant.
Hafiz Muhammad Idrees, Advocate for the
applicant in STR No.21/2024.
M/s Malik Itaat Hussain Awan and Manzoor
Hussain, Advocates for respondents-department
along with Yousuf Khan, Section Officer, I.R
(Legal) H.Q. RTO, Rawalpindi.
Instant Larger Bench is constituted under the
orders of Hon‟ble Chief Justice, in the backdrop
of „order of referral‟ dated 03.12.2024. Context
is explained by reproducing the operative part of
the order, which reads as,
“We have noted that the moot point previously
has been dealt with by different learned
Division Benches in S.T.R No.36731/2024 and
S.T.R No.34742/2024, wherein one Division
Bench held that right of appeal/reference
application stands crystallized on the date when
show cause notice is issued and the order-inoriginal is passed. On the contrary, the view of
other learned Division Bench is that such right
would ensue from the date of passing of the
impugned order under challenge in appeal.
Leaving aside other questions arising from the
above noted amendment in the Sales Tax Act,
1990 to this effect, there is apparent disparity in
both the view mentioned hereinabove.
- In order to reconcile this legal
proposition, we deem it apt to direct the Office
to place this matter before the Hon’ble Chief
Justice for constitution of a larger Bench”. - Background of the reasoning for fixation of
these reference applications, details whereof are
provided in accompanying Annex-A, before this
STR No.41/2024 2
Larger Bench could be traced to the
promulgation of the Tax Laws (Amendment) Act,
2024, (“Amendment Act”). Before introduction
of the Amendment Act, remedy of preferring
appeal, inter alia against the order of
Commissioner (Appeals), was available with the
Appellate Tribunal Inland Revenue (Appellate
Tribunal), accordingly in terms of section 46 of
the Sales Tax Act 1990 (“Act 1990”) and section
131 of the Income Tax Ordinance 2001,
(“Ordinance 2001”). And after the Amendment
Act, remedy by way of reference application,
against the order of Commissioner (Appeals), is
made available before the High Court(s), subject
to the pecuniary limits prescribed respectively in
the context of the Act 1990 and Ordinance 2001.
In essence, the Amendment Act had the effect of
abolishing, previously available remedy of
appeal before the Appellate Tribunal, against the
order of the Commissioner (Appeals), which
curtailment led to surfacing of controversy at
hand; which is whether the remedy of appeal,
available at the time of commencement of the lis
– [either upon issuance of show cause,
adjudication thereupon or upon passing of orderin-original as the case may be] – could be
abolished through legislative instrument, before
the lis concludes, and if the Amendment Act is
so interpreted, what would be the effective date
for the purposes of filing of reference application
or for that matter what would be the date of
commencement of the Amendment Act.
In this backdrop different Benches had
expressed divergent opinions / decisions and
order of referral was made. Reconciliation of
divergent opinions and determination of the date
STR No.41/2024 3
of the commencement of the Amendment Act is
the scope of this Larger Bench. - It is pertinent to mention that divergent
opinions were expressed in cases coming before
different Benches before clarity is brought by the
legislature through insertion of Explanation to
section 133 of the Ordinance 2001 through
promulgation of the Finance Act 2024, which
explanation reads as,
“Explanation.- For the removal of doubt it is
clarified that reference against order of the
Commissioner (Appeals), communicated after
the date of commencement of the Tax Laws
(Amendment) Act, 2024 (V of 2024), shall lie
before the High Court notwithstanding the
proceedings pending prior to the date of
commencement of the said Act”
[Emphasis supplied] - We heard learned counsel on both sides of
the aisle and found unanimity, a rare
phenomenon otherwise, qua the issue of
determination of the date of commencement of
the Amendment Act, for the purposes of filing
of instant reference applications and
maintainability thereof. - There is no cavil that remedy of appeal,
being a substantial-cum-vested right, when
available at the commencement of the lis, would
continue to be available throughout the career of
the litigation, till same is concluded upon
exhausting the remedies available in the statute,
at the commencement of the lis or during its
pendency, unless the amending or repealing act,
as the case may be, either expressly or by
necessary implication / intendment curtails
remedy of appeal. In this case no effort is
required for ascertaining status of availability or
otherwise of the remedy of appeal by necessary
STR No.41/2024 4
implication / intendment, when the Explanation
inserted through Finance Act 2024 sufficiently
addresses the question, conspicuously clear and
explicitly. Reference is made to the ratio settled
in the cases of Muhammad Ishaq V. The State
[PLD 1956 Supreme Court (Pak.) 256] and
Idrees Ahmad and others V. Hafiz Fida Ahmad
Khan and 4 others (PLD 1985 Supreme Court
376). - Controversy summed up: In terms of the
Explanation to section 133 of the Ordinance
2001, remedy of filing of reference application,
subject to the limits of pecuniary jurisdiction
prescribed, is available against the order of the
Commissioner (Appeals) communicated after the
date of commencement of the Amendment Act,
notwithstanding pendency of the proceedings
before the Commissioner (Appeals), prior to the
commencement of the Amendment Act. And for
the purposes of present controversy the
Amendment Act shall commence from the date
of commencement of the Amendment Act, when
assent was extended by the President, which was
3
rd
of May 2024. Issues stand settled. It is
pertinent to mention that determination qua date
of commencement of the Amendment Act and
issue of availability of remedy of reference
application is also valid for the purposes of
remedy in terms of section 47 of the Act 1990,
for the reason that sub-section (2) of section 47
of the Act 1990, makes application of the
provisions of section 133 of the Ordinance 2001
and rules made thereunder, mutatis mutandis, to
the reference application under the Act 1990. It is
noted that determination of the issue through this
order is without prejudice to the individual
STR No.41/2024 5
grievances of the applicants, which may be raised
in the context of their respective reference
application(s) and facts involved. - In view of the aforesaid, matter referred to
us is settled in terms of findings / observations in
preceding paragraph. Hence, Reference
applications, listed in Annex-A, shall be placed
before respective Division Benches, assigned
with the task of hearing tax Reference
Application(s).
(ASIM HAFEEZ)
JUDGE
(JAWAD HASSAN) (MIRZA VIQAS RAUF)
JUDGE JUDGE
Imran/*