PAK GULF CONSTRUCTION (PVT.) LIMITED VS FEDERATION OF PAKISTAN, 2013 PTD-ISLAMABAD 21 (2012)

Federal Excise Act (VII of 2005)---

----Preamble---Constitution of Pakistan, Art. 199---Constitutional jurisdiction----Scope---Alternate Remedy---Petitioners, who were in the business of construction, sale and purchase of shops and apartment; were issued notice under the Federal Excise Act, 2005---Contention of the petitioners was that said notice was illegal and without jurisdiction and that under the Federal Excise Act, 2005; they could not be asked to pay any excise duty---Validity---Petitioners had not contended that any provision of the Federal Excise Act, 2005 was illegal; but rather that the provisions of the said Act did not apply to their case---Petitioner's had challenged the applicability of the Federal Excise Act, 2005 to their caseand the same would be decided by the Authority provided under the Federal Excise Act, 2005---In presence of such alternate remedy; no writ could be issued---Constitutional petition was dismissed, in circumstances.

1997 SCMR 1244; 1993 SCMR 73 and 1996 SCMR 237 ref.

Hafiz Muhammad Idrees and Syed Touqeer Bukhari for Petitioners.

Saeed Ahmed Zaidi, Hafiz Munawar Iqbal and Babar Bilal for Respondents.

Muhamamd Abid Raja, D.A.G. for the State.

Date of hearing: 2nd July, 2012.

JUDGMENT

RIAZ AHMAD KHAN, J.---This judgment is directed to dispose of instant Writ Petition No. 1626 of 2011 as well as Writ Petitions Nos.811 of 2010 and 442 of 2012.

2.All the three petitioners deal in construction, sale and purchase of shops and apartments. According to petitioners, they purchase land, construct apartments and thereafter, sell those apartments to the general public. The petitioners were issued notice under section 45 of the Federal Excise Act, 2005, wherein they were asked to provide information for all their projects to ascertain whether the liability of federal excise duty has rightly been discharged or not. Feeling aggrieved of the said notice, the petitioners filed above said writ petitions with the prayer that amendment made through Finance Act, 2008 in the Federal Excise Act, 2005 be declared as illegal, ultra vires of the Constitution and resultantly, notice issued to them be declared as illegal and without jurisdiction.

3.Learned counsel for the petitioner submitted that section 3 of Federal Excise Act, 2005 is a charging section, which has not been amended and as such, no charge has been created against the property developers. The petitioners purchase land, then construct house over the same and thereafter, offer those houses for sale. The property for sale neither falls in the definition of goods nor in the definition of services. The Federal Excise Act is regarding goods and services, so the petitioners cannot be asked to pay the excise duty. Subsection (19-A) was added to section 2, wherein property developers were defined, but for charging excise duty, they were mentioned in the first schedule, table-II, which is regarding services. In such a way, another anomaly was created that in the definition clause it was provided that property developers develop property for sale, which would mean that they have to be charged for offering goods for sale, but in the charging section, it was provided that property developers offer services. It was further contended that the petitioners do not offer any service and the activity of the petitioner cannot be considered as service and therefore, no charge can be created against the construction made by the petitioners. Learned counsel in support of his contention, referred to 1997 SCMR 1244, 1993 SCMR 73 and 1996 SCMR 237.

4.Learned counsel for the respondents as well as Deputy Attorney General submitted that the issue involved is a factual controversy and that the writ is not maintainable for the reason that the petitioners had the alternate remedy. It was further submitted in Writ Petition No. 442 of 2012, that the petitioners filed reply, order-in-original was passed, against which appeal was filed before Commissioner (Appeals), thereafter, the present writ petition was filed, in which order-in-originalhas been challenged.

5.I have heard learned counsel for the parties and have also perused the record.

6.The case of the petitioners is that they are not liable to pay the excise duty, as the same is not covered by any provision of Federal Excise Act, 2005. No provision of the Act has been challenged at the touchstone of fundamental rights or any provision of Constitution. It is not the case of the petitioners that any provision of Federal Excise Act is illegal, rather their case is that the provisions of Federal Excise Act do not apply to their case. As such, it cannot be said that the petitioners have challenged the vires of any provision of law, rather they have challenged the applicability of Federal Excise Act to their case. The samecanbedecidedbytheauthorityprovidedundertheFederalExcise Act, 2005 and in presence of alternate remedy no writ can be issued.

7.As far as Writ Petition No.442 of 2012 is concerned, it was admitted that order-in-original was challenged before Commissioner Appeals, which was dismissed. Once the petitioners had adopted a hierarchy provided in the Federal Excise Act, then the petitioners at their own sweet-will cannot switch over to another hierarchy; thus, writ petition is not maintainable.

8.In view of the above circumstances, these writ petitions are devoid of any merits and the same are hereby dismissed.

KMZ/108/IslPetition dismissed.