Z & J HYGINIC PRODUCTS (PVT.) LTD. VS FEDERATION OF PAKISTAN, 2018 PTD-LAHORE-HIGH-COURT-LAHORE 419 (2017)

Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---

----Ss.2(3) & 9(2)(b)---Income Tax Ordinance (XLIX of 2001), S.127---Maladministration---Appellant had contended that Federal Tax Ombudsman had the exclusive jurisdiction to entertain a complaint where maladministration was involved and that Federal Tax Ombudsman had passed impugned order without taking into consideration the fact of said maladministration---Validity---Impugned order had been passed mainly on the two grounds viz; that appellant had the remedy of appeal available to him under S.127 of the Income Tax Ordinance, 2001; secondly that S.9(2)(b) of the Establishment of Office of Federal Tax Ombudsman Ordinance, 2000 had clearly barred the jurisdiction of the Ombudsman in matters which pertained to determination of tax liability under Income Tax Ordinance, 2001---Single Judge of the High Court in the impugned order had elaborately dealt with said issues---Where specific remedy under the law was available, applicant could not file complaint before Federal Tax Ombudsman---Federal Tax Ombudsman, in the present case, assumed the jurisdiction without any lawful authority---Remedy under the law of appeal and review being available to the appellant, Federal Tax Ombudsman had rightly passed the impugned order---Single Judge of High Court had rightly dismissed constitutional petition being not maintainable---Intra Court appeal was dismissed.

Hafiz Muhammad Arif Dar v. Income Tax Officer PLD 1989 SC 109 and Federation of Pakistan through Secretary Establishment Division Government of Pakistan, Islamabad v. Muhammad Tariq Peerzada and 2 others 1999 SCMR 2189 ref.

Waheed Shahzad Butt for Appellant.

Muhammad Javed Ahmed Kasuri, Deputy Attorney-General for Respondents.

ORDER

JAWAD HASSAN, J.---Through this Intra Court Appeal, filed under Section 3 of the Law Reforms Ordinance, 1972, the Appellant has called in question the validity of order dated 18.09.2017 passed by the learned Single Judge whereby he dismissed his petition.

2.Brief facts of the case are that feeling aggrieved by the amended assessment order dated 28.05.2010 the Appellant challenged the same before the Commissioner Appeal who upheld the said order on 20.09.2010. The same was further challenged before the Appellate Tribunal Inland Revenue in Appeal which was set aside vide the order dated 26.08.2013 and the case was remanded to the Assessing Officer for de novo consideration. The Assessment Officer again passed the assessment order dated 12.12.2013 against which the Appellant filed rectification application and also filed a complaint before the Federal Tax Ombudsman (the "FTO") which was disposed of. The Appellant filed the review application with the FTO which was allowed vide order dated 19.08.2014 with certain directions to the concerned Commissioner and vacated the order dated 12.12.2013. The Respondent No.2 being aggrieved of the order of the FTO dated 19.08.2014 filed representation which was allowed by the Respondent No.1 vide the order dated 01.04.2016 declaring that the FTO had no jurisdiction in the matter. Accordingly, the Appellant challenged the said order before this Court through writ petition which was dismissed. Hence, this Appeal.

3.Learned counsel for the Appellant inter alia submitted that the learned Single Judge has failed to appreciate the fact that the order dated 12.12.2013 was tantamount to maladministration of justice as after the setting aside of the assessment, the Assessment Officer blindly repeated the same; that as the maladministration of the department was proved, as such the FTO rightly took the jurisdiction of the matter and passed the order dated 19.08.2014; that the order dated 01.04.2016 was passed without taking into consideration that the provisions of Section 9 (2)(b) of the Federal Tax Ombudsman Ordinance, 2000 (the "FTO Ordinance"), was to be read in conjunction with the provisions of Section 2(3)(i)(ii) of the FTO Ordinance, as such the FTO had rightly assumed the jurisdiction; that in the similar case the Respondent No.1 has rejected the representation but in the case of the Appellant he accepted, as such a discriminatory attitude has been adopted towards the Appellant; that the learned Single Judge has misconstrued the law while passing the impugned order. Learned counsel for the Appellant has placed reliance on the case titled Hafiz Muhammad Arif Dar v. Income Tax Officer (PLD 1989 SC 109), Federation of Pakistan through Secretary Revenue Division, Islamabad and others v. Messrs Sahib Jee and others (Civil Anneal No.1074/2009) and Federation of Pakistan through Secretary Establishment Division Government of Pakistan, Islamabad v. Muhammad Tariq Peerzada and 2 others (1999 SCMR 2189).

4.On the other hand learned Deputy Attorney-General vehemently controverted the arguments raised by the learned counsel for the Appellant and prayed for dismissal of the Appeal.

5.Arguments heard, record perused.

6.The main thrust of the arguments advanced by the learned counsel for the Appellant is that the FTO has the exclusive jurisdiction to entertain the complaint as the maladministration was involved and the Respondent No.1 passed the order dated 01.04.2016 without taking into consideration the fact of maladministration. The perusal of order dated 01.04.2016 clearly reveals that the same has been passed mainly on the two grounds viz: that the Appellant had the remedy of Appeal available under Section 127 of the Income Tax Ordinance, 2001 (the "ITO 2001") and secondly that Section 9(2)(b) of the FTO Ordinance clearly bars the jurisdiction of the FTO in matters which pertain to determination of tax liability under the ITO, 2001. The learned Single Judge in the impugned order has elaborately dealt with these issues. It was observed therein that against the order dated 12.12.2013 remedies of Appeal and Review to the Appellant were available under sections 127 and 221 of the ITO, 2001, as such the jurisdiction of the FTO was specifically ousted. This Court in case titled Punjab Employees, Social Security Institute v. Zulfiqar Ali and 2 others (PLD 2017 Lahore 457) has held as under:-

"Provincial Ombudsman had no jurisdiction to take up and investigate the complaint as it pertained to determination of contribution for which alternate remedy was available to Establishment under Section 57 of Provincial Employees' Social Security Ordinance, 1965. Entire exercise by Establishment to bypass statutory remedy under Section 57 of Provincial Employees' Social Security Ordinance, 1965 and orders passed by Ombudsman were without jurisdiction and against Fundamental rights guaranteed under the Constitution. Institution could not be compelled to implement order passed by Ombudsman as the same were without jurisdiction and were set aside."

7.From the above, it is clear that where the specific remedy under the law is available, the Appellant could not file complaint before the FTO and therefore, the FTO assumed the jurisdiction without any lawful authority. We, therefore, suffice to say that remedy under the law of Appeal and Review was available to the Appellant, therefore, the Respondent No.1 rightly passed the order dated 01.04.2016 by holding that the recommendations made in the impugned review order are therefore, absolutely beyond jurisdiction and without legal support.

8.Secondly, the learned Single Judge has hold that plain reading of Section 9(1) of the Order shows that FTO may on a complaint by aggrieved person investigate any allegation of maladministration on the part of revenue division or any tax employee. However, the said power of FTO under subsection (1) is not absolute but subject to subsection (2) of section 9 of the FTO Ordinance. Subsection (2) of section 9 of the FTO Ordinance is an ouster clause, which manifestly postulates that FTO shall have no jurisdiction to investigate or inquire into matters which relates to assessment of income or wealth, determination of liability of tax or duty in respect of which legal remedies of Appeal, review or revision are available under the relevant legislation.

9.Admittedly, the remedy of Appeal is available to the Appellant under the ITO, 2001 and further Section 9(2) of the FTO Ordinance bars the jurisdiction of the FTO. The judgments cited by the learned counsel for the Appellant do not support him as each and every case has its own facts and circumstances, therefore, the same cannot be relied upon.

10.We, therefore, fully agree with the finding of the learned Single Judge who dismissed the petition being not maintainable on the above-said grounds. In view of above circumstances, we see no illegality or jurisdictional error in the impugned order which has been passed in line with the dictates of law and does not warrant any interference by this Division Bench.

11.Resultantly, the instant Appeal is devoid of any merit and is accordingly dismissed in limine.

HBT/Z-23/L Appeal dismissed.