LAHORE ELECTRIC SUPPLY COMPANY LTD. VS FEDERATION OF PAKISTAN through Secretary Finance, 2019 PTD-LAHORE-HIGH-COURT-LAHORE 1116 (2019)

Income Tax Ordinance (XLIX of 2001)---

----Ss. 140 & 170---Constitution of Pakistan, Art.199---Constitutional petition---Notice of recovery of tax---Persons holding money on behalf of taxpayer---Refunds---Appellant assailed notice of recovery of tax issued by income tax authorities on the ground that its refund claim for larger amount was pending undetermined with the department and it was appropriate to adjust the said amount instead of raising demand ---Validity---Refund claim of appellant had not yet been determined, therefore, said amount could not be adjusted against the amount of demand notice---Ground raised by appellant required factual determination of its refund claim which was not permissible under constitutional jurisdiction---High Court directed appellant to raise the refund claim where his appeal was pending and appellate authority was directed to expeditiously decide the said appeal---Intra-court appeal was disposed of accordingly.

Shahbaz Butt for Appellant.

Zahid Sikandar Sheikh, Assistant Attorney General.

Ibrar Ahmad for Respondent No.5.

ORDER

Through this Intra Court Appeal, the appellant has called in question the order dated 07.11.2018 passed by learned Single Judge in Chambers, whereby the constitutional petition, filed by the appellant, was dismissed.

2.It has been argued on behalf of the appellant that respondent No.5 had issued notice dated 09.09.2013 under Section 140 of the Income Tax Ordinance, 2001 ("Ordinance") demanding an amount of Rs.205,578,550/- whereas the refund claim of the appellant for larger amount is still pending undetermined by the respondents and it would be appropriate to adjust the said amount instead of raising demand against the appellant which is without any legal justification. Consequently prays that the order passed by the learned Single Judge, dismissing the constitutional petition, be set-aside, demand notice be declared as without jurisdiction and amount of the appellant received forcibly be returned.

3.On the other hand, learned Law Officer as well as learned counsel for respondent No.5 defend the impugned order and pray for dismissal of this appeal.

4.Learned Single Judge, while dismissing the constitutional petition challenging notice under Section 140 of the Ordinance, observed that as the refund claim of the appellant has not yet been determined, therefore, said amount could not be adjusted against the amount of Rs.205,578,550/- demanded through impugned notice. Learned counsel for the appellant now contends that appeal of the appellant is pending before respondent No.4/ Commissioner Inland Revenue (Appeals) and it was for the department to determine appellant's refund claim without which the burden could not have been placed on the appellant for department's omission and accounts of the appellant have wrongly been attached.

5.The ground raised by the appellant requires factual determination of his refund claim which is not permissible under the constitutional jurisdiction of this Court, therefore, we are inclined to direct the appellant to raise the refund claim before respondent No.4, where his appeal is already pending and the said respondent is directed to expeditiously decide the same preferably within a period of 60 days from receipt of the order of this Court.

6.In view of the above, the impugned order is accordingly modified in the afore referred terms and the instant appeal is disposed of.

SA/L-1/LOrder accordingly.