GENERAL CONDITIONS FOR THE EXERCISE OF ALL STATUTORY POWERS.

GENERAL CONDITIONS FOR THE EXERCISE OF ALL STATUTORY POWERS <!--[if gte mso 10]> GENERAL CONDITIONS FOR THE EXERCISE OF ALL STATUTORY POWERS. By Muhammad Naeem Shah, Advocate Supreme Court 1. THE EXERCISE OF STATUTORY POWER IS SUBJECT TO THE RULE OF ULTRA VIRES. It means that a statutory authority can exercise only those powers which are expressly or implicitly authorised by the statute and what the statute does not expressly or impliedly authorise must be taken to be prohibited. 2. STATUTORY POWERS MUST BE EXERCISED REASONABLY Even when a statutory power is discretionary, it must be exercised reasonably. The exercise of power must not be arbitrary or capricious. 3. STATUTORY POWER MUST BE EXERCISED BONA FIDE. This means that a statutory power must not be used for a purpose other than that for which it was given by the legislature. 4. STATUTORY AUTHORITY MUST APPLY HIS MIND When an authority seeks to exercise statutory power-whether purely administrative or discretionary or quasi-judicial, without applying his mind, to the question before him or the conditions and considerations relevant to the exercise of the power and the facts and circumstances before him, it ceases to be bona fide exercise of that power. 5. STATUTORY ORDER MUST BE BASED ON REASONS Where the order of a statutory authority affect the rights of individuals, the authority should record its reasons, so that the remedy by way of judicial relief against arbitrary action is not frustrated. 6. STATUTORY POWER MUST BE EXERCISED BY THE AUTHORITY IN WHOM IS VESTED. The general rule is that where a statute directs that certain acts shall be done by a specified person, their performance by any other person is impliedly prohibited, whether the act is discretionary or quasi-judicial. 7. RULE AGIANST ABDICATION OF DISCRETIONARY POWER. When discretion is vested in a statutory authority, he must exercise that discretion himself independently of the instruction issued by a superior or other authority. Where the power is discretionary, the statutory authority may adopt general rules of policy to guide himself in the manner of exercising his discretion, but he must come to his decision by applying those principles to the facts and circumstances of each case. These principles should not be to rigid to fetter the authority in the exercise of his discretion. 8. RULE AGAINST USURPATION It means that even an appellate authority can not altogether usurp the functions of the original authority. 9. RULE AGAINST DELEGATION OF POWER The instant rule follows from the general maxim-Delegatus non potest delegare, which means that a delegatee can not delegate his power, unless he is expressly authorised so do. When a statute confers a power on a specific authority such power must be exercised by that named authority. 10. RULE AGAINST CURTAILMENT OF STATUTORY POWER. This follows the principle that a Court cannot compel an authority to exercise its discretion in a particular manner. Where a statute confers a discretionary power upon an authority to do one or two things in the alternative, it cannot be compelled to do any one of the alternative things, without showing that it had become impossible for the authority to exercise its option to do any of the other alternative. 11. STATUTORY POWER NOT LOST BY DISUSE. A statutory right or power is not lost by disuse or lapse of time. 12. NO ESTOPPEL AGAINST STATUTORY DUTY. No statutory authority, who carries on a public function, can exonerate itself from his statutory duties by any act or representation so as to raise the plea of estoppel against itself. 13. VALIDITY OF CONDITIONS IMPOSED BY STATUTORY AUTHORITY. When some activity is controlled by legislation, the statute usually authorises an authority to grant permission to carry on that activity subject to those conditions as it may impose. However, such conditions should not uncertain, unreasonable, illegal and unconstitutional otherwise, these would be liable to be struck down by the Court. 14. STATUTORY POWER AND DUTY (a) Where a permissible statute merely confers a discretionary power as distinguished from duty, the statutory authority cannot he compelled to exercise that power, or to pay damages for mere non-exercise of the power. (b) Where the statute does not impose any duty or obligation to exercise a power, the authority cannot place itself "in the same position as if that task had been imposed as duty upon them" by part performance of the work. In other word, merely because they undertake a work, which they could not compelled to do, they cannot he compelled to complete the work merely because they had done a part of it. (c) Where the statute does not enable a person or authority to exercise some power, but provide for the performance by person or an authority of certain duties created by the statute. But every statute that creates a duty is not necessarily enforceable in a Court of law. A distinction is still made between directory and mandatory statutes. (i) The Courts cannot compel the performance of a duty if the statute is merely directory. (ii) Violation of a mandatory statute entails legal consequences but the question arises as to what remedy would be available for its enforcement. The same act may contain both mandatory and directory provisions. The fact that an authority endowed by the legislature with special power to do an act does not ipso facto mean that the legislature has exempted it from liability, which an individual or a body of individuals would have, under the ordinary law, or causing damage to another person by the acts which are ultra vires or in excess of jurisdiction or discretion or the policy or objects of the Act, or by doing a lawful act in a negligent manner, i.e., without taking such amount of care as would be reasonable in the circumstances. Even though an authority may have been set up endowed with powers by a statute, it may be liable at law not only where its acts are ultra vires or, have exceeded the powers conferred, but also where it has failed to perform its statutory duty or has committed negligence or other illegality in its performance, these will be treated separately. A. LIABILITY FOR ULTRA VIRES ACT. When a statutory authority exceeds the limits of its powers, it forfeits the protection of the statute and renders itself liable to the remedies available under the general law against an unlawful act. Thus, - (i) Apart from a declaration of an act is ultra vires, the parties likely to be affected by it is entitled to an injunction to restrain the commission of such act before it is actually done, or against its continuance. (ii) The aggrieved person may recover damages for injury caused by such act. B. LIABILITY IN TORTS FOR BREACHES OF STATUTORY DUTY. The failure of statutory authority to perform its statutory duties may take place by an act of commission or of commission (e.g. failure to keep a school building in repairs according to a prescribed standard). Where a statutory authority has duties imposed upon it by statute, the question arises whether a private individual who is injured by a failure of the authority to carry out its duties is entitled, to bring an action for damages in tort against the authority. The following principles are to be noted in this connection:‑ I. NATURE OF WRONG. An action for damages for breach of statutory duty to take care is sometimes considered as a species of negligence. A claim for damages for bleach of a statutory duty is specific common law right, which is not to be confused with a claim for negligence. The remedy of damages is given by the common law in order to make effective, for the benefit of the injured plaintiff, his right to the performance by the defendant of the defendant's statutory duty. II. WHEN BREACH OF STATUTORY DUTY GIVES RISE TO AN ACTION FOR DAMAGES. The general rule is that when a statute creates an obligation and also prescribe a specific remedy for its non-performance, e.g., a fine or other penalty, the performance cannot be enforced in am other manner, so that no action for damages would life for its bleach. 2. Where, on the other hand, a statute creates a liability, which already existed at common law, then the remedy for damages is not excluded, despite the availability of a special remedy under the statute, unless the statue contains special words of exclusion. 3. Nor would the common law remedy be exclude where statute creates a new liability, not existing at common law but does not provide special remedy. 4. If the statutory obligation is imposed only for the benefit of the public, the only remedy for the breach is tilt statutory remedy. 5. When a statutory duty is for the benefit of particular persons or a class of persons, these persons have a right for damages. 6. The general rule of exclusion of other than statutory remedy applies in cases of nonfeasance, i.e., the failure to perform a duty. Remedy other than the statutory is available in case of an act of misfeasance or malfeasance, i.e., the violation of an express prohibition in the statute. 7. Non-statutory remedies, such as mandamus or injunction, is also not barred where the act of statutory functionary is ultra vires or without jurisdiction or in excess of jurisdiction or discretion or the policy or objects of the statute. C. LIABILITY FOR NEGLIGENCE. Where an action for damages fails or is not available, the plaintiff may still recover damages on the footing of negligence at common law, if he succeeds in proving that:‑ (a) There was a reasonable apprehension of damages; (b) The defendant had a duty to act with care but he had failed to take such care; (c) The injury suffered by the plaintiff has been caused by the breach of duty on the part of the duty. D. STATUTORY PENALTY. Where a statute creates a duty in often prescribes a sanction for breach thereof instead of leaving it to the general law of damages for negligence or the like. The statute may provide imposition of fine or forfeiture or other monetary penalty for breach of its commands. LETTER FROM MUHAMMAD NAEEM SHAH, PRESIDENT, ALL PAKISTAN TAX BAR ASSOCIATION TO THE CHAIRMAN SALES TAX APPELLATE TRIBUNAL, ISLAMABAD [9th March, 2004] To The Chairman, Sales Tax Appellate Tribunal, Islamabad. Dear Sir, A meeting of Pakistan Tax Bar was held on 6-3-2004 at Hotel Marghalla, Islamabad wherein the representatives of 36 Tax Bars of the country attended the meeting. The attention of the House was drawn towards the ineffectiveness of Sales Tax Tribunal. The House discussed various problems being faced by the members of the Bars/Taxpayers. It was resolved that the same may be communicated to the Learned Chairman Sales Tax Tribunal for consideration and necessary action. The House resolved as under: (i) That presently when the Sales Tax has become important due to a great source of revenue generation for the country, it is need of the hour to setup an effective, disciplined, efficient and an independent Sales Tax Tribunal, so as to decide the appeals judiciously. (ii) That presently the working of the Tribunal is quite unsatisfactory, this tribunal is working like a subsidiary of the CBR rather than an independent judicial forum. (iii) That the Sales Tax Tribunal has failed to discourage and to redress the problems arising due to abuse of power and deliberate misapplication of law, rather it always encouraged the illegal acts of the Sales Tax Authorities. (iv) That there are lots of problems at every stage i.e., at the time of filling, fixation and hearing of appeals and also in stay matters. These problems should have been resolved immediately. (v) That because of Mr. Sarfaraz Khan the learned Technical Member, the Lahore Tribunal has suffered a great loss and lost its-credibility in the eyes of taxpayers/tax lawyers. (vi) The Bar suggests that this Tribunal should pass strictures against the officers wherein there are glaring violations and illegalities by the Sales Tax Authorities and in suitable cases. (vii) That Sales Tax Tribunal was constituted three years before, yet it has not framed its Rules. The Bar suggests that Sales Tax Tribunal should frame its Rules on the lines of Income Tax Tribunal Rules, immediately and without any further delay. LETTER FROM MUHAMMAD NAEEM SHAH, PRESIDENT, ALL PAKISTAN TAX BAR ASSOCIATION TO THE FEDERAL FINANCE MINISTER, FEDERAL SECRETARY FINANCE AND THE CHAIRMAN, CENTRAL BOARD OF REVENUE [8th March, 2004] Dear Sir, A meeting of Pakistan Tax Bar was held on 6-3-2004 at Hotel Marghalla, Islamabad wherein the representatives of 36 Tax Bars of the country attended the meeting. The attention of the House was drawn towards the defamatory remarks passed by Mr. Vakil Ahmad Khan (Member Direct Taxes CBR) in a recent interview with GEO Television, whereby the said member alleged that 24% of the Revenue of the country is being embezzled by the Tax Lawyers community i.e. the Tax Lawyers, Chartered Accountants and Tax Practitioners. The House protested and strongly condemned the undesirable remarks of Mr. Vakil Ahmad Khan. The Bar observed that a tax lawyer has only the power to plan, to prepare and to plead a tax case whereas a tax bureaucrat has all the powers of discretion, policy making, decision making and the powers of assessment which are the means of corruption in the tax system. The Bar resolved that country has suffered a great loss because of the actions and policies of said Mr. Vakil Ahmad Khan. On account of the policies of the said member the number of Income Tax Return fillers reduced from eleven lacs to ten lacs. The Bar further resolved that incorrect datas and informations are being provided by the said member to the nation through the media. In the year 2000, which was the first year of the Govt. through the Tax Survey a panic was created throughout the country due to which the graph of country's economy gone down to the level of 70%. Millions of rupees spent on the said Tax Survey to gather the. informations and datas which informations nave not been utilized even after the lapse of tour years. The Bar decided that it shall soon call a country-wide strike with the coordination of District, High Court and Supreme Court Bars to protest against the uncalled for and highly objectionable remarks of the said member CBR and demanded the immediate removal of Mr. Vakil Ahmad Khan from the C.B.R. LETTER FROM MUHAMMAD NAEEM SHAH, PRESIDENT, ALL PAKISTAN TAX BAR ASSOCIATION TO THE FEDERAL FINANCE MINISTER, FEDERAL SECRETARY FINANCE AND THE CHAIRMAN CENTRAL BOARD OF REVENUE [8th March, 2004] Dear Sir, A meeting of Pakistan Tax Bar Association was held on 6-3-2004 at Marghalla Hotel, Islamabad wherein the representatives of 36 Tax Bars of the country attended the meeting. The House discussed the various problems relating to Sales Tax. It was resolved to communicate the same to the Govt.; CBR for their consideration and necessary action. The House resolved as under: (i) That presently the Sales Tax Department is working as a most problematic Department of the country, creating maximum difficulties for the taxpayers in the garb of tax collection. Most of the actions are taken on the basis of surmises and conjectures, illegally and illogically and for their motives. Attitude of junior as well as senior officers is highly objectionable and in this race Sales Tax Collectorate Lahore is on the top. (ii) That sales Tax Registration has been made a most complicated, painful and costly job. A long list of irrelevant documents has been required to be filed alongwith the Registration application besides the number of visits of registration staff to the business premises of the taxpayer and the personal appearance of taxpayer before the Registration Authorities. It was suggested that the job of Sales Tax Registration be assigned to taxpayers facilitation centers on the lines of NTN Certificate and only the copy of I.D Card be required alongwith registration application. (iii) That Sales Tax Auditors are creating maximum harassment because of their mala fides, misuse of power and deliberate misapplication of law. It was therefore proposed that necessary steps be taken to eliminate the malpractice of the Auditors. (iv) That section 73 of the Sales Tax Act, 1990 being ultra vires of the Constitution, its old and new provisions be withdrawn immediately with retrospective effect. (v) That C.B.R. Authorities be requested once again that a sitting space be provided to the members of the Bar at every Sales Tax Collectorate. (vi) That Tax Advisory Committees be formed at each Collectorate on the lines of Income Tax and their frequent meetings be called to redress the problems at the local level.