2002 PLP 557 (PTD)

‑‑‑‑Ss. 135 & 136‑‑‑Reference to High Court‑‑‑Drawing up a statement of the case by Appellate Tribunal‑‑‑Necessity‑‑‑Reference not containing facts out of which questions can be said to have arisen, cannot be entertained‑‑‑Tribunal when agrees that a question of law has arisen out of its order under S.135 bf the Ordinance, then it must draw up a statement of the case‑‑‑Such statement of the case wherefrom the legal issue emerged becomes an important part of the reference, on the basis of which High Court proceeds to consider legal issue‑‑‑High Court can consult the order of Tribunal being a part of reference, but such order cannot be read as a part of the statement of the case, which has to be drawn up by the Tribunal itself‑‑‑Tribunal while framing questions of law re‑affirms that the questions being referred or framed for reference arose out of certain set of facts which were found by the Tribunal. Muhammad Ilyas Khan for Appellant. Nemo for Respondent. Date of hearing: 10th November, 2001. NASEEM SIKANDAR, J.‑‑‑On hearing the learned counsel, we are of the view that this reference cannot be entertained. According to section 136(1) of the Income Tax Ordinance, 1979 (foil short the Ordinance), the Tribunal when agrees that a question of law has arisen out of its order under section 135 "it shall draw up a statement of they case" and will refer it to this Curt. That statement of the case becomes the basis on which this Court proceeds to consider the legal issue. The narration' of facts wherefrom the legal issue emerged is an important part of the reference inasmuch as this Court only proceeds on the facts as these are found by the Tribunal. In the phraseology employed while framing questions of law, particularly the opening part, the Tribunal re affirms‑ that the questions being referred or framed for reference arose out of certain set of facts which were found by the Tribunal.

2. In the case in hand the Tribunal has not made any mention of the facts out of which the aforesaid questions can be said to have arisen. This Court can very well‑consult the order of the Tribunal which is normally a part of the reference. However, that order cannot be read as a part of the statement of the case which has to be drawn by the Tribunal itself. It is so for the reason that while drawing up a statement, the Tribunal confirms that facts as found by them had given or had not given rise to the proposed questions of law. If they come to the conclusion that from the facts, found by them there arose a question of law then they will re‑affirm the same by way of the statement of the case. It will be noted that this Court under section 136, exercises advisory jurisdiction only. The nature of that jurisdiction is markedly different from revisional appellate or original jurisdiction of tree Court. In exercise of the three jurisdictions the judgment or order of the lower Court/forum is the primary document which centers the proceeds. However, in case of reference it is not so because at the time of making the order the Tribunal is not aware if an application for a reference will at all be made at a later stage. Even if that be so, since a. reference does lie to this Court of a question of law which arises as a natural consequence of an order of the Tribunal, it is not possible for them to contemplate and rule upon those issues which may arise as a result of their order. That exercise can be done, only after an order has been made and the Revenue or the assessee comes up with a proposition of law. In that case the Tribunal has to see and affirm, by making or refusing to make a reference that the facts as unfolded before them or considered by them did nor could not possibly result in the alleged consequence leading to the proposed legal controversy.

3. Lastly, the advice by his Court under section 136 is contemplated neither to the assessee nor to the Revenue but to Tribunal which, when made; "shall pass such orders as are necessary to dispose of the case conformably to such judgment." In our view the often repeated notion that the Tribunal is the final forum of facts is not a complete statement of the law. The Tribunal is the final forum of facts as well as law though the later part of its jurisdiction is subject to the authoritative advice of this Court when it is so sought in the form of a reference under subsection (1) of section 136 or given by this Court on a question admitted under subsection (2) thereof. If neither the assessee nor the Revenue approaches the Tribunal for a reference or in case of failure in his application under subsection (1) keeps silent, the proposition of fact as well as law between the Revenue and that assessee for that assessment year stands determined in the light of the Tribunal's judgment. That decision will remain binding inter se the parties and will be a past and closed transaction even if subsequently the Tribunal itself, this Court on a reference or even the Supreme Court comes to a conclusion different from the one reached by the Tribunal.

4. It is certainly for the Tribunal to seek advice from this Court in the best possible manner it deems fit. However, in the light of the above discussion it is necessary for it to explain in all necessary details not only the legal proposition but also the facts which gave rise to that proposition. It needs to realize that a legal proposition does not arise in a vacuum. There has to be some facts, real or assumed in which a legal proposition can possibly operate. Not only it arises in a particular situation but also results in a particular consequence which is essentially factual.

5. Since the Revenue as petitioner cannot be blamed for any lapse for a defective or incomplete reference this application R.A. No.371/LB of 1995 (assessment year 1987‑88) decided by the Tribunal on 28‑7‑1996 shall be deemed pending before them and will be disposed of in the light of the aforesaid observations.

6. Reference disposed of. S.A.K./C-139/L Order accordingly.