1982 PLP 274 (PTD)

FAKHRUDDIN G. EBRAHIM, J.‑The facts giving rise to this petition are that on 25‑5‑1958, the petitioners were called upon to file their Returns under Business Profit Tax Act, 1947, for the accounting years ending 31‑12‑1956 and 31‑12‑1957. The returns were filed, the petitioners were assessed to Business Profit Tax as dealers in Singer Sewing Machines, and the tax was paid. In their income‑tax returns for the assessment years 1957‑58 to 1960‑61, the petitioners did not claim benefit under section 15‑B of the Income‑tax Act and they were assessed in the normal course. These assessments were challenged in a revision under section 33‑A(2) of the Income‑tax Act before the Commissioner, Income‑tax on the ground, inter alia, that the petitioners were entitled to the benefit to section 15‑B of the Income‑tax Act. Simultaneously the petitioners also filed revision under section 17(2) of the Business Profit Tax Act challenging the assessment to business profit tax for the two years ending 31‑12‑1956 and 31‑12‑1957. The Commissioner of Income‑tax disposed of two revisions by two separate orders dated 30‑5‑1963. In so far as the revision under section 33‑A(2) is concerned, the petitioners claim for the benefit of section 15‑B was denied on the ground that in their returns no such benefit was claimed and the Income‑tax Officer had not passed any order refusing to grant such relief and, therefore, the relief of section 15‑B, sought in the revision, was outside its scope. In the revision under section 17(2) of the Business Profit Tax Act, the Commissioner of Income‑tax, though he does not say so, appears to have been influenced, by the fact that he had disallowed the benefit under sec tion 15‑B, held that it was not open to him to revise the assessment of the petitioner to Business Profit Tax for the two years in question. The Order made in revision under section 33‑A(2) was challenged in this Court in Constitutional Petition No. 826 of 1963. The two grounds urged on behalf of the petitioners appear in paragraph 4 of the Judgment which reads as follows:‑ "

4. Mr. Fazlur Rehman's request to this Court, in accordance with the prayer clause of the petition is: Firstly, that the view of the Income‑tax Commissioner as to the scope of the revision is legally untenable; and Secondly, that there being no other adequate remedy open to the petitioner, this Court should declare that the order of the Commissioner is illegal and direct him to grant the relief and also declare that the receipt of Rs.7,22,996'00 by the Department as Income‑tax was illegal." The petition was dismissed on the short ground that the revsional order was legal and proper and secondly, that it was not open to the High Court to go into the ascertainment of facts which may entitle the petitioner to the benefit of section 15‑B. In appeal the Supreme Court set aside the judgment of the High Court holding that the in not exercising the revisional proper case had been made out for the grant of section 15‑B benefit the assessee had a right to have the matter adjudicated in revision by the Commissioner. Accordingly, the order made in revision under section 33‑A(2) was set aside and the matter was remanded back to the Commissioner for fresh disposal of the revision.

2. Following the above judgment of the Supreme Court, the petitioners on 16th October, 1968, addressed a letter to the Commissioner of Income‑tax seeking to re‑open not only the order made in revision under section 33‑A(2) but also the order made under section 17(2) of the Business Profit Tax Act. The order made under section 33‑(A)(2) was revised by the Commissioner, vide his order dated 5‑4‑1969 on a finding that the petitioners were entitled to the benefit of section 15‑B. In so far as the petitioners request for the review of order made under section 17(2) of the Business Profit Tax Act was concerned the view that ultimately prevailed with the Commissioner of Income‑tax was that the order earlier made by him on 30‑5‑19633 in revision was never the subject‑matter of challenge either in the High Court or the Supreme Court and that order being otherwise final could not be re‑opened by him. '

3. The petitioners' contention that they were no longer liable to Business Profit Tax in the presence of the finding that it was entitled to section 15‑B benefit remained undermined.

4. We have heard the learned counsel for the parties and the one thing appears. to be quite clear is that there would be no occasion for the assessee to pay Business Profit Tax if in the relevant years, as in the present case, the assessee enjoyed the benefit of section 15‑B of the Income‑tax Act. This follows from the first proviso to section 4 of the Business Profit Tax Act, 1947. It must, therefore, follow that there would be on merits no justification' for the continued existence of the order made in revision under section 17(2) of the Business Profit Tax Act by the Commissioner of Income‑tax on 30‑5‑1963 for since then the petitioners have been given benefit of 15‑B for the two years ending 31‑12-1956 and 31‑12‑1957.

5. Mr. Iqbal Kazi, the learned counsel for the Department was, how ever, at pains to point out that that order was never challenged either in the High Court or Supreme Court and is not under challenge even in the present petition. The learned counsel, further argued that the Commissioner of Income‑tax was legally right in refusing to re‑open his order under section 17(2), dated 30‑5‑1963 for he had in law no jurisdiction to do so.

6. Coming to the earlier proceedings it is not strictly speaking correct; to say that the assessment to Business Profit Tax was not complained of inasmuch as the prayer was that receipt of Rs. 7,22,966'00, which included the sum of Rs. 4,01,148 00 paid as Business Profit Tax by the Income‑tax Department be declared illegal. No doubt, the Supreme Court had confined, itself to setting aside the order made under section 33‑A(2) of Income‑tax Act but since the order under section 17(2) of the Business Profit Tax Act was promised on the former and the former was set aside, it must follow that consequential order under section 17(2) was also to be re‑opened by the Com missioner.

7. In the alternative the order dated 30‑5‑1963 under section 17(2) is under challenge in the present petition as is clear from its prayers (c) and (d) of the petition which read as follows:‑ "(c) declaring that the petitioner is entitled to set off a sum of Rs, 4,01,148 in respect of B. P. T. relief, under section 27‑A of Sales tax act from the substituting sales tax demand on the petitioner. (d) directing the respondents to grant relief to the petitioner under proviso (3) of section 4 of the B. P. T. Act for the chargeable account ing period ending 31st December, 1956 and 31st December, 1957, amounting to Rs. 4,01,148'00." Even if we were wrong in reading the aforesaid prayer as containing challenge, to order under section 17(2), it is open to us, to allow the petitioners' oral' request to have the said order declared without lawful authority, to which the only objection could be that the Department ought not to be taken by surprise. We were, therefore, prepared to grant time to Mr. Iqbal Kazi, so that no prejudice is caused to the Department but Mr. Kazi candidly conceded that grant of time will not alter the situation to the benefit of the Department. The learned counsel, however, argued that by this process the Court will enable the petitioners to challenge an order made in the year 1963 after a lapse of along period of 17 years. To this the answer is two‑fold. Firstly, that no prejudice is being caused to the Department by setting aside what only a consequential order and secondly, that delay in the circumstance mentioned above, should not result in denial of justice to the petitioner by denying the claim for refund of a. sum, which they were not liable to pay. The rule that delay may result in dismissal of a Constitutional petition under Article 199 is after all a rule of procedure.

8. The result, therefore, is that this petition is. allowed but in the circumstances there will be no order as to costs. The petitioners will be refunded Rs. 4,01,148'00 and no more. Petition accented.