1998 PLP (Trib (PTD)

Date of hearing: 12th February, 1998. This judgment shall dispose of W.P. No.28003/97, 1077/98 and 1882/98 in which common question is involved.

2. This petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 calls in question the validity of circular (Circular No. 13 of 1997) dated 29-9-1997 issued by the Central Board of Revenue purporting to interpret sections 50 and 53 of the Income Tax Ordinance, 1979.

3. It is not necessary to state the facts in view of the limited nature of the controversy before this Court. Suffice it to say that according to the petitioner's learned counsel under section 53 of the Income Tax Ordinance, 1979 the liability of the assessee to pay advance tax has to be worked out after giving due allowance for the tax already paid under section 50 of the Income Tax Ordinance, 1979 as mentioned in sub-clause (b) of subsection (1) of section 53 itself but the Central Board of Revenue while interpreting the above section in the impugned circular has opined in para. 2 of the circular that the tax withheld under section 50 shall neither be included in the amount of tax assessed nor shall such tax be accounted for as payment of quarterly advance tax instalments. According to the learned counsel the direction of Central Board of Revenue that the tax withheld under section 50 be not accounted for as payment of quarterly advance tax instalment is violative of section 53 itself and cannot be given effect to. 'Relying upon pronouncement of the Supreme Court of Pakistan in Messrs Central Insurance Co. v. The C.B.R. and others 1993 SCMR 1232, learned counsel for the petitioner has contended that authority of the Central Board of Revenue to issue Circular No. 13 of 1997 is barred as under section 8 of Income Tax Ordinance, 1979. The jurisdiction of Central Board of Revenue for issuing instructions is confined only to administrative matters.

4. It is not necessary to advert to first contention of the learned counsel for the petitioner though it may be stated that prima facie this contention appears to have merit inasmuch as according to the wording of section 53-b the liability of the assessee is to pay the defence tax minus the tax already paid under section

50. Further discussion in this behalf is unnecessary as Mr. M. Ilyas Khan, Advocate has conceded before this Court that Circular No. 13 of 1997 dated 29-9-1997 issued by the Central Board of Revenue has no binding force. He further says that neither any assessing officer nor any Appellate Authority under the Income Tax Ordinance has, therefore, adopted the said circular. Learned counsel has assured that the authorities concerned shall interpret section 53 of the Income Tax Ordinance, 1979 irrespective of the view taken by the Central Board of Revenue.

5. It is a matter of some regret that the Central Board of Revenue while issuing the circulars does not follow the law declared by the Supreme Court of Pakistan which under Article 189 is binding on all authorities which are required to act in aid of Supreme Court of Pakistan. The law on the subject was clearly enunciated in Central Insurance Co.'s case (supra) relied upon by the petitioner's learned counsel in which it was held that Central Board of Revenue is not one of the authorities in the hierarchy of officers which has jurisdiction to interpret any provision of the Ordinance. That being so, the Central Board of Revenue would be well advised to desist from issuing any such circular which influences the decision of the adjudicating authorities. In view of the above, this. petition is allowed and it is declared that the impugned Circular No. 13 of 1997 has no legal effect and that the adjudicating appellate authorities under the Income Tax Ordinance, 1979 shall decide the matters pending before them irrespective of the circular after applying their minds to the law applicable and the facts of the each case. No order as to costs. M.B.A./U-13/L??????????????????????????????????????????????????????????????????????????????????? Petition allowed.