such other evidence as the Income﷓tax Officer ﷓nay require, on specific points, shall, by an order in writing, assess the tota (PLP)

This judgment will dispose of seven writ petitions, namely, W.P. Nos. 235 of 1985 and 236 of 1986 filed by Mian Muhammad Yousaf, hereinafter referred to as petitioners Nos.1 and 2, W‑P.No.702 of 1985 filed by 7‑Up Bottlers Company Limited, hereinafter referred to as petitioner No.3, W.P.No.773 of 1985 filed by Ch. Textile Mills Limited, hereinafter referred to as petitioner No.4. W.P.No.859 of 1985 filed by Crescent Textile Mills Limited,‑ hereinafter referred to as petitioner No.5, W.P.No. 860 of 1985 filed by Crescent Board Limited, hereinafter referred to as petitioner No.6, and W.P.No.1141 of 1985 filed by Rahmat Poultry Farm, hereinafter referred to as petitioner No.7, challenging the notices issued to them for the second time under section 65 of the Income‑tax Ordinance, 1979, by their respective Income‑tax Officers for the assessment years shown in the subsequent paragraph.

2. The brief facts of the case are that the petitioner No. 1 filed his income‑tax return under section 55 of the Income‑tax Act, 1922, for the assessment year 1978‑79, whilst petitioners Nos.2 to 7 filed their income‑tax returns under the Self‑Assessment Scheme under section 55 of the Income‑tax Ordinance, 1979, for the assessment years 1979‑80, 1980‑81, 1980‑81, 1980‑81, 1980‑81 and 1980‑81, respectively. The In‑come‑tax Officers concerned assessed petitioner No.1 under section 23(3) of the old Act on 24‑1‑1979 and petitioners Nos.2 to 7 under section 59(l) of the new Act on 29‑5‑1980, 29‑12‑1980 25‑8‑1980, 25‑8‑1980, 25‑8‑1980 and 23‑8‑1980, respectively. Notices of assessments and demands were accordingly issued to the petitioners. However, on 1‑4‑1981. 1‑4‑1981, 31‑12‑1980, 15‑1‑1981, 5‑4‑1981, 14‑12‑1980 and 10‑2‑1981, the Income‑tax Officers issued notices to petitioners Nos.1 to 7 respectively under section 65 of the Income‑tax Ordinance, 1979, to submit their returns afresh for additional assessment, on the grounds that they had been under assessed, or assessed at too low a rate, or they had been the subject of excessive relief. The petitioners accordingly submitted their revised returns.

3. In the meantime, section 65 of the Income‑tax Ordinance, 1979, was amended on 14‑6‑1982 by the Finance Ordinance, XII of 1982, which introduced a new subsection (3‑A) as follows: ??(3‑A) Where a notice under subsection (1) has been issued, no order under the said subsection shall be made after the expiration of one year from the end of financial year in which such notice was served."

4. Additional assessments were thereafter by the income‑tax Officers on 30‑6‑1983, 30‑6‑1983, 30‑6‑1983, 30‑4‑1983, 29‑6‑1983,30‑6‑1983 and 5‑6‑1983 on petitioners Nos. 1 to 7, respectively. Being aggrieved by the said orders, petitioners Nos. 1 to 5 preferred appeals against the same, whereas petitioners Nos. 6 and 7 filed writ petitions in the High Court challenging the additional assessments. The Commissioner of Income‑tax (Appeals) by his orders dated 26‑3‑1984, 26‑3‑1984, 10‑3‑1984, 10‑3‑1984 and 26‑3‑1984 passed in favour of petitioners Nos.1 to 5 respectively accepted their appeals and annulled their additional assessments, whereas the High Court by its orders dated 15‑11‑1983 and 15‑11‑1992 in favour of petitioners Nos.5 and 6 accepted their writ petitions and set outside their additional assessments. After these orders, the Income‑tax Officers concerned passed consequential orders in favour of petitioners Nos.1 to 7 under section 132 of the Income‑tax Ordinance 1979 writing off the demand their books.????????????????????????????

5. On 14‑6‑1984, Finance Ordinance, XXXVIII of 1984, was promulgated, which amended section 65 of the Income‑tax Ordinance, 1979, by substituting subsection (3‑‑A) of the said section with the following: ? (3‑A) Where a notice under subsection (1) is issued on or after the first day of July, 1982, no order under the said subsection shall be made after the expiration of one year from the end of the Financial year in which such notice was served." This subsection was given retrospective effect from 14‑6‑1982.

6. Notwithstanding the fact that no appeals were filed by ' the Income‑tax Officers concerned against the appellate orders of the Commissioner of Income‑tax (Appeals) passed in favour of petitioners Nos. 1 to 5, or against the decision of the High Court passed in writ petitions which were decided in favour of petitioners Nos. 6 and 7. the Income‑tax Officers concerned on 8‑1‑1985, 8‑1‑1985 26‑1‑1985 31‑1‑1985, 23‑2‑1985, 23‑2‑1985 and 23‑2‑1985 issued fresh notices to petitioners Nos.1 to 7 under section 65 of the Income‑tax Ordinance, 1979, calling upon petitioners Nos.1 to 7 respectively to file fresh returns in the prescribed form for additional assessments in of the same assessment years.

7. The notices issued by the Income‑tax Officer to petitioners Nos.1 and 2 on 8‑1‑1985 and 8‑1‑1985, respectively intimated that he proposed to re‑assess the petitioners in respect of escaped income. The notice issued by the Income‑tax Officer to petitioner No.3 on 26‑1‑1985 intimated that he proposed to re‑assess the petitioner in respect of escaped income and also on the ground that its income had been assessed under section 59(l). The notices issued by the Income‑tax Officers to petitioners Nos.4, 5, 6 and 7 on 31‑1‑1985, 23‑2‑1985, 23‑2‑1985 and 23‑2‑1985, respectively intimated that they proposed to re‑assess the said petitioners in respect of escaped income and also on the ground that its income had earlier been assessed under section 59(1).

8. Being aggrieved by the issue of the aforesaid notices by the Income‑tax Officers proposing to re‑assess the petitioners Nos. I to 7 for the second time ' the said petitioners filed writ petitions in the High Court, as stated in para 1 above, challenging the issue of the said notices by the said officers. Further proceedings were stayed by the High Court in respect of petitioners Nos.1 to 7 on 15‑4‑1985 15‑ 4‑ 1985, 18‑2‑1985, 2‑3‑1985, 2‑3‑1985, 2‑3‑1985 and 22‑4‑1985, respectively. In view of The expiry of the stay order, after the lapse of six months, as provided by Article 199(4‑A) of the Pakistan Constitution, 1973, the Income‑tax Officer issued notices to petitioners Nos.1 and 2 on 20‑5‑1986 and 20‑5‑1986, respectively for the completion of the additional assessments, which he finally completed within the limitation on 31‑12‑1986 and 31‑12‑1986 respectively, after issue of notices to petitioners Nos.1 and

2. No notices were issued by the Income‑tax Officers to petitioners Nos. 3 to 7 after the expiry of their stay orders and? date of conclusion of arguments in these cases, no second assessments were completed by the Income‑tax Officers concerned in respect of these petitioners. All these writ petitions are now before me for disposal.

9. On behalf of the petitioners it is submitted that the substitution of the new subsection (3‑A) to section 65 of the Income‑tax Ordinance 1979 by the new subsection (3‑A) with retrospective effect from 14‑6‑1982 cannot have the effect of disturbing the cases which were concluded and closed under the old law, as they amount to post and closed transactions. In this connection, learned counsel have cited Barnala Commission Shop v. Income‑tax Officer P L D 1963 Lah. 311 and 320, Nagina Silk Mills Lyallpur v. The Income‑tax Officer P L D 1963 S C

322. Ghulam Haider Shah v. Chief Land Commissioner, Sindh 1983 C L C 1585, Works Co‑operative Housing Society v. Karachi Development Authority P L D 1969 S C 430, Commissioner of Sales‑tax v. Kruddsons Ltd. P L D 1974 S C 180 and 184; Hotel Industries Pvt. Ltd. v. Province of West Pakistan P L D 1978 Lah. 53 and 57; Limm v. Mitchell L.R. 1912 A.C. 400; and Eyre v. Wynn‑Mackenzie 1986 1 Ch. D.

135. It is also submitted that where a decision of the superior ‑most Court changes, cases earlier decided on the basis of the old interpretation cannot be reopened to affect past and closed transactions. In this connection, the Income‑tax Officer Central‑11, Karachi. v. Cement Agencies Limited P L D 1969 S C 322 is referred. It is stated that in this case the Supreme Court referred with approval the cases of Lemm v. Mitchell (supra) and Eyre v. Wynn‑Mackenzie (supra). It is next contended, relying upon para 284 of Crawford on Statutory Construction, that whilst pending appeals may not be exempted from the operation of curative statutes, the best rule is that a final Judgment should not be effected. Or stated covertly until the judgment is final, it is subject to the power of the legislator to enact curative legislation. It is further contended, relying upon page 339 of Caries on Statute Law. 7th Edition, that Courts, endeavoring to protect vested rights have refused to allow statutes to have a retrospective operation, although their language seemed to imply that such was the intention of the legislature, because if they were so construed, vested rights would be defeated. It is next contended that the first additional assessments having all been annulled, the said decisions, which invested rights in favour of petitioners Nos.1 to 7, impliedly acted as res judicata and prevented the Income‑tax Department from making second additional assessments on the basis of the same material and facts, In this connection, the Commissioner of Income‑tax East‑ Pakistan v., Wahid‑ul‑Zaman P L D 1965 S C 171 and 177 is referred, It is next contended that the issue of the second notices under section 65(l) of the income‑tax Ordinance, 1979, by the income‑tax Officers were?? ab initio void, for the Income‑tax Officers neither had any fresh material to open up the cases nor had secured the approval of their Inspecting Assistant Commissioners of Income‑tax, as a result of which they could not reassess the petitioners under clauses (a) and? of subsection (1) of section 65 and as no second? assessment would be made under clause (c) of subsection (1) of the same section,, they could not reassess the petitioners under? that clause either.

10. On behalf of the respondents a number of submissions have been made. First, that the petitioners should first submit to the jurisdiction of their Income‑tax officers concerned get their additional assessments finalized and then file appeals before the Commissioner of Income‑tax (Appeals) under section 132 of the Income‑tax Ordinance 1979, for till such time that the same is done, it cannot be inferred whether the case of the petitioners is on the basis of the same old material and facts on which they were first reassessed. or on fresh material and facts over and above those on which they were reassessed before, and till this is established, it is not possible for the petitioners to assert that the second reassessments are hit by any principle of implied res judicata arising by virtue of the same matter having been dealt with and decided earlier. It is submitted that this High Court has always directed assessees to first submit to the jurisdiction of the income tax officers so as to get their re‑assessments done under section 65 and then come up in writ jurisdiction to challenge the same. In this connection the two cases of Crescent Art Fabrics Ltd. v. ‑commissioner of Income‑tax (W.P .Nos.1359 of 1986 and 1360 of 1986 both decided by the Lahore High Court on 14‑4‑1986) are referred. Second, it is submitted that the petitioners have a remedy of moving the Commissioner of Income‑tax in revision under section 133 of the Income‑tax Ordinance, 1979 and since the petitioners have not availed of the said remedy, they should be directed to do so. Third, it is submitted that there is no bar under section 65 of the Income‑tax ordinance in serving a second, a third, or a fourth notice on an assessee in respect of the same assessment year, provided definite information or material has come to hand showing that income has escaped assessment, or has been under assessed, or assessed at too low a rate or has, been the subject of excessive relief or refund. It is submitted that the only bar is that a detailed scrutiny under clause (c) of subsection (1) of section 65 cannot be made twice, by virtue of the bar contained in that clause. Fourth, that by virtue Of the amendment made to subsection (3‑A) of section 65 of the Income‑tax Ordinance, 1979, by the Finance Ordinance, 1984, with retrospective effect from 14‑6‑1982 additional assessments on the basis of the second notices issued to the petitioners under section 65 can be completed before the expiration of one year from the end of the financial year in which such notices are served. It is submitted that since the amendment to subsection (3‑A) took effect retrospectively from 14‑6‑1982, the second additional assessments under section 65 can be made. Enactments dealing with limitation are treated as relative to procedure and are retrospective in the sense that their provisions will apply to proceedings which have already commenced at the time of their enactment. In this connection, Noor Muhammad v. The Province of the West Pakistan (P L D 1966 B.J. 19) is referred. Fifth, that since the first additional, assessments made under section 65 in respect of petitioners, Nos.1 IG 7 were annulled by the Commissioner of Income‑tax (Appeals) or by the High Court only because of technical defects, the said orders did not bar the second additional assessments. In this connection, a decision of the Income‑tax Appellate Tribunal, Dacca Bench, delivered on 27‑12‑1969 in S.T.A. 325 of 1968‑69 (parties names not available) and Chatturam Horilram Ltd. V Commissioner of income‑tax, Bihar & Orrisa (1955, 27 1 T R 709) are referred. Sixth, that wherever fresh information or material comes to light, a fresh notice under section 65 of the Income‑tax Ordinance can always be given to an assese. In this connection Muhammad Bashir v. The Income‑tax Officer. Lahore 1982 P T D 322 has been referred. Seventh that the principles of res judicata and estoppel do not in a strict sense apply to proceedings before the Income‑tax authorities, as they are no Courts in the established sense. M/s. Farrukh Chemical Industries Ltd. v. Commissioner of Income‑tax (South Zone) Karachi, P L D 1.983 Kar. 269 and Arafat Woollen Mills v. The Income‑tax Officer, Company Circle 1986 P T D 316 are referred. In the light of these authorities it is submitted that if further material comes to light, an earlier decision even under section 65 would not bar a fresh decision on any principle of implied res judicata.

11. Since all these cases have been argued at length, whilst admitting writ petitions W.P.No.859 of 1985 and W.P‑No.860 of 1985, 1 would dispose of these cases also, with the other admitted as notice cases. 12. 1 have given my anxious consideration to the arguments of the learned counsel for the petitioners and the Income‑tax Department and have perused the record produced by the Income‑tax Department Before dealing with the arguments, it is necessary to set out certain sections of the Income‑tax Ordinance, 1979, as were in force in 1985 when the second notices were given by the Income‑tax Officers, as they are relevant for the decision of these cases.

8. All officers to follow the order of the Central Board of Revenue.?All officers and persons employed in the execution of this Ordinance, shall observe and follow the orders, instructions? and directions of the Central Board of Revenue: Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of the Appellate Assistant Commissioner in the exercise of his appellate functions or any value in the exercise of his functions under this Ordinance." 55.????? Return of total income.‑‑(l) Every person,‑‑ (a)??? whose total income or the total income of any other person, in respect of which he is assessable under this Ordinance, for any income year hereinafter referred to as the said income year exceed the maximum amount which is not chargeable to tax under this Ordinance; or ?? (b) who has been charged to tax for any of the four income years immediately preceding the said income year, shall furnish a return of his total income or the total income of such other person, as the case may be, for the said income yea r. (2)?? The return of total income under subsection (1) shall be furnished‑‑ (a) in the case of a company, on or before the first day of August next following the income or within fifteen days of the expiry of six months from the end of the income year, whichever is later; and (b) in every other case‑‑ (i)???? where the income year ends at any time between the first day of July and the thirty‑first day of December (both days inclusive), on or before the first day of August next following; and (ii)??? in other cases, on or before the first .day of October next following. (3) The Income‑tax officer may, on sufficient cause being shown, extend the date for the delivery of the return so, however, that no extension of time for a period or periods amounting in all to more than fifteen days from the dates specified in subsection (2) shall be allowed except with the approval of the Inspecting Assistant Commissioner." (59)Self ‑assessment.‑‑(l) Where the return of total income for any income year furnished by the assessee under section 55 qualifies for acceptances in accordance with provisions of a scheme of self‑assessment made by the Central Board of Revenue for that year or under any instructions or orders issued thereunder, the Income‑tax Officer shall assess, by an order in writing, the total income of the assessee on the basis of such return and determine the tax payable on the basis of such assessment. Explanation ‑‑For the removal of doubt it is declared that a return of total income furnished under section, 55 does not include a return of total income furnished under section 57. (1A) Notwithstanding anything contained in subsection (1) the Central Board of Revenue or any authority subordinate to it, if so authorised by the Central Board of Revenue in this behalf, may, in accordance with a scheme referred to in subsection (1), select out of returns referred to in that subsection any cases or classes of cases or persons or classes of persons, howsoever, determined, for assessment under section 62, and the Income‑tax Officer shall proceed to make the assessment under that section or, if the circumstances so warrant, under section 63, accordingly. (3) In assessing the total income and determining the tax payable under subsection (1), the Income‑tax Officer may make such adjustments as may be necessary, including any adjustment under section 34,' 35 36, 37, 38, 50, 53 or 54, the rules made under section 165, the First Schedule and the Third Schedule. (4) ?No order under subsection (1) shall be made in any case after the thirtieth day of June of the financial year next following the income year in respect of which a return of total income has been furnished under section 55. 62.?? Assessment on production of "Accounts, evidence, etc.‑‑ (1)??? The Income‑tax Officer. after considering the evidence on record (including evidence, if any produced under section 61) and such other evidence as the Income‑tax Officer ‑nay require, on specific points, shall, by an order in writing, assess the total income of the assessee and determine the tax payable by him on the basis of such assessment. (2)?? Where a person is authorised by the Central Board of Revenue under section 7 to assist the income‑tax Officer in making an ?? assessment and the Income‑tax Officer disagrees with the opinion of such person on any point concerning assessment, the Income‑tax Officer shall record. in the order under subsection (1). the opinion of such person and the reasons for the disagreement with such opinion. 64.? Limitation for assessment:‑‑(, 1) No assessment under section 63 shall be made after the expiration of two years from the end of the assessment year in which the total income Tax was first assessable, (2) 'Not Withstanding anything contained in subsection (1), where a return of total income has beet, filed after the end of the financial year in which the last date of filing, of such return specified in section 55 falls, no assessment under section 59‑A, section 62 or section 63 shall be made ‑after the expiration of two years from the end of the financial year in which the said return is, filed. (3)??? Notwithstanding anything contained in subsection (1), where, for any income year, an assessee has failed to furnish the return of total? assessment under section 62 or section 63 shall be made after the expiration of two years from the end of the financial year in which notice under section 56, subsection (3) of section 72 or subsection (3) of section 81, as the case may be, was served. 11 6 5.???? Additional assessment. ‑‑(I) If, in any year, for any reason,‑‑ (a)??? any income chargeable to tax under this Ordinance has escaped? assessment; or (b)??? the total income of an assessee has been under assessed, or assessed at too low a rate, or has been the subject of excessive relief or refund under this Ordinance; or the total income of an assessee or the tax payable by him has been assessed or determined under subsection (1) of section 59 and no order of assessment has subsequently been made under this section or any other provision of this Ordinance, ? (c)?? the Income‑tax Officer may,' at any time, subject to the provisions of subsections (2), (3) and (4). issue a notice to the assessee containing all or any of the requirements of a notice under section 56 and may proceed to assess or determine by an order in writing the total income of the assessee or the tax payable by him. as the case, may be, and all the provision of this Ordinance shall, so far as may be apply accordingly, Provided that the tax shall be charged at, the rate or rates applicable to the assessment year for which the assessment is made. (2) No proceedings under subsection (1) shall be initiated, unless definite information has come into the possession of the Income‑tax Officer or he has obtained the previous approval of the Inspecting Assistant Commissioner of Income‑tax in writing to do so. (2) (3)??????? Notice under subsection (1), in respect of any income year, may be issued within ten years from the end of the assessment year in which the total income of the said income year was first assessable. (3‑A)??? Where a notice under subsection (1) is issued on or after the first day of July, 1982, no order under the said subsection shall be made after the expiration of one year from the end of the financial year in which such notice was served. (4)??????? Nothing contained in subsection (2) shall apply to any such case or class of cases to which clause (c) of subsection (1) applies as may be specified by the Central Board of Revenue.

160. Computation of limitation period ????? .‑‑In computing the period of limitation, there shall be excluded,‑‑ (a)????? in the case of an appeal or an application under this Ordinance, the day on which the order? complained of was, served and, if the assessee was not furnished with a copy of the order, when the notice of the order was served upon him, the time requisite for obtaining a copy of such order; and (b)??????? in the case of any assessment or other proceedings under this Ordinance, the period, if any, for which such proceedings were stayed by any Court, tribunal or any other authority."

12. It is clear from the above provisions that there are two types of assessments at the original stage, namely, the self‑assessment under section 59 under the Self‑Assessment Scheme and the normal assessment under section (j2, In each financial year the Central Board of Revenue by general circular publishes the salient features of the Self‑Assessment Scheme relative to that year, in which cases not qualifying under the Self‑Assessment Scheme are also mentioned. by a‑ separate circular or circulars, the Central Board of Revenue also prescribes the cases or classes of cases which the Central Board of Revenue can select for detailed scrutiny. Thus, those cases which, qualify for being proceed under the Self‑Assessment Scheme are assessed as self‑assessment cases, without scrutiny of books and records, under section 59 of the Ordinance, and those cases which do not qualify for processing under the Self‑Assessment Scheme are assessed as normal assessment cases, on the basis of scrutiny of books and records, under section 62 of the Ordinance.

14. Where a case assessed under the Self‑Assessment Scheme under to y? section 59 has to be opened for direct scrutiny, that is ‑ say, to be assessed like a normal assessment, on the basis of scrutiny of accounts and records, as is normally done under section 62 of the Ordinance, it is initiated on the basis of a notice issued under section A 65(l)(c), in which the Income‑tax Officer need not indicate that any income has escaped assessment, or has been under assessed, or assessed at too low a rate, or has been the subject of excessive relief or refund, or that he has secured any definite information in that respect, or has obtained the prior approval of the Inspecting Assistant Commissioner of Income‑tax in writing. Where, however, a normal assessment made under section 62 of the Ordinance has to be reopened, it is initiated on the basis of a notice issued under section 65(l)(a) or (b), where the Income‑tax Officer has to indicate that some income has escaped assessment, or has been under assessed, or assessed at too low a rate, or has been the subject of excessive relief or refund under the Ordinance, or he has obtained the prior approval of the Inspecting Assistant Commissioner of Income‑tax in writing. ??

15. Where a direct scrutiny assessment made after issue of notice, under section 65(l)(c) is again to be reopened for any matter relating to the same assessment year, it cannot be done by a notice under section 65(l)(c), but can only be done by a notice under section 65(l)(a) or (b). Likewise, where an additional assessment made after issue of notice under section 65(l)(a) or (b) is again to be reopened for any matter relating to the same assessment year, it can only be done by a notice under section 65(l) (a) or (b). In this view of the matter, the notices regarding the second additional assessments issued to petitioners Nos.1 to 7 ex facie appear to be in order, as in each of these notices the Income‑tax Officers have indicated that they propose to open the assessments either on the basis that income has escaped assessment or been under assessed.

16. Prior to the Finance Ordinance, 1982, subsection (3) of section 65 of the Income‑tax Ordinance, 1979, provided that no order under subsection (1) could be made in respect of any income year after the expiry of ten years from the end of the assessment year in which the total income was first assessable. It appeared that a case could be reopened without any limitation of time, but once it was reopened the Income‑tax Officer had to complete the reassessment within ten years from the end of the assessment year in which the total income was first assessable. However, when put to practical. application it appeared that since no order could be made after the expiry of ten years from the end of assessment year in which the total income was first assessable, a notice, to be effective, had to be given before the expiry of ten years' from the end of the said assessment year. If the Income‑tax Officer gave a notice four years before the expiry of the tenth year, he had four years to complete the reassessment. If he gave a notice one month before the expiry of the tenth year, he had only one month to do so. To enable the Income‑tax Officer to have a given period of time to complete the assessment and to provide a given period of time within which cases could be reopened, subsection (3) was amended and a new subsection (3‑A) was added by the Finance Ordinance, 1982. By the amendment of subsection (3), notice under subsection (1), in respect of any income year, could only be issued within ten years from the end of assessment year in which the total income of the said income year was first assessable. By virtue of subsection (3A), where a notice under subsection (1) had been issued, no order under the said subsection could be made after the expiration of one year from the end of the financial year in which' such notice was served. Thus, no case could be reopened beyond the limitation period of ten years and where a case was so re‑opened within this period of time, the re‑assessment had to be completed with in a year from the end of the financial year in which such notice was issued. By the Finance Ordinance, 1979, subsection (3‑A) of section 65 was substituted by another subsection, as reproduced in para 5 above. The substitution was made effective from 14‑6‑1992. Under the said new subsection (3‑A), where a notice under subsection (1) was issued on or after 1‑7‑1982, no order under subsection (1) could be made after the expiration of one year from the end of the financial year in which such notice was served. This substitution was necessitated to enable the Income‑tax Officers to reopen assessments which had become barred by limitation, where Income‑tax Officers had not completed the assessments within a year and their orders had been annulled.' See Crescent Board Ltd. v. Income‑tax Officer. Writ Petition No.3627 of 1983 decided by this Court on 3‑3‑1984. Subsection (3‑A) has retrospective effect and enables an Income‑tax Officer to issue a fresh notice again under section 65(l)(a) or (b) and complete a reassessment in respect of an income year in respect of which notice under subsection (1) has been issued on or after 1‑7‑1982, but whether it will affect vested rights or past and closed cases is a matter which calls for examination in each particular case.

17. The main question that arises in these cases is whether under the amended subsection (3‑A) of section 65 of the Income‑tax Ordinance, 1979, the second additional assessments can be made in respect of past and closed cases of the petitioners. It is not disputed that subsection (3‑A) of section 65 has been given retrospective effect, but what is submitted is that even if it is so. it would not have the effect of affecting past and closed transactions. Since a large number of cases have been cited in this connection, they deserve to be discussed. In Limm v. Mitchell (L.R. 1912 A.C. 400). the respondent Mitchell in 1907 brought an action in Hong Kong against the appellant Limm for criminal conversion. That action was dismissed u,)on the ground that by the effect of certain Ordinances, such actions had been abolished in Hong, Kong. In 1908, a new Ordinance was promulgated restoring jurisdiction of the Hong Kong Courts in such actions, for the Ordinance had a retrospective effect to the extent of enabling actions to be brought in respect of criminal conversion during the period when the right of action had ceased to exist in the colony. After promulgation of the Ordinance, the respondent commenced a fresh action against the appellant in respect of the same acts of misconduct as he had alleged in his former action. The appellant judicata, but the Hong Kong Court overruled the plea pleaded res upon the ground that there had been no judgment on the merits of the case. In appeal before the Privy Council it was urged that the new Ordinances of 1908 did not have the effect of depriving the appellant of the judgment which had earlier been? .given in his favour. The Privy Council held, reversing the decision of the Supreme Court of Hong Kong, that the substance of the question earlier tried was whether or not the law of the Colony gave the plaintiff a remedy on the facts alleged. It was decided that it did not and the defendant thereupon became entitled on those allegations to a judgment dismissing the whole claim. This result was not "due to any defect in the jurisdiction of the Supreme Court, which was ample, but to a short?coming in the general law In these circumstances, the Privy Council held that in the absence of any appeal, the judgment was a final determination of the rights of the parties and the ordinary principle that a man was not to be vexed twice for the same alleged cause of action applied, unless it was excluded by the legislature in explicit and unmistakable terms. Since it was not so excluded by la‑s, the Privy Council accepted the appeal. In Eyre v. Wynn‑Mackenzie 1986, 1 Ch. D. 135 a learned Judge had earlier decided that a solicitor mortgagee could not, in the absence of a special contract, charge profit costs against a mortgagor for work done in connection with the mortgage premises and that if such costs were not properly chargeable otherwise, the solicitor mortgage??? claim them under a covenant in the mortgage not deed to pay all sums? .which might become owing by the .mortgage mortgagor to the plaintiff. Later, the law as to a solicitor mortgage's costs was altered by the passing of the Mortgagees Legal Costs Act, 1895. This law was retrospective in it operation and the Court had power to decide differently from what it had before the passing of the Act, within the time limited for appealing. The plaintiff sought leave to appeal against the earlier order, notwithstanding that the time limited for appealing had expired. The application was disallowed, for although section 3 of the Act was held to be retrospective in its operation, it .,;as held that it could not have intended to affect judgments which had been pronounced previously to the passing of the Act and where time limited for appealing therefrom had expired. It was observed that to allow such an application would be to make it possible for innumerable appeals to be brought in cases which had been adjudicated upon and the decisions in which were correct, but for a subsequent statutory. alteration of the law. ???????????? In Barnala Commission Shop v. Income‑tax Officer P L D 1963 Lah. 311, the income was first assessable in the year which ended on 31‑3‑1957 and assessment was made under section 34 of the Income‑tax Act, 1922. on 4‑5‑1961. It was contended that under section 34(12) the re‑assessment could not have been made after expiry of four years from the end of the year in which the income in question was first assessable. By the Finance Ordinance of 1963, a new definition to the word 'year' was added. The learned Judge? held that the case was covered by the new definition and the reassessment was within time. In dealing with the question of limitation, the learned Judge at page 323 observed that a statute of limitation was a law of procedure and applied to all proceeding, from the moment of. Its enforcement, irrespective of the dates on which those proceedings were instituted, subject. of course, to express provisions to the contrary, and to the non‑revival of extinguished rights. It may be mentioned here that the interpretation of the High Court regarding the amendment made by the Finance Ordinance, 1960, was overruled in Nagina Silk Mills' case P L D 1963 S C

322. In Nagina Silk Mills v. The Income‑tax Officer 1963 8 C 322, the assessment for the year 1955‑56 was made on 29‑6‑1960,, the assessment was challenged under section 34(2) of the Income‑tax Act, 1922, on the ground that it had been made beyond four years from the end of the year in which the income, profits or gains were first assessable. Finance Ordinance, 1950, which was enacted on 30‑9‑1960, added a new clause after clause (16) of section 2 of the Act, to define the word 'year,. This clause was given retrospective effect from 1‑4‑1959. The Supreme Court accepted the writ petition and set aside the assessment as having been made beyond the period of limitation. In Ghulam Haider Shah v. Chief Land Commissioner. Sindh 1983 C L C 1585, certain lands were gifted by land‑owners who were the subject of M.L.R.

115. The gifts were accepted by the Land Commissioner, Sindh, as not void under para 7 of the said Regulation. On 2‑9‑1972, the Governor of Sindh amended the Law Reforms Regulations by Ordinance IV of 1972 which had retrospective effect a 11‑3‑1979‑ in its application to the Province of Sindh, by substituting the proviso appearing under para. 7 (i)(b) of the Regulation. In view of this amendment, the Land Commissioner, Sindh. in exercise of his suo motu powers of review, declared the gifts made by the land‑owners in favour of their relatives as void. These orders were confirmed in revision by the Chief Land Commissioner. These, orders were challenged in writ jurisdiction. A Division Bench 'of the Sindh High Court held that the mere fact that the Amendment Ordinance XIV of 1972 made amendment effective from 11‑3‑1972. was that sufficient? reason the cases duly decided and closed‑ according to the la‑,,j that existed. The Division Bench held that it was a , ell‑settled rule of interpretation. that a statute was not to be construed to have a greater retrospective operation that! its language made it necessary, After examining the provisions of the Amendment Ordinance. the Division, Bench held that it was not sufficient to make the amendments applicable to the cases which were already concluded and closed under the old law, In Works Co‑operative Housing Society v Karachi Development Authority P L D 1969 S C 430, the Supreme Court in an earlier case between the same parties had ordered the Karachi Development Authority to honour the commitment of the Government expressed in the notification of the Provincial Government dated 9‑6‑1964. in respect of commitments made to the appellant society and not to depart from. the direction given in that notification. so long as it stood intact. Later, the Provincial Government issued two new notifications dated 19‑10‑1968 and 15‑10‑1968 whereby the obligation of the Karachi Development Authority to allot land to the appellant society was deleted. The Supreme Court held that a notification could not be deemed to operate retroactively and that there was no manner of doubt that a judgment of a Court declaring a right, could not be nullified by an executive action. In Commissioner of Sales‑Tax (West), Karachi, v. M/s. Kruddsons Limited P L D 1974 S C 180. the respondent company, which by mistake had collected sales tax in the years 1953‑54. 1954‑55 and 1955‑56 and had paid the same to the department, filed claims for their refund. The respondent company finally succeeded in securing an order for their refund on a reference to the High Court under section 17(l) of the Sales Tax Act. This decision was assailed before the Supreme Court, on the basis of an amendment made in the Sales Tax Act subsequent to the answering of the reference by the High Court, as a result of which it was submitted that the respondent company's claim for the refund was wholly nullified. The appellant relied upon, the amended section 33‑A of the Sales‑Tax Act which had been amended by the Finance Act, 1968, and was given retroactive operation. The Supreme Court accepted the appeal on the ground that the pendency of the certificated appeal before it had destroyed the finality of the High Court judgment and, therefore, was hit by the amended section 33‑A of the Sales Tax Act. In arriving at this finding, the Supreme Court relied upon para 284 of page 580 of Crawford on Statutory Construction, 1940 Edition, where it was held that a curative Act could apply where the case has been appealed. In Hotel Industries Private Limited v. The Province of West Pakistan P L D 1978 Lah. 53, the District Excise and Taxation Officer assessed the hotel run by the appellant in Lahore to tax in respect of the lodging units held by it in which telephone connections were? installed. The tax was levied on the basis of section 12 which was introduced by the Provincial Government in the. Finance Act of 1965, The appellant filed an appeal before the Director, Excise and Taxation, who, vide his order dated 18‑11‑1966, found that as the telephone charges were entirely separate and could not be covered by the provision as contained in section 12(l)(b) of the Finance Act, 196J, the demand raised against the petitioner was unlawful. Later section. 12 of the West Pakistan Finance Act, 1965, was. retroactively amended by the addition of an Explanation which was deemed always to have been so added. After the said amendment, the Excise and Taxation Officer, vide his letter dated 3‑6‑1970, required the petitioner to deposit Rs.42,450 as arrears of rent for the year 1965‑66 and the further directed the appellant to produce its accounts in respect of the lodging units in its hotel during the years 1966‑67, 1967‑68., 1968‑69 and 1969‑

70. With regard to the assessment year 1965‑66, the High Court held that the order of the Director date 18‑11‑1966 for the demand year 1965‑66 attained finality and became a transaction past and closed. The subsequent amendment thus would not affect it, unless there was an expire provision to annul the effect of that order. Since the retrospective law did not go to that extent to annul past and closed transactions, the tax for the year 1965‑66 could not be recovered.

18. Where the decision of the superior most Court changes, cases earlier decided on the basis of the old interpretation of law cannot be reopened to affect past and closed transactions .in? this connection(I the Income‑tax Officer Central‑11, Karachi v. Cement Agencies Limited P L D 1969 S C 322 may be referred. In this case, the Supreme Court referred with approval cases of Limm v. Michell (supra) and Eyrie v. Mackenzie (supra).

19. The effect of curative statutes on pending litigation has been .concisely summed up by Crawford in his book on the Construction of Statutes, 1940 Edition, at para 284 as follows:‑ 284???? Judicial proceedings. ‑‑While pending litigation may be exempted from the separation of curative statutes, in many instances it is not. But, in either case, however, a number of problems arise. Moreover. there is also considerable confusion in the decisions pertaining to their solutions. For instance, where pending litigation is not exempt, some Courts have held that the curative act will apply even after the case has been appealed, and others that it will not apply to any case wherein judgment has been rendered in the lower Court. Perhaps the best rule is that a final judgment cannot be affected. Or stated conversely, until the judgment is final, it is subject to the power of the legislature to enact curative legislation."

20. Craies on Statute Law, 7th Edition, at page 399 states : "So careful are the Courts in endeavoring to protect vested rights that we find that in several cases Judges have refused to allow statutes to have a retrospective operation, although their language seemed to imply that such was the intention of the legislature, because, if the statutes had been so construed, vested rights would have been defeated."

21. I would now deal with the cases cited on behalf of the respondents. I will first take up the decision of the Income‑tax Appellate Tribunal. Dacca Bench, delivered on 27‑12‑1969 in S.T.A. 325 of 1968‑69 (parties' names not available). In this case an assessment was made by the Sales‑Tax Officer, which was assailed before the Appellate Assistant Commissioner on the ground that the assessing Officer had not been posted with proper jurisdiction and that proper notice had also not been served on the assessee. The Appellate Assistant Commissioner annulled the assessment of 16‑10‑1963, which order was maintained by the Income‑tax Appellate Tribunal. Later, the case was re‑opened under section 28 of the Sales Tax Act by the Sales Tax Officer after jurisdiction had properly been vested in him. A fresh appeal was taken before the Appellate Assistant Commissioner on the ground. that an assessment which had been annulled could not be re‑opened under section 28, which was repelled. The assessee thereupon appealed before the Income‑tax Appellate Tribunal with regard to the contention that the assessments had been made out of time, the Tribunal observed that in view of the amended law which? was in force, the assessment was not out of time. Nothing is said clearly in the judgment about what the amended law was. However, the tribunal‑ did hold that the learned Advocate for the appellant could not refer to any authority that the re‑assessment could not be made after an earlier assessment had been annulled for procedural deficiency or want of jurisdiction. it proceeded on the basis that the original assessment was out of jurisdiction because there was neither any appropriate notice nor had the Sales‑Tax Officer been vested with jurisdiction over the assessee. This case is therefore, distinguishable, as basically the Income‑tax Officer had no jurisdiction to make the assessment and his order was void. In Chatturam Iforilram Ltd. v. Commissioner of Income‑Tax, Bihar and Orissa (1955, 27, I.T.R. 709). the assessee company carried on business in Chhota Nagpur. It was assessed to tax for the year 1939‑40, but the assessment was set aside by the Income‑tax Appellate Tribunal on 28‑3‑1942 on the ground that the Indian Finance Act. 1939, was not in force during the assessment year 1939‑40 in Chhota Nagpur. which was a partially excluded area. This decision was upheld by the High Court on reference on 30‑9‑1943. On 30‑6‑1942, the Bihar Regulation IV of 1942 was promulgated, by which the Indian Finance Act of 1939 was brought into force in Chhota Nagrpur retrospectively as from 30‑3‑1939. The Income‑Tax Officer passed an order on 8‑2‑1944 holding that the income of the assessee for the year 1939‑40 had escaped assessment and issued to him a notice on 12‑2‑1944 under section 34 to submit his return. The Supreme Court of India held that under the scheme of the Indian Income‑tax Act, 1922, income of an assessee attracted liability to tax with reference to‑the standing provisions of the Act, but the payability and the quantification of the tax depended on the passing and application of the Annual Finance Act and that when the Bihar Regulation was enacted. the Income‑tax Officer should be imitated with the knowledge of having discovered that chargeable income had escaped assessment for the year 1939‑40 and that where earlier assessment proceedings had in fact been taken, but' failed to result in a valid assessment owing to some lacuna, other than that attributable to the assessing authorities, notwithstanding the chargeability of the income to tax. it was a case of chargeable income escaping assessment. This is also a case where the initial action of the Income‑tax Officer was void as he was not vested with any jurisdiction to make an assessment. This case is also distinguishable. ???????????? In Noor Muhammad v. Province of Pakistan, the appellant instituted a suit against the Provincial Government for a declaration that?? no‑amount was due and payable by him in respect of sale of Seeds and manure in terms of the agreement entered into with the agricultural department. The? provincial Government took up the objection that the suit was barred under sections 78 and 158 of the Land Revenue Act. The objection was upheld by the learned Senior Civil Judge, Bahawalpur, who dismissed the suit on 28‑9‑1964. The appeal preferred by the plaintiff was also dismissed on 8‑8‑1965. The appellant then preferred a second appeal, which was admitted by. The High Court. In the meantime the Provincial Government took steps under the West Pakistan Government Dues Recovery Ordinance, 1962, to recover the amount due from the appellant, as arrears of land revenue. The High Court held that the appellant's suit was barred as he had failed to deposit arrears of land revenue under protest, before filing the suit, as provided by section 78 of the Land Revenue Act. As regards the plea that when the appellant had entered into an agreement there was no provision for the recovery of the dues as arrears of land revenue and the West Pakistan Government Dues Recovery Ordinance, 1962, could not have retrospective effect, it was held that since the Act dealt with procedure for Government to enforce its rights, but otherwise did not effect the rights of the parties, it had retrospective effect. Here also the? appellant had not acquired any vested right through any judgment of a Court in his favour. This case is also distinguishable.

22. Taking into consideration all the above cases which have been cited and the extracts quoted from the books dealing with the effects of retrospective statutes affecting past and closed transactions, it is clear that the amended subsection (3‑A) of section 65 of the Income‑tax Ordinance, 1979, does not have the effect of disturbing the rights vesting in the petitioners as a result of decisions in their favour made by the Commissioner of Income‑tax (Appeals) ‑or by the High Court annulling the first additional assessments made against them. It must not be forgotten that in the instant cases the Income‑tax Officers had jurisdiction to make the first additional assessments under section 65 of the Ordinance. They were obligated to do so before the expiration of a year from the end of the financial year in which notices had been served by them on the petitioners. if they themselves permitted the period of limitation to lapse, they cannot take advantage of their own negligence by re‑issuing notices once again on the facts. Had the earlier additional assessments been annulled on the basis that the Income‑tax Officers had no jurisdiction, it could have been said that the additional assessments did not legally exist as? they were void. Had the first additional assessments been set aside due to a cause not attributable to the assessing authority, following the rule stated in Chatturam Horilram's case (suora), one could have looked into the matter. Had appeals been taken against the earlier annulment orders and proceedings been kept alive, subsection (3‑A) of section 65 would have been applicable. See Kruddsons' case (supra). But where the assessing authority lost its right, due to the limitation provided in subsection (3‑A) of section 65, to complete the assessments and vested rights having arisen in favour of the petitioners of being free from the liability of being so reassessed and the failure being, attributable to the assessing authorities themselves, the respondents cannot reopen the assessments again on the same facts. 23. 1 have held above that vested rights having, arisen in favour of the petitioners. by virtue of the first additional assessments having been annulled, the same cannot be reopened by virtue of fresh notices issued again under section 65 of the Income‑tax Ordinance, 1979. 1 must make it clear that the vested rights cover only matters that were opened up by the Income‑tax Officers should making the first re‑assessments, as are contained in those orders, which would include all the items which they assessed whether on the basis that they had escaped assessment, or been under assessed, or assessed at too low a rate, or had been the subject of excessive relief or refund under the Ordinance. The vested rights only cover what was reassessed. They do not cover income which ‑nay have escaped assessment, or been under assessed, or assessed at too? low a rate, or has been the subject of excessive relief or refund, over and above what was first reassessed.

24. This, therefore, brings me to the question as to what was the stand of the respondents with regard to the cases of the petitioners in respect of material with them when they issued notices for the second additional assessments. With regard to the cases of Mian Muhammad Yousaf, petitioners Nos.1 and 2, notices were issued by the Income‑tax officers on 8‑1‑1985 and 8‑1‑1985, respectively on the basis of escaped assessment. In paras 11‑B of their two writ petitions, the petitioners pleaded that the notices had not been issued on any fresh material. In the para wise comments. the Income‑tax Officers did not claim that they were proceeding on any fresh material. They only stated that the second notices were valid because the first additional assessments had been annulled only for a technical reason, because of the law as it then stood and since subsection (3‑A) had been amended retrospectively, the cases could be reassessed for the second time. The learned Single Judge, whilst referring in his orders to the fact that the reports of the Income‑tax Officers were silent on the point whether fresh proceedings were being taken on the same information on the basis of which the earlier notices had been given, observed that the Income‑tax Officers were proceeding on the basis of the old information. On these premises, both the cases were admitted to hearing. Before me the learned counsel for the respondents did not assert that the Income‑tax Officers concerned had fresh material with them. over and above that ‑which they had already utilized against the petitioners? in their first additional assessments. It is also admitted that the Income‑tax Officers concerned did not secure any prior permission of the Inspecting Assistant Commissioners of Income‑tax, before issuing the second notices. Since the said notices were issued on the is of the same material which the Income‑tax Officers had used when making the first additional assessments, therefore, these notices can only be treated as not have. been issued on fresh material. Further in respect of these two petitioners the Income‑tax Officers completed the second additional assessments on 20‑5‑1986 and 20‑5‑1986, respectively. The perusal of the same shows that both the reassessments were completed on the basis of compromise, in which the petitioners agreed to withdraw their objections to the second notices issued under section 65 and to also withdraw the present V,./o writ petitions. Mian Muhammad Yousaf, petitioner. has neither appeared himself nor any counsel has appeared on his behalf in respect of his two writ petitions. In view of the compromise effected by this assessee with the Income‑tax Officer in respect of his two reassessments, his two writ petitions. deserve to be dismissed. With regard to the case of 7‑Up Bottlers Co. Ltd. , petitioner No.3, the notice issued by the Income‑tax Officer on 26‑1‑1985 was issued on the basis that income had escaped assessment and that the, petitioner had been previously assessed under section 59(l) of the ordinance. In para 9(vi) of the writ petition, the petitioner pleaded that the second notice was served mala fide. The respondents did not file any para use comments or written statement to the writ petition. Before me the learned counsel for the respondents did not assert that the Income‑tax Officer concerned had fresh material with him. over and above that which he had earlier and had utilized against U the petitioner in his first additional assessment. It is also admitted that the Income‑tax Officer concerned did not secure any prior permission of the Inspecting Assistant Commissioner of Income‑tax before issuing the second notice. Since the said notice was issued on the basis of the same material which the Income‑tax Officer had and had used when making? the first additional assessment, therefore, this notice can only be treated as not having been issued on fresh material. This notice can be struck down on this short ground. In respect of Ch. Textile Mills Ltd. , petitioner No.4. the, notice issued by the Income‑tax Officer on 31‑1‑1985 was issue? doing the basis that income had been under assessed and that the petitioner had been earlier assessed under section 59(l) of the Ordinance. The respondents did not file any para‑wise comments or written statement to the writ petition. Before me learned counsel for the respondents did not assert that the Income‑tax Officer had fresh material with him over and above that which he had earlier and had utilized against the petitioner in his first additional assessment. In this case the Income‑tax Officer did secure prior permission of the Inspecting Assistant Commissioner of Income‑tax on 12‑1‑1985, before issuing notice. Legally, this notice is valid, but since the Income‑tax Officer had no fresh material and he could not disturb a past and close transaction, the notice is liable to be struck down on this account'. In respect of Crescent Textile Mills Ltd., Crescent Boards Ltd., and Rehmat Poultry Farms, petitioners Nos.5 to 7, notices issued by the Income‑tax Officers on 23‑2‑1985, 23‑2‑1985 and 23‑2‑1985 respectively were issued on the basis that income had been under assessed and that the petitioners had been previously assessed under section 59(l) of the Ordinance. The respondents did not file any para‑wise comments or written statements to the writ petitions. Learned counsel for the respondents did not assert that the Income‑tax Officers concerned had fresh material with them, over and above that which they had earlier and had utilized against the petitioners in their first additional assessments. It is also admitted that the Income‑tax Officers concerned did not secure any prior permission of the Inspecting Assistant Commissioners of the Income‑tax before issuing the notices. Since the said notices were issued on the basis of the same material which the Income‑tax: Officers had and had used when making their first additional assessments, therefore, these notices can only be treated as not having been issued on fresh material. These notices can be struck down or. this short ground alone.

25. For the foregoing reasons, writ petitions W.P.No.235 of 1985 and W.P.No.236 of 198,6 filed by Mian Muhammad Yousaf, petitioner, are dismissed, as the, parties have compromised the matter amongst themselves. Writ Petitions W.P.No.702 d~ 1985 filed by 7‑Up Bottlers Company Ltd., W.P.14o.773 of 1985 filed by Ch. Textile Mills Ltd., W.P.No.859 of 1985 filed by Crescent Textile Mills Ltd., W.P.No.860 cf 1985 filed by Crescent Board Ltd. and II.P.No.1141 of 1985 filed by Rehmat Poultry Farm are accepted and the notices issued to them on 26‑1‑1985, 31‑1‑1985, 23‑2‑1985, 23‑2‑1985 and 23‑2‑1985, respectively by the Income‑tax Officers concerned under section 65 of the Income‑tax Ordinance, 1979, are declared to have been issued without lawful authority and as having no legal effect and are set aside. These five petitions are accepted with costs. Counsel's fee‑in each case is fixed at Rupees Two Thousand (Rs.2,000) which shall be payable to the petitioners. M.B.A./C‑19/L??????????????????????????? Order accordingly.