Delegation of power

2024 SCMR 1656 SUPREME-COURT Judicial Precedent

Art. 50Majilis-e-Shoora (Parliament)Powers and limitationsDelegation of powersPrinciple

Majilis-e-Shoora (Parliament) is a creation of the Constitution, therefore, it cannot exceed boundaries expressly set out therein

Power to exercise legislative authority expressly provided under the Constitution cannot be abdicated by the Legislature by way of delegation

Essential legislative functions cannot be delegated beyond reasonable limits because doing so would be in violation of the Constitution

Legislature being the creation of the Constitution, does not inherently possess absolute legislative power but the same can only be exercised in conformity with the powers granted by the Constitution

Legislature determines legislative policies and sets out principles and standards for guidance of delegated authority

Fundamental legislative responsibility cannot be delegated

Delegation must adhere to certain constraints

General principles set out for exercising power of legislation are met by Majlis-e-Shoora (Parliament) and once that has been done, delegation of authority is confined to making subordinate legislation or to attend to other matters of administration and details

Primary functions expressly stated in the Constitution have to be fulfilled by the Legislature itself while the latter may delegate ancillary and incidental functions to an outside agency or authority.

2023 SCMR 1166 SUPREME-COURT Judicial Precedent

Maxim "delegatus non potest delegare"Scope and meaningDelegation of power

It is a general principle of public law that where the legislature vests powers in a person, indicating that trust is being placed in his individual judgment and discretion, that person is prima facie required to exercise that power personally, however, the said principle is not absolute and yields to the language, scope and object of the statute conferring the said powers

Legislation may expressly provide for a statutory procedure to delegate such powers vested in an administrative authority, after the exercise of which, the delegate can then exercise the delegated power in their own right.

2023 PTD 1600 SUPREME-COURT Judicial Precedent

Maxim "delegatus non potest delegare"Scope and meaningDelegation of power

It is a general principle of public law that where the legislature vests powers in a person, indicating that trust is being placed in his individual judgment and discretion, that person is prima facie required to exercise that power personally, however, the said principle is not absolute and yields to the language, scope and object of the statute conferring the said powers

Legislation may expressly provide for a statutory procedure to delegate such powers vested in an administrative authority, after the exercise of which, the delegate can then exercise the delegated power in their own right.

2023 CLC 398 KARACHI-HIGH-COURT-SINDH Judicial Precedent

Ss. 13, 29, 30 & 30-A [as amended by Pakistan Electronic Media Regulatory Authority (Amendment) Act (II of 2007)]AppealDelegation of powerProofImposing of fine

Appellant company was engaged in television broadcasting and Pakistan Electronic Media Regulatory Authority suspended its broadcast for thirty days with imposing of fine of Rupees One Million for airing content leveling personal allegations against higher judiciary

Plea raised by appellant was that the punishment was imposed without hearing the appellant and without having any authority delegated to Chairman Pakistan Electronic Media Regulatory Authority

Validity

Decision of suspension of broadcast passed by Chairman Pakistan Electronic Media Regulatory Authority under S.30(1) of Pakistan Electronic Media Regulatory Authority Ordinance, 2002, in exercise of delegation of authority vested in him under S.13 of Pakistan Electronic Media Regulatory Authority Ordinance, 2002

High Court set aside the order passed by the Authority suspending broadcast in the wake of absence of rules as necessitated in such behalf

Authority was at liberty to take up the issue again by itself in accordance with S.30 of Pakistan Electronic Media Regulatory Authority Ordinance, 2002, or by the Chairman subject to the condition that rules were framed by competent authority under S. 13 of Pakistan Electronic Media Regulatory Authority Ordinance, 2002 and de novo proceedings could be adopted by the Chairman in accordance with law and rules so framed

High Court set aside decision of imposing fine under S.29 of Pakistan Electronic Media Regulatory Authority Ordinance, 2002, as no evidence had come on record regarding lawful delegation of such powers to the Chairman Pakistan Electronic Media Regulatory Authority by the Authority under S.13 of Pakistan Electronic Media Regulatory Authority Ordinance, 2002

Authority was at liberty to take up the issue again by itself in accordance with S.29(6) of Pakistan Electronic Media Regulatory Authority Ordinance, 2002 or by the Chairman subject to rules

Appeal was disposed of accordingly.

2023 CLC 398 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S.13 [as amended by Pakistan Electronic Media Regulatory Authority (Amendment) Act (II of 2007)]Delegation of powerWord 'suspend'ScopeLegislature omitted word 'suspend' making its intent lucid that such power could be delegated, leaving no ambiguity

Such delegation cannot be termed as quasi-judicial or non-delegable.

2019 SCMR 846 SUPREME-COURT Judicial Precedent

Principal and agentContractual and statutory delegation of powerDistinction

Principle of "principal and agent" arising out of contractual delegation could not apply to the delegated authority of the delegator and the delegate, which derived its source from an enactment, being statutory delegation.

2019 PTD 228 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Ss. 11, 25, 33 & 34Assessment of taxSelf-assessed taxSelection of taxpayerShow-cause notice, non-issuance ofDelegation of powersPrinciple

Taxpayer was aggrieved of post remand proceedings where no fresh show-cause notice was issued under S.11(2) of Sales Tax Act, 1990 for recovery of additional tax liabilities without selection of case or without audit by Commissioner Inland Revenue

Validity

Appellate Tribunal Inland Revenue had remanded cases for fresh considerations after affording reasonable opportunity of being heard to the registered persons

Resultantly, original orders as well as show-cause notices were cancelled and set aside by Tribunal

Assessing Officer in order to initiate fresh consideration for tax periods under S.11 of Sales Tax Act, 1990, was to issue fresh show-cause notices and after affording reasonable opportunity of being heard, had to finalize proceedings after fulfilling conditions laid down under provisions of S.11 of Sales Tax Act, 1990

Assessing officer, in the present case, after remand of cases did not initiate proceedings under S.11 of Sales Tax Act, 1990 and instead of issuing fresh show-cause notices, issued hearing notice

Such order passed by assessing officer under Ss.33 & 34 of Sales Tax Act, 1990 without assessment of principal amount of tax and based on earlier show-cause notice were not maintainable, without jurisdiction which were set aside

No provision of delegation of powers like S.210 of Income Tax Ordinance, 2001 existed with the Commissioner Inland Revenue

Delegatee could not further delegate his powers and only Commissioner was competent and empowered to undertake assessment proceedings under S.11 of Sales Tax Act, 1990 and not any other officer

Show-cause notice issued under S.11 of Sales Tax Act, 1990 by Additional Commissioner Inland Revenue was of no legal effect as he was not empowered to issue notice and could not pass order in question, as, such powers exclusively vested with the Commissioner

Order-in-Original passed by Additional Commissioner Inland Revenue was without jurisdiction or in excess of jurisdiction and without any legal effect

Penalty and default without mala fide intention was not maintainable in the eyes of law

Such penalty and default and surcharge imposed were deleted

Appeal was allowed accordingly.

2016 PTD 596 ISLAMABAD Judicial Precedent

Delegation of powerScope

Legislative power cannot be delegated as the same would tantamount to violation of letter of Constitution.

2016 PTD 596 ISLAMABAD Judicial Precedent

Ss. 122 & 210(1)Constitution of Pakistan, Art. 199Constitutional petitionMaintainabilityAggrieved personScopeNotice, issuance ofDelegation of powerAlternate remedy, availing of

Petitioner companies were aggrieved of notices issued by an official who was not authorized under the law, without delegation of power

Validity

Separate order was not required in respect of delegation of power, for the purposes of S. 122(6) of Income Tax Ordinance, 2001

Was sufficient, if Commissioner had delegated his powers and functions to an officer not lower in rank than an Additional Commissioner for the purposes of S. 122 of Income Tax Ordinance, 2001

Delegation of powers vested in Commissioner under S. 122 of Income Tax Ordinance, 2001, would essentially include and cover powers under all of its subsections i.e. from (1) to (9) of S. 122 of Income Tax Ordinance, 2001

Adequate remedy was provided under law therefore, petition under Art. 199 of the Constitution was not competent

Once petitioner made resort to alternate remedy available under law, then Constitutional petition was liable to be dismissed

Notices in question were issued by officers vested with power and jurisdiction under Income Tax Ordinance, 2001, therefore, did not suffer from any legal infirmity or jurisdictional error

Notices were not adverse orders so as to bring petitioners within the fold of 'aggrieved persons'

High Court declined to interfere in the notices issued by authorities

Petition was dismissed in circumstances.

2014 PTD 478 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss.3 & 10

Notifications S.R.O. 1168(X)/68, dated 10-7-1968, issued by Federal Government and SO(T) M&MD8-21/2011, dated 30-4-2013, issued by Punjab Government

Constitution of Pakistan, Arts. 143 & 199

Constitutional petition

Delegation of power

"Cess" and "tax"

Distinction

Petitioner assailed Notification SO(T) M&MD 8-21/2011, dated 30-4-2013, issued by Punjab Government, whereby an amendment was made in Schedule available in Excise Duty on Minerals (Labour Welfare) Act, 1967

Plea raised by petitioner was that central excise duty in the form of cess or tax rested within the exclusive domain of Federal Government

Validity

Cess was a tax confined to local area for specific object or particular purpose

Imposition of cess was co-related to the object for which it was to be used

Tax was compulsory exaction of money by public authority for public purposes enforceable by law

Tax realized, formed part of general revenue of the State, whereas cess imposed for specific object and purpose was not part of general revenue

Cess must be utilized for attainment of the purpose and object of imposition

Object of levy in question was welfare of labour employed in mining industry and the declared object fell within the purview of larger pubic interest

Petitioner failed to establish that notification in question did not advance public interest i.e. welfare of labour employed in mining industry or caused any harm to petitioner's fundamental right of freedom of trade or business

Both the notifications were neither ulra Constitutional nor illegal

Petition was dismissed in circumstances.

2014 PLD 334 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S. 18(a) & (g)Delegation of powerAbsence of ChairmanEffect

Accused contended that due to non-availability of Chairman National Accountability Bureau, reference filed by his delegatee was illegal

Validity

Once Chairman National Accountability Bureau delegated specified authority in terms of S.18(a) or 18(g) of National Accountability Ordinance, 1999, upon his subordinate officers, then change of person holding position of Chairman National Accountability Bureau or the officer upon whom such authority was delegated (if by designation) did not matter

Authority so conferred under S.18(a) or 18(g) of National Accountability Ordinance, 1999, by Chairman National Accountability Bureau upon his subordinate would continue till such delegation was expressly revoked

As such delegated authority was exercised by delegatee/subordinate officer in the name of and on behalf of Chairman National Accountability Bureau, therefore, delegatee/subordinate officer could only exercise such authority during the period when Chairman National Accountability Bureau was in office though he might be absent or unable to perform function of his office due to any reason whatsoever

Once office of Chairman National Accountability Bureau fell vacant then delegation would remain in abeyance till new Chairman was appointed to the office in whose name such delegated authority was to be exercised unless expressly revoked

Such was because of the fact that delegatee exercised the power in the name of delegator and once the office of delegator fell vacant there was none in whose name the delegatee could exercise such powers

Defect in reference stood cured upon resumption of office by Chairman National Accountability Bureau

Accused did not challenge authority of the office filing reference before Accountability Court nor till date challenged the order whereby cognizance was taken

High Court declined to quash reference

Petition was dismissed accordingly.

2014 PTD 1303 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Ss.122(5A) & 120Amendment of assessmentDelegation of power

Taxpayer contended that Assistant Commissioner Inland Revenue being junior and subordinate to the Commissioner could not amend the assessment order taken to have been made by the Commissioner; and it was only the Commissioner who could pass an amended order under S.122(5A) of the Income Tax Ordinance, 2001 as the provisions of S.122(5A) of the Income Tax Ordinance, 2001 envisaged application of mental faculty and independent mind by the Commissioner which could not be delegated; and there was also no finding in effect that the deemed assessment order was erroneous and prejudicial to the interest of revenue; and issue raised could not be considered as prejudicial to the interest of revenue

Validity

Additional Commissioner of Inland Revenue under delegated authority was empowered to amend the deemed assessment order by invoking the provisions of subsections (1), (5) and (5A) of S.122 of the Income Tax Ordinance, 2001

Section 210 of the Income Tax Ordinance, 2001 visualized the delegation of any or all powers vested in and exercisable by Commissioner under the Income Tax Ordinance, 2001 except the power to delegate further

First Appellate Authority had exhaustively discussed the issue in proper manner

Order to the corresponding extent was maintained by the Appellate Tribunal and finding of First Appellate Authority was not interfered with.

2014 PTD 1101 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Ss. 122(5A)/122(9) & 210(1A)Amendment of assessmentDelegation of powerPre-conditions

Taxpayer contended that under the Income Tax Ordinance, 2001 besides the order being erroneous and prejudicial, before delegation under S.210(1A) of the Income Tax Ordinance, 2001, the Commissioner could delegate the authority only "if he considers" that the assessment order was erroneous in so far it was prejudicial to the interest of revenue; that in subsection (5A) of S.122 of the Income Tax Ordinance, 2001 special words "if he considers" had been used by the legislature, which meant that prior to delegation, the Commissioner had to examine the income tax return and apply his mind, but in neither of the amended orders passed under S.122(5A) of the Income Tax Ordinance, 2001 there was no such finding, nor any reason for assuming the deemed order being erroneous and prejudicial to the interest of revenue had been recorded, except for the opinion of Additional Commissioner mentioned in notice subsequently issued under Ss.122(9)/122(5A) of the Income Tax Ordinance, 2001; and that further proceedings initiated and amended order subsequently passed were neither sustainable in law, nor on facts as these proceedings were entirely based on fishing inquires, but neither of the conditions which were both to be fulfilled simultaneously had been complied with

Validity

Jurisdiction could be exercised only if order passed or the deemed order was erroneous and as well as prejudicial to the interest of revenue and not otherwise

After amendment of deemed orders, the end result was net loss

As there was no income assessable to tax or income which was liable to tax, there was no loss of revenue in that case

Contentions of taxpayer were not only copious but were also well founded

Contention of revenue that " addition made in the amended order reduced the net loss which may result in future tax liability" was not acceptable for the reason that prior to amendment the deemed orders were neither erroneous, nor prejudice to interest of revenue, nor such aspect had been proved at any stage

Even after passing of deemed orders, the treatment accorded had not resulted in tax liability

None of the orders passed under S.122(5A) of the Income Tax Ordinance, 2001 were either erroneous nor prejudicial to the interest of revenue

Deemed order may be erroneous from Departmental point of view which was also not correct as said contention had neither been proved, nor was accepted and even from discussion on merits, the deemed orders were neither erroneous, nor were prejudicial to the interest of revenue

Legal objections were not only valid but were also well founded

Orders passed under S.122(5A) of the Income Tax Ordinance, 2001 were cancelled by the Appellate Tribunal on legal objections as well.

2014 PTD 1018 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

Ss. 122 (5A), 120(1), 210 & 2(13)Amendment of assessmentJurisdictionDelegation of powerOriginal assessment was amended being erroneous and prejudicial to the interest of revenue

First Appellate Authority annulled the amended assessment passed under S.122(5A) of the Income Tax Ordinance, 2001 on legal point that assumption of jurisdiction by the Additional Commissioner was illegal

Revenue contended that at the time of passing the order, the Taxation Officer was holding jurisdiction through delegation of power under S.210 of the Income Tax Ordinance, 2001 by the Commissioner; and Taxation Officer was empowered to exercise jurisdiction under S.2(13) of the Income Tax Ordinance, 2001

Validity

Objection that the Commissioner could not delegate his authority to his subordinate was not correct for the reason that S. 211 of the Income Tax Ordinance, 2001 provided that the powers exercised by the Addl. Commissioner shall be deemed to be exercised by the Commissioner

When the Commissioner delegated powers to amend the assessment to the Addl. Commissioner; said powers would include the functions of the Commissioner i.e. scrutiny of the assessment, proper application of mind and then amending the Assessment Order

Order of First Appellate Authority annulling the amended assessment order passed under S.122 (5A) of the Income Tax Ordinance, 2001 on the legal point of jurisdiction, was not sustainable in law

Order was set aside and case was remanded to First Appellate Authority with the direction to decide the appeals of the taxpayer on other grounds taken as per memo of appeal by way of passing a speaking order.

2013 PTD 521 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN Judicial Precedent

S.122 (5A)Amendment of assessmentDelegation of powerJurisdiction

Commissioner having delegated his power under S.122(5A) of the Income Tax Ordinance, 2001 to Additional Commissioner, he was competent to issue notice to the taxpayer.