Dowell Schlumberger (Western) VS FOP & others

HCID/C-121

ORDER SHEET

ISLAMABAD HIGH COURT

ISLAMABAD

W.P No. 3830 OF 2014

Dowell Schlumberger (Western).S.A Versus Federation of Pakistan, etc

S.No. of orderl Date of Order with signature of Judge, and that of parties or Proceedinq hearinq coun where

28-05-2018 Mr. Babar Bilal, Advocate for the applicant. Mr. Saad M. Hashmi, Advocate for the respondent.

C.M.No.1551 of 2018

The judgment, dated 01-03-2016, passed in W.P.No.3830 of 2014 shows that the learned counsel for the Department had not given consent. However, this Court had rendered the said judgment on the basis of the statutory provisions and the precedent law.

2.The application is misconceived nor maintainable. However, it is disposed of in the light of the above observation.

(AT ALLAH)

JUDGE

Asif Mughal/*

HCJDIC-IZI

JUDGMENT SHEET

ISLAMABAD GH COURT

ISLAMABAD

W.P. No.3830/2014

DOWELL SCHLUMBERGER (WESTERN) S.A.

VERSUS

F'EDERATION OF PAKISTAN, ETC.

Petitioner by M/s. Makhdoom Ali Khan & Saad M. Hashmi. Advocates Respondents by Mr. Babar Bilal. Advocate Date of Hearing 0t-03-2016

ATHAR MINALLAH J: The petitioner has invoked the jurisdiction of this Court under Article 199 of the Constitution of the Islamic Republic of Pakistan, 1973 (hereinafter referred to as the "Constitution'). The prayer sought in the instant petition is as follows:- ult is, therefore, prayed in the interest of iustice that this Honourable Court may be pleased to:

L Prohibit the Respondents, iointly and severally, from taking any adverse actions ot any measures whotsoeverfor the recovety and/or collection ofany amount on the basis of the Impugned Order, CIRA Orcler and the First, Second and Third Impugned Recovery Notices or otlrcrwise including but not timiled to the attachment of the bank accounts of the Petitioner or removing and/or collecting any funrls therefrom.

W.P. No.3830/2014

il. Direct the Respondents to decide the Petitioner's appeal and not to creute anyfurther tax

demand against the Petitioner until such time as

this appeal is tinaUy decided and in case of any

adverse order against the Petitioner, until the

decision of this Honorable Court in any reference

Jiled before it.

ill. Grant such other relief as may be deemed

necessary in the circumstances of the case.

U. Grant cosls."

2.The facts, in brief, are that the appeal of the petitioner is pending before the learned Appellate Tribunal Inland Revenue Islamabad Bench, Islamabad (hereinafter referred to as the "Tribunal'). The leamed Tribunal had granted an injunctive order for 30 days or till the decision of the main appeal whichever is earlier. The said stay order was extended for a further 15 days on26-02-2014 since the appeal had not been decided. It was then extended for 30 days each time on 13-03-2014,15-04-2014,16-05-2014 and l7-06-2014. The learned Tribunal had, therefore, granted stay in respect of recovery of the tax for a total of 165 days. The appeal of the petitioner was heard on 28-05-2014 and the judgment was reserved. The respondent issued recovery notice dated 24-07-2014, followed by a third recovery notice. The petitioner again approached the learned Tribunal and the latter granted an injunctive order for 15 days on 05-08-2014. In the light of Section 34 of the Federal Excise Act, 2005 (hereinafter referred to as the "Act of 2005'), Section 46(2) of the Sales Tax Act, 1990 (hereinafter referred to as the "Act of 1990') read with Section 2(3) of the Act of 2005 and Section l3l (5) of the Income Tax Ordinance, 2001 (hereinafter referred to as the "Ordinance of

W.P. No.3830/2014

2001') the leamed Tribunal cannot grant a stay for a period of more than 180 days in aggregate. The petitioner had, therefore, invoked the jurisdiction of this Court under Article 199 of the Constitution.

3.At the very outset, the learned counsel appearing on behalf of the petitioner has contended that the leamed Tribunal is yet to be constituted pursuant to judgment rendered by this Court dated 24-02-2016 in W.P.No.34l4 of 20ll titled "Pakistan Oil Field Limited vs. Federation of Pakistan and others". The learned counsel has further argued that the period of limitation for the purposes of a stay granted by the learned Appellate Tribunal is directory in nature. In the instant case the judgment was reserved by the learned Tribunal on 28-05-2014 and has not been announced as yet. It has, therefore, been urged that the petitioner is not at fault and, therefore, cannot be made to suffer in the circumstances. The learned counsel has, therefore, suggested that the instant petition could be disposed of with the direction that the recovery be stayed till a decision has been rendered by the learned Tribunal.

4.When confronted with the above, the leamed counsel for the department has also not opposed the suggestion made by the learned counsel for the petitioner. Moreover, from a plain reading of Section l3l(5) of the Ordinance of 2001 it obviously appears that the time specified for the validity of an order passed in relation to the stay ofrecovery ofthe tax is directory in nature. It would give rise to an anomaly if the provision is interpreted in a manner that on the one hand the leamed Tribunal has been empowered to grant the stay after forming an opinion to the effect that the recovery shall cause

W.P. No.3830/2014

hardship and on the other hand for the legislature to have intended that the taxpayer is exposed to the rigours of hardship merely because the appeal was not decided within a specified period and that too without any fault on part of the appellant. It is settled principle of interpretation of a statutory provision that absurdity cannot be attributed to the legislature. It has been consistently held by the august Supreme Court that the determination, whether a provision is mandatory or directory, largely depends upon the "intention and language in which the provision is couched." It is, however, settled law that "where the consequence of failure to comply with the provision is not mentioned the provision is directory and where the consequence is expressly mentioned the provision is mandatory." Reliance is placed on "Malik Umar Aslam vs. Mrs.

Sumaira Malik and others", 2-9!&MM, "Maulana Nur-ul-Haq vs. Ibrahim Khalil", 2000 SCMR 1305 "Ghulam Hassan vs. Jamshaid Ali and others" 2U SCMR 1001, ooHuman Rights Cases Nos.4668 of 2006, I I 11 of 2007 and 15283-G of 2010", PLD 2010 SC 759. In the instant case, the provision is couched in such language which renders the provision as directory and not mandatory. As already noted above, the legislature could not have intended to cause undue hardship to a taxpayer. A reasonable interpretation ofSection l3l

(5)obviously would be that the time specified therein is directory and, therefore, if the appeal is not decided within the said period, the stay would continue till the disposal or decision ofthe appeal unless expressly recalled by the learned Tribunal. Any other interpretation would defeat the legislative intent of protecting a taxpayer against undue hardship.

5.In the light of the above, the stay granted by the leamed Tribunal shall continue to remain effective till the disposal/decision of the appeal unless expressly recalled after affording an opportunity of hearing. It is,

W.P. No.3830/2014

however, expected that the leamed Tribunal would decide the appeal expeditiously.

6 The petition is, therefore, disposed of in the

(ATHAR

*Asif Mushal/

Uploaded By: Engr. Umer Rasheed Dar