Dr. Sajjad Arshad VS DG, Trade Organization, etc

ORDER SHEET

IN THE ISLAMABAD HIGH COURT, ISLAMABAD

JUDICIAL DEPARTMENT

W.P.No.4743 of 2021 Dr. Sajjad Arshad Versus Director General Trade Organizations (Regulator) and others S. No. of order Date of order / Order with signature of Judge and that of parties or counsel / proceedings Proceedings where necessary. 23.12.2021 M/s Isaac Ali Qazi, Shazia Malik and Aitzaz-ul- Haque, Advocates for the petitioner. Mr. Misbah ul Mustafa, Advocate for respondent No.4.

Mr. Moin Ahmed, Deputy Director, Directorate General of Trade Organizations.

Through the instant writ petition, the petitioner, Dr. Sajjad Arshad, impugns the order dated 03.12.2021 passed by the Directorate General of Trade Organizations (“D.G.T.O.”) which has the effect of removing the petitioner”s name from the voters list for the elections of the Pakistan Poultry Association (“P.P.A.”) for the year 2021-22.

2.The facts essential for the disposal of this petition are that the petitioner”s name was included in the voters list for the elections of the P.P.A. On 26.07.2021, respondent No.4 submitted objections to the Secretary General, P.P.A. seeking the removal of the petitioner”s name from the voters list for the year 2021-22. One of the grounds taken in such objections was that the petitioner”s business namely “Dr. Sajjad Arshad Poultry Farm” was not registered with the Federal Board of Revenue (“F.B.R.”). Vide order dated 31.07.2021, the said objections were allowed and consequently, the petitioner”s name was removed from the voters list. The said order dated 31.07.2021 is not on the record. On 02.08.2021, the petitioner preferred an appeal against the said order before the Election Commission of P.P.A. Along with the said appeal, the petitioner

submitted a copy of the online taxpayer profile inquiry dated 02.08.2021 which shows “Dr. Sajjad Arshad Poultry Farm” as one of the petitioner”s businesses. The said appeal was allowed by the Election Commission of P.P.A., vide order dated 03.08.2021, and the Secretary General of P.P.A. was advised to include the petitioner”s name in the voters list. Against the said order dated 03.08.2021, respondent No.4 preferred an appeal before the D.G.T.O. In the said appeal, it was pleaded inter alia that when the membership of “Dr. Sajjad Arshad Poultry Farm” was renewed by the P.P.A. in March 2021, it was not registered with the F.B.R. as a taxpayer. Vide order dated 16.08.2021, the D.G.T.O. dismissed respondent No.4”s appeal. Respondent No.4 filed writ petition No.3030/2021 before this Court against the D.G.T.O.”s order dated 16.08.2021. Vide order dated 12.11.2021, this Court disposed of the said writ petition in the following terms:- “Since the learned counsel for respondent No.4 in order to defend the order dated 16.08.2021 passed by the Directorate General of Trade Organizations (“D.G.T.O.”) relied on certain documents, which were not part of the record of the proceedings before the D.G.T.O., this Court deems it appropriate, to set aside the said order dated 16.08.2021 and remand the matter to the D.G.T.O. for a decision afresh on the appeal against the order dated 03.08.2021 passed by the Election Commission of Pakistan Poultry Association / respondent No.2. The D.G.T.O. may consider the documents that are placed on the record by either party and is expected to decide the matter within a period of two weeks from the date of the receipt of this order.

Disposed of in the above terms.”

3.The post-remand proceedings culminated in the order dated 03.12.2021 which has been assailed by the petitioner in the instant writ petition. Vide the said order dated 03.12.2021, respondent No.4”s appeal against the order for the inclusion of the petitioner”s name in the voters

list of P.P.A. was allowed and it was directed that his name be removed from the voters list for the elections of the P.P.A. for the year 2021-22.

4.Learned counsel for the petitioner, after narrating the facts leading to the filing of the instant petition, submitted that the petitioner holds N.T.N. No.0434044-2 and has remained on the active taxpayer”s list since 24.10.1995; that the petitioner is the sole proprietor of “Dr. Sajjad Arshad Poultry Farm,” which was added as his business on 05.08.2002; that “Dr. Sajjad Arshad Poultry Farm” has been issued a membership certificate by the P.P.A. and the same is valid up to 31.03.2022; that N.T.N. mentions in the said certificate is the same as that of the petitioner; that the membership of “Dr. Sajjad Arshad Poultry Farm” has been renewed from time to time and it was last renewed in March 2021; that the said certificate has not been recalled at any material stage; that the petitioner has regularly been filing his income tax returns with “Dr. Sajjad Arshad Poultry Farm” as his business; that the omission in the records of the F.B.R. was corrected on 02.08.2021 by including “Dr. Sajjad Arshad Poultry Farm” as one of the petitioner”s businesses; and that the D.G.T.O. was under an obligation to apply his mind to the entire record produced by the petitioner which clearly showed that prior to March 2021 and after 1995, “Dr. Sajjad Arshad Poultry Farm” was one of the petitioner”s businesses having N.T.N. No.0434044-2. Learned counsel for the petitioner prayed for the writ petition to be allowed in terms of the relief sought therein.

5.On the other hand, learned counsel for respondent No.4 submitted that under Rule 11(1)(e) of the Trade Organizations Rules, 2013

(“the 2013 Rules”), a business concern is not eligible for the grant of membership or its renewal if it does not have a valid national tax number and sales tax registration, if applicable; that under Rule 11(4) of the said Rules, a membership of a trade organization can be granted for a period of one year and shall expire on 31st of March each year irrespective of the date for the grant of membership; that for the renewal of membership of any trade organization, it is mandatory for the member to have a valid national tax number; that the petitioner did not bring any document on record to prove the filing of income tax returns and sales tax returns for the preceding year, which showed “Dr. Sajjad Arshad Poultry Farm” as one of his business concerns; that the online taxpayer profile inquiry carried out by respondent No.4 on 26.07.2021 did not show “Dr. Sajjad Arshad Poultry Farm” as one of the petitioner”s business concerns; that the Secretary General of P.P.A., after checking the online status of the petitioner”s business concern satisfied himself that “Dr. Sajjad Arshad Poultry Farm” was not registered with the F.B.R.; that the order of the Secretary General of P.P.A. removing the petitioner”s name from P.P.A.”s voters list was set-aside by the Election Commission of the P.P.A. as well as the D.G.T.O. through unreasoned orders; that after this Court remanded the matter back to the D.G.T.O., the petitioner was given an opportunity to establish that by the cutoff date for the renewal of membership i.e., 31.03.2021, “Dr. Sajjad Arshad Poultry Farm” was one of the petitioner”s business concerns registered with the F.B.R. but he was unable to do so; and that the order dated 03.12.2021 passed by the D.G.T.O whereby the

petitioner”s name was removed from the voters list of P.P.A. does not suffer from any legal infirmity. Learned counsel for respondent No.4 prayed for the writ petition to be dismissed.

6.I have heard the contentions of the learned counsel for the contesting parties and have perused the record with their able assistance. The facts leading to the filing of the instant petition have been set out in sufficient detail in paragraphs 2 to 3 above and need not be recapitulated.

7.The 2013 Rules were made by the Federal Government in exercise of the powers conferred by Section 31 of the Trade Organizations, Act, 2013 (“the 2013 Act”). Rule 11(1)(e) of the said Rules provides that any business concern shall be eligible for grant or renewal of membership of any trade organization if such business concern has a valid national tax number and sales tax registration, if applicable.

8.The petitioner is the sole proprietor of “Dr. Sajjad Arshad Poultry Farm.” Where a member is a sole proprietorship, Rule 11(1)(a) of the 2013 Rules requires such a sole proprietorship to hold a national tax number and sales tax registration, if applicable, “in name of the business concern.” Annexed at page 20 of this petition is a membership certificate issued by the P.P.A. to “Dr. Sajjad Arshad Poultry Farm” on 24.05.2021. This certificate shows that the national tax number of the said member is No.0434044-2. Apparently, a membership certificate had already been granted by the P.P.A. to “Dr. Sajjad Arshad Poultry Farm”, and the same had been renewed on 24.05.2021.

9.Rule 11(4) of the 2013 Rules provides that the membership of a trade organization shall be

granted for a period of one year and shall expire on the 31st day of March each year irrespective of the date of grant of membership whereas Rule 11(5)(b) of the said Rules provides that the membership shall be renewable on annual basis subject to furnishing of proof of filing return of income tax and sales tax, if applicable, for the preceding year.

10.The petitioner”s case is that “Dr. Sajjad Arshad Poultry Farm” is one of his business concerns and had been registered with the F.B.R. ever since 1995. Learned counsel for the petitioner drew the attention of the Court to the petitioner”s income tax returns for the years 2012 and 2013 in support of his contention that “Dr. Sajjad Arshad Poultry Farm” was one of the petitioner”s business concerns. These returns do show “Dr. Sajjad Arshad Poultry Farm” as one of the petitioner”s business concerns. There is no column in the subsequent tax return form for a business name.

11.Respondent No.4”s case, however, is that in the past “Dr. Sajjad Arshad Poultry Farm” may well have been registered with the F.B.R. but on the cutoff date for the renewal of its membership (i.e., 31.03.2021), the said member was not registered with the F.B.R. In support of his case, respondent No.4 relies on the taxpayer profile inquiry conducted on 26.07.2021 which does not show “Dr. Sajjad Arshad Poultry Farm” as one of the petitioner”s business concerns. The taxpayer profile inquiry conducted on 02.08.2021 does however show “Dr. Sajjad Arshad Poultry Farm” as one of the petitioner”s business concerns. Respondent No.4 asserts that it was only after respondent No.4”s objections to the inclusion of the petitioner”s name in the voters list of the

P.P.A. was allowed by the Secretary General of P.P.A. vide order dated 31.07.2021 that the petitioner had the name of “Dr. Sajjad Arshad Poultry Farm” included in the F.B.R.”s records as one of his business concerns. It may be mentioned that the Secretary General of P.P.A., in its order dated 31.07.2021, had held as follows:- “2. I have carefully examined the documents and checked the online status which confirms the factual position and shows that Dr. Sajjad Arshad Poultry Farm is not registered with FBR. This does not comply with the requirements, moreover as the class of membership has been changed this year and the voting right for existing member due to change in category would be entitled for voting right after one year as per TO Rules, thus under rule 11(1)(a) with 15(1) of Trade Organizations Rules 2013, the objection is accepted and the name of Dr. Sajjad Arshad of Dr. Sajjad Poultry Farm is removed from the voter list.”

(Emphasis added)

12.Since Rule 11(5)(b) of the 2013 Rules provides inter alia that the membership can be renewed on proof of filing return of income tax and sales tax, if applicable, for the preceding year, it was essential for the petitioner to have brought on record his income tax returns for the year 2020-21 to show that “Dr. Sajjad Arshad Poultry Farm” was one of his business concerns. The petitioner”s income tax returns for the said period do not show “Dr. Sajjad Arshad Poultry Farm” or any other sole proprietorship concern to be the petitioner”s business concerns. The petitioner tried to justify the omission of “Dr. Sajjad Arshad Poultry Farm” as one of his business concerns in the income tax returns for the period 2020-21 by contending that there was no column of business name in the prescribed format of income tax returns for individuals for tax years 2014 onwards. That may well be so but the order dated 02.08.2021 passed by the Assistant Commissioner Inland Revenue under Section 181

of the Income Tax Ordinance, 2001 (“the 2001 Ordinance”) shows 02.08.2021 as the date on which the business of “Dr. Sajjad Arshad Poultry Farm” was operated.

13.The Assistant Commissioner Inland Revenue has also provided the petitioner with a letter showing that “Dr. Sajjad Arshad Poultry Farm” was one of his business concerns since 24.10.1995 having N.T.N.No.0434044-2. The petitioner has also relied on a certificate of withheld income tax from “Dr. Sajjad Arshad Poultry Farm” with respect to a payment made by M/s Supreme Feed (Pvt.) Ltd. on 12.10.2020. This document was not part of the record before the D.G.T.O. Nevertheless, these documents are of no avail to the petitioner unless it is shown that the business income from “Dr. Sajjad Arshad Poultry Farm” was a part of his income tax returns for the year 2020-21 i.e., the year preceding the renewal of the membership.

14.The petitioner national tax number is 0434044-2. The persons listed in Section 80(1) of the 2001 Ordinance to be treated as “persons” for the purpose of said Ordinance do not include a sole proprietorship. Therefore, it is essential for the petitioner to prove that “Dr. Sajjad Arshad Poultry Farm” was one of his business concerns of the taxpayer i.e., the petitioner when the membership was due to be renewed.

15.After taking all the afore-mentioned documents into consideration, I am of the view that the D.G.T.O. ought to have sought the assistance of a senior official from the F.B.R. on the question whether by the cutoff date i.e., 31.03.2021 for the renewal of the membership, “Dr. Sajjad Arshad Poultry Farm” was one of the petitioner”s business concerns registered with

the F.B.R. Furthermore, it also needs to be ascertained that whether the taxpayer”s profile furnished by the petitioner pursuant to Section 114A of the 2001 Ordinance includes “Dr. Sajjad Arshad Poultry Farm” as his business concern. For this purpose, I deem it appropriate to once again remand the matter to the D.G.T.O. by setting-aside the impugned order dated

16.The writ petition is allowed in the above terms.

(MIANGUL HASSAN AURANGZEB)

JUDGE

Sultan*