KARACHI: A Tax Appellate bench of High Court of Sindh dismissed a petition filed by Al-Ghazi Tractors Limited as being not maintainable.

The petitioner company sought declaration regarding legality of S.R.O 563(I)/2022 dated 29.4.2022  and in particular Rules 390, 39P, 39Q, 39R(d), 39S, 39V and 39W .The Court was prayed to the declare the above ultra vires of the 1990 Act. The bench noted that the Petitioner has directly invoked Constitutional jurisdiction of this Court under Article 199 of the Constitution impugning letter dated 16.5.2022 issued by Respondent Deputy Commissioner , whereby, certain documents have been called for processing refund claims of the Petitioner and that the Petitioner’s Counsel was confronted as to maintainability of this Petition. In response counsel for the petitioner has referred to the order dated 27.09.2023 and submits that since the case of the petitioner is fully covered by the judgment passed by Division Bench of Lahore High Court, Lahore, in ICA No. 83099/2022 (Millat Tractors Limited v. Federal Board of Revenue & others), therefore, instant petition may also be allowed in the same terms.

The counsel for the  Respondents submits that unless the petitioner satisfy this Court as to maintainability of instant petition  in view of the judgment of Hon’ble Supreme Court of Pakistan in the case of Commissioner Inland Revenue & others Jahangir Khan Tareen & others, reported in 2022 SCMR 92 as well as unreported judgment passed by  Supreme Court of Pakistan in CA. No. 2019/2016 and others (Deputy Commissioner Inland Revenue & Digicom Trading Pvt.) Limited and another), wherein, it has been held that even if vires of any SRO has been challenged, the matter is to first decided by the Departmental authorities.

The counsel for the Petitioner disputed such position and submitted that reference to the aforesaid judgments is misconceived as the facts of this case are distinguishable, however, requests for time to place on record the judgments of the larger benches of Hon’ble Supreme Court of Pakistan, wherein, it has been decided otherwise. Addressing the issue of maintainability, the learned Counsel for Petitioner contended that since vires of law have been challenged; hence, the Petition is maintainable in view of various earlier pronouncements of Supreme Court. According to him the Petitioners refund claims are in relation to sales which have already taken place and are a past and closed transaction insofar as fulfillment of requisite formalities and production of documents is concerned, hence, the new S.R.O 563(I)/ 2022 dated 29.4.2022 (“SRO 563”). is not applicable to the pending refund claims which are required to be processed in terms of the previous SRO 363(I)/2012 dated 13.04.2012. He has also placed reliance on the cases reported as Total Parco Pakistan Limited v. Pakistan & another (PTCL 2021 CL 576), Commissioner Inland Revenue Zone-I, Regional Tax Office, Quetta v. Messrs Hajvairy Steel Industries (Pvt.) Limited, Quetta and another (2023 SCMR 681), Sindh Revenue Board and others v. Messrs Quick Food Industries (Pvt.) Limited and others (2023 SCMR 1776), Mian Azam Waheed and 2 others v. The Collector of Customs through Additional Collector of Customs, Karachi (2023 SCMR 1247).

The bench after detailed hearing reached to the conclusion that the primary grievance of the Petitioner is in fact a letter dated 16.05.2022 issued by the Deputy Commissioner, Inland Revenue, asking the petitioner company to provide certain documents including copy of tax paid and e-filed sales tax return; an undertaking affirming the genuineness of refund as per Sales Tax Act, 1990 and relevant rules made thereunder; a revolving bank guarantee valid for at least one hundred and twenty days issued by a scheduled bank of an amount not less than the average monthly refund claim during last twelve months and; name, CNIC of buyers along with valid proof of land holding, such as agriculture pass book and copy of record of rights of agricultural land duly verified from Provincial Land Revenue Authorities. Ledger of already purchased agricultural tractors against each buyer.

The bench also noted that in fact, the documents asked for at Serial Nos. (a) to (c) are the same as required under the previous SRO 363, whereas, the documents at Serial No.(d) are being asked for pursuant to SRO 563. It is neither a Show Cause  Notice; nor any final order, whereby, the Petitioner could be aggrieved of. At best, it is providing the Petitioner an opportunity to satisfy the concerned Deputy Collector as to the fulfillment and requirements prescribed under S.R.O 563. If according to the Petitioner, S.R.O 563 does not apply to its pending refund claims as they pertain to a period prior to issuance of the said S.R.O, then it will only be a legal question that whether the said S.R.O is applicable in the facts and circumstances as above. It does not require a challenge to the vires of certain rules so as to seek remedy under the Constitutional jurisdiction of this Court directly.

“In our considered view, the Petition appears to be premature and has been filed before any actual cause of action has accrued. By mere addition of a prayer clause challenging vires of certain rules, an attempt has been made to argue that this Court has jurisdiction in the matter. On the contrary, in our considered view, the Petitioner ought to have replied to the impugned letter with all legal objections, including an objection as to the very applicability of SRO 563 on pending refund claims and if at all an adverse order was passed by the concerned Deputy Collector rejecting the refund claims, the Petitioner could have availed remedy of Appeal under Section 45B and Section 46 of the Sales Tax Act, and thereafter by way of a Reference Application before this Court under Section 47 ibid. The question of law now being agitated as to any retrospective application of S.R.O 563 could have been answered by this Court in its appropriate jurisdiction. We do not see any reason to prematurely interfere in this matter, just for the reason that since vires of certain rules have been challenged, the entire controversy be finally adjudicated in Constitutional jurisdiction. The law obliges courts ought to abstain from deciding larger if a case could be decided on narrower grounds and that it is ideal for courts to confine determinations to issues pivotal for the determination of a case. Hence, the entire issue so raised in this petition must not necessarily be decided by us in this Constitutional jurisdiction. In fact, a factual determination is to be made that whether the refund claims are otherwise admissible or not. In view of here in above facts and circumstances the Petition appears to have been filed prematurely; hence, we are not inclined to exercise any discretion in this matter and therefore, the same is dismissed as not maintainable. The Petitioner, if so advised, may respond to the impugned letter dated 16.05.2022 by raising all such legal objections as may be available and the concerned Deputy Commissioner / Department shall proceed further, in accordance with law” the judgment said.