Judgment Sheet

IN THE LAHORE HIGH COURT LAHORE JUDICIAL DEPARTMENT

W.P. No.249168 of 2018.

JUDGMENT

Abdul Salam

V E R S U S

Federation of Pakistan etc

Date of hearing 17.05.2019.

Petitioner by: Mr. Raza Ahmad Cheema Advocate for

petitioner.

Respondents

by:

Malik Abdullah Raza Advocate vice Mr. Sarfraz

Ahmad Cheema Advocate for respondents.

SHAMS MEHMOOD MIRZA, J.-The selection

of the petitioner for audit under section 177 of the Income

Tax Ordinance, 2001 (the Ordinance) intimated through

notice dated 14.09.2017 has been brought under challenge

in this constitutional petition filed under Article 199 of the

Constitution of the Islamic Republic of Pakistan.

2. It is submitted that the petitioner has already been

selected for audit for tax year 2015, which proceedings

have not yet been finalized, and as such his case could not

have been selected once again for audit for tax year 2016

through notice dated 14.09.2017. The petitioner draws

support from Clause 105 of Part IV to the Second Schedule

of the Ordinance (Clause 105) inserted through Finance

Act, 2018 to argue that it is retrospective in its operation. In

support of that construction, it is contended that the

legislature intended to confer retrospective operation to

Clause 105 in view of the language employed therein and

the fact that it was beneficial to the taxpayers as a whole

W.P. No.249168 of 2018. ~ 2 ~

body. The petitioner refers to the text of Clause 105 which

makes inapplicable the provisions of sections 177 and 214C

of the Ordinance to a case in which selection for audit has

already taken place in the last three preceding years. It was

contended that retrospectivity is in-built in Clause 105.

3. The respondents contend that Clause 105 become

operational from the date of its introduction in Part IV to

the Second Schedule and accordingly would be applicable

to case selected for audit on or after 01.07.2018. It is thus

argued that it has no applicability to the case of the

petitioner as he was selected for audit prior to the inclusion

of Clause 105 in Part IV to the Second Schedule through

Finance Act, 2018 promulgated on 01.07.2018.

4. In rebuttal it was submitted that the construction put

forward by the respondents on prospective operation of

Clause 105 would make it operational in the year 2021, an

absurdity not permissible in law. Keeping in view the text

of Clause 105, the petitioner submits it applies to cases

already selected before the effective date of Finance Act,

2018 i.e. 01.07.2018.

5. The contentions of both the parties to this petition

were directed to ascertain whether Clause 105 operates

retrospectively or not. Clause 105 reads as under:

The provisions of section 177 and 214C shall not apply to a person whose income tax affairs have been audited in any of the preceding three tax years: Provided that the Commissioner may select a person under section 177 for audit, with approval of the Board.

The fact that Clause 105 is beneficial in nature and

provides exemption to a taxpayer is not the issue. The moot

point is the period when it shall be made applicable i.e.

from the date when Finance Act, 2018 was made applicable

or retrospectively.

W.P. No.249168 of 2018. ~ 3 ~

6. Before proceeding in the matter, it would be useful

to set out the fundamental legislative principle and common

law presumption underpinning the statutory construction

that every statute is intended to operate prospectively rather

than retrospectively. Maxwell on the Interpretation of

Statutes (Twelfth Edition) deals with the issue of

presumption against prospectively by articulating the

following rule:

It is a fundamental rule of English law that no statute shall be construed to have a retrospective operation unless such a construction appears very clearly in the terms of the Act, or arises by necessary and distinct implication.

The presumption could get displaced in case the

legislation itself states expressly that it is intended to apply

retrospectively. The presumption can also be considered as

dislodged if the Court determines from the text of the

statute an intendment or necessary implication to the effect

that it shall carry retrospective application. The case of the

statute expressing clearly the retrospective intention poses

no difficulty for the text itself would indicate that the statute

would come into operation on a specific date prior to its

promulgation thereby affecting the existing rights and

obligations. For discerning the necessary implication or

intendment, we would do well to look at the following

passage of the Australian High Court’s decision in Worrall

v. Commercial Banking Co of Sydney (1917) 24 CLR 28

(32):

Necessary intendment only means that the force of the language in its surroundings carries such strength of impression in one direction, that to entertain the opposite view appears wholly unreasonable.

W.P. No.249168 of 2018. ~ 4 ~

7. In addition to the above, there are statutes or

provisions contained therein which are regarded as

exceptions to the presumption against retrospectivity. These

include statutes which are characterized as declaratory,

validating or procedural in nature. Of course, where the

statute is meant to explain, clarify or declare the meaning of

an earlier statute, retrospective operation thereof is

generally intended for it is meant to supply an omission or

clear up doubts with regard to a prior law. A validating

statute seeks to overcome an invalidity arising under a pre-

existing law through a Court judgment and as such must

have retrospective application. In regard to statutes or

provisions relating to procedure which do not

retrospectively impair a substantive right, the presumption

against retrospectivity does not apply. In Commissioner of

Income Tax-I, Ahmedabad v. Gold Coin Health Food

Private Limited (2008) 9 SCC 622, the Indian Supreme

Court relied on the following extract from the treatise

Principles of Statutory Interpretation (11th Ed.) by Justice

G.P. Singh:

The presumption against retrospective operation is not applicable to declaratory statutes. As stated in Craies and approved by the Supreme Court: For modern purposes a declaratory Act may be defined as an Act to remove doubts existing as to the common law, or the meaning or effect of any Statute. Such acts are usually held to be retrospective.......….........An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended. The language `shall be deemed always to have meant' or `shall be deemed never to have included' is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is

W.P. No.249168 of 2018. ~ 5 ~

declaratory, it would not be so construed when the amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law when the constitution came into force, the amending Act also will be part of the existing law.

The Indian Supreme Court also quoted with

approval the following passage from the case of Zile Singh

v. State of Haryana and others AIR 2004 SC 5100, was

also noted with approval:

14. The presumption against retrospective operation is not applicable to declaratory statutes....In determining, therefore, the nature of the Act, regard must be had to the substance rather than to the form. If a new Act is “to explain” an earlier Act, it would be without object unless construed retrospectively. An explanatory Act is generally passed to supply an obvious omission or to clear up doubts as to the meaning of the previous Act. It is well settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended.... An amending Act may be purely declaratory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect.

8. We can also add on to this list legislation that is

characterized by the Courts as beneficial or remedial having

retrospective effect. At times the statute itself is intended to

be applied prospectively by the legislature by making it

applicable with effect from a particular date. This has,

however, not dissuaded the Courts from holding that the

fundamental principle of statutory construction or

presumption noted above shall not apply in a case where the

statute being construed is beneficial or remedial. Quite how

W.P. No.249168 of 2018. ~ 6 ~

this consequence is achieved has never been explained in

detail by the Courts barring to state the obvious that it is for

the benefit of the general public. It is also this category of

cases that have vexed the Courts the most and thus leaves

us with the task of some explanation to do. Remedial

statutes may be applied retrospectively to existing rights

where enforcement of substantial rights is not damaged or

where jurisdiction is conferred or altered or new procedural

rules are introduced as it does not impair the substantive

rights. Statutory Construction by Crawford has to say this

on the subject of remedial statutes.

Even remedial statutes may be subject to the principles hereinto force discussed, opposing any construction which will give the enactment retrospective operation. Yet, since remedial statutes are usually looked upon with favour by the Courts, they should be liberally construed. But there appears to be considerable confusion in the cases with reference to giving remedial Acts retrospective effect through construction. If the rule of liberal construction is to be applied, as it obviously should then any doubt should be resolved in favour of retrospective operation, if such operation does not destroy or disturb vested rights, impair the obligations of contracts, create new liabilities, violate due process of law or contravene some other Constitutional provision, and if such operation will carry out the intention of the legislature as ascertained through the application of the principle of liberal construction. In other words, a statute relating to remedial law may properly, in several instances, be given retrospective

operation. (Emphasis supplied)

9. The Supreme Court has been aware of the

significance of retrospective legislation and has given

opinions in regard thereto in a number of cases. Insofar as

judgments which elucidate the basic concept of

retrospective operation of a statute, it would be useful to

refer to the recent case of Zila Council Jehlum through

W.P. No.249168 of 2018. ~ 7 ~

District Coordination Officer v. M/s Pakistan Tobacco

Company Limited and another PLD 2016 SC 398 in which

the Hon’ble Supreme Court held as follows:

Although the Legislature can legislate prospectively and retrospectively, such power is subject to certain constitutional and judicially recognized restrictions. According to the canons of construction, every statute including amendatory statutes is prima facie prospective, based on the principle of nova constitutio futuris formam imponere debet, non praeteritis (which means ‘a new law ought to regulate what is to follow, not the past’ as per Osborn: Concise Law Dictionary); unless it is given retrospective effect either expressly or by necessary implication. In other words, a statute is not to be applied retrospectively in the absence of express enactment or necessary intendment, especially where the statute is to affect vested rights, past and closed transactions or facts or events that have already occurred. This principle(s) is attracted to fiscal statutes which have to be construed strictly, for they tend to impose liability and are therefore burdensome (as opposed to beneficial legislation). Furthermore, it is not only the wording/text of the statute which is to be considered in isolation; we are not to examine simpliciter whether such law has a retrospective effect or not, rather it has to be examined holistically by considering several factors such as, the dominant intention of the legislature which is to be gathered from the language used, the object indicated or the mischief meant to be cured, the nature of rights affected, and the circumstances under which the statute is

passed. (Emphasis supplied)

10. The above passage with precision illustrates the

position of law on the issue of retrospective application of

law. We may also refer to Maxwell’s Interpretation of

Statutes, 12th Edition with respect to the retrospective

operation of law:

Perhaps no rule of construction is more firmly established than this - that a retrospective

W.P. No.249168 of 2018. ~ 8 ~

operation is not to be given to a statute so as to impair an existing right or obligation, otherwise than as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only. The rule has, in fact, two aspects, for it, involves another and subordinate rule, to the effect that a statute is not to be construed so as to have a greater retrospective operation than its language

renders necessary. (Emphasis supplied)

11. In Hitendra Vishnu Thakur v. State of Maharashtra

AIR 1994 SC 2623, the Indian Supreme Court laid down

the following principles regarding the ambit and scope of

an amending Act and its retrospective application:

(i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits.

(ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature.

(iii) Every litigant has a vested right in substantive law but no such right exists in procedural law.

(iv) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accomplished.

(v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation unless otherwise provided, either expressly or by necessary implication.

W.P. No.249168 of 2018. ~ 9 ~

12. A five member bench of the Indian Supreme Court

in the case of Commissioner of Income Tax-I, New Delhi v.

Vatika Township Private Limited (2014) 367 ITR 466 was

dealing with the issue whether the proviso added to section

113 of the Income Tax Act through Finance Act, 2002 was

to operate prospectively or being clarificatory and curative

in nature had retrospective operation. In regard to the

general principles for interpretation of a statute, it was

stated as under:

31. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. Law passed today cannot apply to the events of the past. If we do something today, we do it keeping in view the law of today and in force and not tomorrow’s backward adjustment of it. Our belief in the nature of the law is founded on the bed rock that every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit: law looks forward not backward. As was observed in Phillips vs. Eyre[3], a retrospective legislation is contrary to the general principle that legislation by which the conduct of mankind is to be regulated when introduced for the first time to deal with future acts ought not to change the character of past transactions carried on upon the faith of the then existing law. 32. The obvious basis of the principle against retrospectivity is the principle of 'fairness’, which must be the basis of every legal rule as was observed in the decision reported in L’Office Cherifien des Phosphates v. Yamashita-Shinnihon Steamship Co. Ltd[4]. Thus, legislations which modified accrued rights or which impose obligations or impose new duties or attach a new disability have to be treated as prospective unless the legislative intent is

W.P. No.249168 of 2018. ~ 10 ~

clearly to give the enactment a retrospective effect; unless the legislation is for purpose of supplying an obvious omission in a former legislation or to explain a former legislation. We need not note the cornucopia of case law available on the subject because aforesaid legal position clearly emerges from the various decisions and this legal position was conceded by the counsel for the parties.

Having stated the principles of statutory

construction of a statute, the Indian Supreme Court

nevertheless created an exception in case of beneficial

legislation by holding as follows:

We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as

retrospective. (Emphasis supplied)

13. A learned Division bench of this Court in the case

of Commissioner Inland Revenue Zone-II, Regional Tax

Office, Multan v. Mrs. Ambreen Fawad 2014 PTD 320 was

dealing with the issue whether the benefit of Clause 103B

of Part-I to the Second Schedule of the Ordinance

introduced in the year 2010 could have retrospective effect.

While referring extensively from Interpretation of Statutes,

Tenth Edition by N.S Bindra on the terms “beneficial

legislation” and “remedial and curative statutes” and also

from the case reported as Commissioner of Income Tax v.

Shahnawaz Limited and others 1993 SCMR 73, it was held

that

W.P. No.249168 of 2018. ~ 11 ~

11. The legal position that emerges is that generally beneficial legislation is to be given liberal interpretation, however for the said legislation to have a retrospective effect, the beneficial legislation must carry curative or remedial content. Such legislation must, therefore, either clarify an ambiguity or an omission in the existing law and must therefore be explanatory or clarificatory in nature. While beneficial legislation is to be liberally interpreted, in order to advance the beneficent object of the statute, it in no manner means that “beneficial legislation” or “liberal interpretation” necessarily includes or interchangeably means retrospective application of the statute. Unless the legislation is remedial, curative, explanatory or clarificatory, it cannot be interpreted retrospectively merely on the ground that the legislation is generically beneficial in nature.

(Emphasis supplied)

The above passage lays down the rule that statute to

which attributes of beneficial legislation can be attached

shall only have retrospective effect if it is also curative or

remedial in nature or to be more precise if it can be said to

be remedying any perceived wrong.

14. The cannon that beneficial legislation is necessarily

to be interpreted retrospectively was not adhered to in the

judgment rendered in writ petition No.11276 of 2016 titled

Shahzad Mehmood Ahmad v. Federation of Pakistan etc.

This Court was dealing with the question whether section

122C of the Ordinance could be given retrospective

operation or not. It was argued before this Court that the

said provision being beneficial in nature must be given

retrospective application. Repelling the said argument, this

Court held as under:

Beneficial legislation is a term which is used to refer to legislation which gives some benefit to a person and thereby remedies some perceived injustice. Thus, it is often said that beneficial and remedial legislation must be given a liberal

W.P. No.249168 of 2018. ~ 12 ~

construction, which constitutes the widest interpretation which its language will permit. Under the principles of statutory interpretation, if legislation is beneficial in nature but contains ambiguous provisions which are susceptible to alternative interpretations, the interpretation which advances and preserves the object of the legislation and is consistent with the subject matter and the fair meaning of the language of the provisions, is the one which will be adopted by the Courts [see Bull v Attorney-General (NSW) (1913) 17 CLR 370]. Nevertheless, the task remains one of statutory construction and the operation of this principle should be understood against this background……….It may, however, be kept in mind that the operation of this principle does not mean that the Court should go beyond the true significance of the provision in order to provide the relief rather the provision should be construed so as to give the fullest relief which the fair meaning of its language will allow. A court should not ignore the express words of a provision capable of only one construction by interpreting it in a way so as to reflect or further the objectives of the statute. It is also not a rule carved in stone that every provision contained in a statute or amendment affected therein should be construed beneficially simply because the statute in question is characterized as beneficial. The purpose of the provision in the context of the statute itself will

govern the interpretation…………(Emphasis

supplied)

15. The case of Tobacco Company without supplying

any reasons and the case of Vatika Township to a limited

extent appeared to have carved out an exception to the strict

construction rule usually followed by the Courts in

interpreting the statutes by granting retrospective

application to beneficial legislation. In the case of Tobacco

Company, the Hon’ble Supreme Court did not furnish any

reason whatsoever for excluding beneficial legislation from

the ambit of strict construction rule. Similarly, the

W.P. No.249168 of 2018. ~ 13 ~

exception to the strict construction rule fashioned by Vatika

Township’s case appears to be restricted to procedural

provisions as is apparent from the above highlighted

portion. The learned Division bench of this Court in the

case of Mrs. Ambreen Fawad postulated that retrospectivity

shall not necessarily be attached to beneficial legislation

unless it can also be characterized as remedial. This Court

in Shahzad Mehmood Ahmad’s case cautioned against

ignoring the express words of the statute for arriving at an

altogether different meaning than was intended through

interpretative process by labeling the statute as beneficial

and remedial. We have already noted that the presumption

against retrospectivity does not apply to a statute or

provisions contained therein that are concerned only with

procedure which do not impact existing substantive rights.

It is apparent that the ratio of Vatika Township regarding

beneficial legislation having retrospective effect is relatable

to procedural provisions and nothing more and that the law

enunciated in paragraphs 31 and 32 of the judgment for

strict construction of statutes and presumption against

retrospectivity of statutes shall continue to govern the

interpretation of statutes.

16. Precisely how a law shall be labeled as

retrospective has also confounded writers and judges alike.

The famous exposition by Joseph Story in Society for the

Propagating of the Gospel v. Wheeler 22F. Cas. 756, 767

(C.C.D.N.H. 1814) (No. 13,156) defined a law as

retroactive where it “takes away or impairs vested rights

acquired under existing law, or creates a new obligation,

imposes a new duty, or attaches a new disability in respect

to transactions or considerations already past." It is,

however, manifest that "[a]lmost all laws operate

retrospectively in that they must defeat the subjective

W.P. No.249168 of 2018. ~ 14 ~

expectations of those who planned their conduct according

to the existing law." [See Professors Douglas Kmiec and

John McGinnis The Contract Clause: A Return to the

original Understanding 14 Hastings Const. L.Q. 525, 528

(1987)]. Lon L. Fuller in The Morality of Law 53 (1964)

says that "[i]f every time a man relied on existing law in

arranging his affairs, he were made secure against any

change in legal rules, the whole body of our law would be

ossified forever." To take as example, every time there is an

increase in the real estate tax or repeal of tax exemption

through statutory intervention, it impacts expectations and

the existing interests and rights of the citizens. Viewed in

the context of the principle that the entire purpose of laws is

to create and vary rights and obligations, every law has

retrospective operation. Similarly, the retrospective

application of beneficial legislation is not a set principal of

statutory construction (see Shyam Sunder and others v. Ram

Kumar and another (2001) 8 SCC 24). It is already noted

above that beneficial legislation should receive liberal

construction and interpretation to ensure attainment of its

objects and nothing more. A statute cannot be said to

operate retrospectively simply because it is beneficial in

character particularly when its text does not warrant such a

construction.

17. It is no doubt in the domain of the legislature to

promulgate legislation with retrospective effect. Yet, there

is strong presumption of prospective application attached to

legislation, which can only be displaced if the text expressly

states that the statute or a provision contained therein is

intended to apply retrospectively or if necessary,

implication to that effect is clearly spelt out from the words

of the statute. This presumption can also be displaced or

weakened to some extent if the legislation can be

W.P. No.249168 of 2018. ~ 15 ~

characterized as declaratory, validating or procedural in its

operation and effect. It is now fairly well settled to rule of

statutory interpretation that the Court shall construe statutes

with more attention and regard to the language of the text to

ascertain the statutory intent. Unless the intention of the

legislature is unambiguously brought out by a clear and

strong text and such an intention cannot otherwise be

satisfied, a statute ought not to receive a retrospective

construction. In case of ambiguity in the text, the provision

ought to be construed as prospective only. It also needs to

be emphasized that nearly all the statutes under the current

legislative drafting practice are made effective from a date

mentioned therein. In such a case, it would be desirable if

reliance on implication or intendment for determining

retrospective application of a statute on interpretation of the

language be avoided. When the legislature itself expresses

its intention to make the statute operational from a

particular date, the Courts have no business to strain the

interpretative process to hold otherwise.

18. In the present case, the law as it existed prior to the

promulgation of Finance Act, 2018 had no ambiguity

regarding the selection of audit of a person. Sections 177

and 214C of the Ordinance contained no bar for selection of

a person for audit in successive years. No doubt, a learned

bench of this Court in the case of Nestle Pakistan Limited v.

Federal Board of Revenue 2017 PTD 686 directed the

Federal Board of Revenue to formulate a uniform policy

regarding audit and also gave certain directions to be

incorporated in the rules and policies to be framed in future.

One such direction, relevant to this case, reads as follows:

A taxpayer selected and audited in preceding tax year/ period shall not be selected and audited without giving reasons for such selection. FBR shall enhance its capacity to

W.P. No.249168 of 2018. ~ 16 ~

audit a selected taxpayer for last five years to give respite from consecutive selections.

The challenge to this judgment was made up to the

Hon’ble Supreme Court which in its judgment reported as

Commissioner of Inland Revenue, Sialkot and others v.

Messrs Allah Din Steel and Rolling Mills and others 2018

SCMR 1328 held that mere selection for audit does not

cause an actionable injury to the taxpayer. It was

furthermore observed in the said judgment that it does not

lie in domain of the Courts to devise policies and make

recommendations as it encroaches upon the sphere of the

Federal Board of Revenue. The Hon’ble Supreme Court

thus made obvious the position of law as it always existed

that repeated selection of taxpayer for audit was within the

scope of sections 177 and 214C of the Ordinance.

19. It is in this background that Clause 105 must be

interpreted. It is evident that Clause 105 did not amend or

clarify any existing provision of the Ordinance. It merely

regulated the selection process. It may also be emphasized

that Clause 105 did not remove any ambiguity or supplied

any omission regarding the legal position on selection of

cases for audit as was demonstrated by the ratio laid down

in the case of Messrs Allah Din Steel and Rolling Mills. To

construe Clause 105 as curative, remedial or clarificatory in

nature would thus be contrary to the established principles

of construction of statutes. Clause 105 was inserted in the

Ordinance through Finance Act, 2018 which was

promulgated on 01.07.2018. It will take effect from that

date. A bare reading of Clause 105 also supports the

conclusion that it shall operate from the date of the

promulgation of Finance Act, 2018. If the legislature had

intended Clause 105 to take effect from a date prior to

01.07.2018, it would have said so explicitly. It is also

W.P. No.249168 of 2018. ~ 17 ~

evident that Clause 105 prescribes legal consequences only

for the future. The true import of this provision is simply

that selection of a person for audit after 01.07.2018 can be

affected if he had been selected for audit in the preceding

three years. The selection for audit in the preceding three

years which attaches new consequences for future selection

after 01.07.2018 does not make Clause 105 per se

retrospective in its operation. Put another way, Clause 105

is not a case of prospective law impinging upon prior

transactions or rights created under an old law rather it

imposes new consequences for the future in respect of an

event that had happened prior to its introduction in the

Ordinance. Clause 105 thus changes present legal rights and

obligations with reference to a past event i.e. selection of

audit within the time period prescribed by it.

20. Learned counsel for the petitioner referred to a

judgment rendered by this Court in writ petition No.257828

of 2018 titled “Faisalabad Electric Supply Company

Limited v. The Federation of Pakistan through Secretary,

Finance, Islamabad and others” rendered on 03.04.2019 in

which the proviso to sub-section (2) of section 25 of the

Sales Tax Act, 1990, inserted through Finance Act, 2018,

was held to be retrospective in its operation. It was

submitted that Clause 105 and proviso to sub-section (2) of

section 25 of the Sales Tax Act, 1990 are pari materia and

thus Clause 105 deserves the same interpretation. This

submission has no force. It prima facie appears to this

Court that the purport of Clause 105 and proviso to sub-

section (2) of section 25 of the Sales Tax Act, 1990 is

different. Clause 105 deals with selection for audit whereas

the proviso in question deals with the conduct of the audit.

Be that as it may, the interpretation of proviso to sub-

section (2) of section 25 of the Sales Tax Act, 1990 is not in

W.P. No.249168 of 2018. ~ 18 ~

issue before this Court and thus no definitive findings can

be rendered thereon. Suffice it to state that the law laid

down in the afore-mentioned judgment is not applicable to

Clause 105 for the reasons stated above.

21. This Court does not find Clause 105 to have any

retrospective application. In the result, this petition fails and

is accordingly dismissed.

(Shams Mehmood Mirza)

Judge.

Announced in open court on 24.06.2019.

Judge.

Approved for reporting.

Judge.

Ihsan