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