OF TEE Ie. PEILDION ONDER ARTTGE 499 op TMS coNszr. AEG BERURIC OF PrTSRe, 1973. REY NAMB, PRay anp ORDER ATTaceRp, Ly: “p-Form No:HCJD/C-121 ORDER SHEET - IN THE LAHORE HIGH COURT LAHORE JUDICIAL DEPARTMENT Case No. W, P. 8865 of 2017. Wilshire Laboratories (Pvt.) Lid. Versus Federation of Pakistan etc. SNe. of order? Proceedin Proceedings Date of arder? | ‘Order with signature of Judge and that of Parties of counsel, where necessary. ol 27.03.2017. Barrister Haroon Dugal, Advocate for the petitioner. Mr. Sarfraz Ahmad Cheema, Advocate for the respondents, on Court’s call. Petitioner is aggrieved of notice dated 08.02.2017 issued by Federal Board of Revenue (*FBR”)/ respondent No.2, whereby its case has been selected for audit under Third Proviso of Clause 72B of Part-IV of 2™ Schedule to the Income Tax Ordinance, 2001 (“Ordinance of 2001”). 2. Learned counse! for the petitioner submits that last exemption certificate, against import, under Section 148 of the Ordinance of 2001 on the raw material, was issued in December, 2015; whereas the Third Proviso was inserted through Finance Act, 2016, which is applicable from 01.07.2016. He contends that this Proviso cannot be applied retrospectively, therefore, petitioner’s case could not have been selected through impugned notice. Leamed counsel for the respondents has opposed the petition. 3. Heard, record perused. 4. The submissions made by learned counsel for the petitioner need consideration, at the first instance, by the Commissioner himself. If the contention thatAn petitioner’s casc has been selected on the basis of exemption certificate issued” in December, 2015 is correct, then petitioner has a prima facie case because general rule is that no provision of law shall be applicable retrospectively unless intent of legislature is depicting from the amending/inserted clause. S$. Observing judicial restraint, this matter is referred to Commissioner Inland Revenue/respondent No.3 who shall treat this petition as representation and decide the matter, after providing opportunity of being heard to the petitioner, through speaking order attending to the objections/grounds raised in this petition. The petitioner shall appear’ before respondent No.3 on 03.04.2017 at 10:00 a.m. Till-decision as directed, the audit, in pursuance of impugned notice shall not be initiated. 6. At this stage, learned counsel for the petitioner submits that he has also challenged vires of the Proviso. Let the fact, whether the provision is being applied retrospectively, be determined by the Commissioner. If petitioner would feel aggrieved thereafter, it may approach this Court again through fresh petition. (Shahid 3:9) Khan) JuaghIN THE HONORABLE LAHORE HIGH COURT, LAHORE Writ Petition No. Gl” of 2017 Wilshire Laboratories (Pvt.) Ltd. 124/L-Industrial Esti, Kot Lakbpat, Lahore, ‘Through its duly authorized representative Mr. Farrukh Hameed son of Abdul Majeed. Petitioner Versus 1, Federation of Pakistan ‘Through Secretary, Revenue Division, Constitutional Avenue, Sector G-5, Islamabad. 2. Federal Board of Revenuc Through its Chairman, Constitutional Avenue, Sector G-5, Islamabad. 3. Commissioner Intand Revenue Zone-V,, Corporate Regional Tax Office, Lahore. 4. Assistant/Deputy Commissioner Inland Revenue Audit UnitlV, ‘Zone-V, Corporate Regional ‘Tax Olice, . Lahore. Respondents PETITION UNDER ARTICLE 199 OF THE CONSTITUTION OF THE ISLAMIC REPUBLIC OF PAKISTAN, 1973.i mt 12 Thitd proviso of Clause 72B is not only in conffict and inconsistent with Section 214C of ITO, 2001, but is also in conflict with the entire scheme of ITO, 2001, and the spirit behind enacting provisions for audit, by creating a default based audit system, Furthermore, such an audit is not commensurate with the purpose of inspecting that the raw material is being used only for self consumption, as required under the law. It instead grants broad ranging and unstructured powers to tax authorities (0 undertake fishing and roving enquiry of every person who has attained the benefit of the exemption. Therefore, third proviso of Clause 72B is in conflict with the scheme and spirit of the statute. ‘That the amended third proviso of Clause 728 is bad in law, against E. the settled jurisprudence of this Honorable Court and discriminatory in nature and in violation of, infer alia, Article 4 read with Azticle 10A and Article 25 of the Constitution of the fslamic Republic of Pakistan, 1973; ence of this Court to rai ss the kind indul F. That the Potitioner se additional grounds al the bar at the time of arguments, In view of the foregoing, it is most respectfully and humbly prayed that this Honorable Court may be pleased 10:13 3. Declare and hold that the third proviso to Clause 728 of Part LV of : the Seeond Schedule to the Income Tax Ordinance, 2001, is in conflict with and inconsistent with Section 216C of the alorementioned Ordinance; ii, Declare and hold that Section 214C has overriding and overruling cllect over third proviso to Clause 721 of Part IV of the Second Schedule to the Income ‘Tax Ordinance, 200: 4, Declare and hold and read down the third proviso to Clause 72B of Part IV of the Second Schedule to the Income Tax Ordinance, 2001, to be subservient to Section 214C of the aforementioned Ordinance, and also that « person or elasses of persons ean only be selecied cbrowgh the process as provided under Section 214C (1) of the aforementioned Ordinance; iv, Permanently restrain the respondents or any officer acting under them from undertaking audit of the retums filed by the Petitioner, » under the third proviso t0 Clause 72B of Part [V of the Second Schedule to the Ieome Tax Ordinance, 2001 or from giving effect to Audit Notices dated 08-02-2017 and 06-03-20!ee, Declare and hald that third proviso to Clause 72B of Part IV of the 2001, is the Income Tax Ordinance, Second Schedule 10 prospective in operation, and the ‘latest tax year’ under it would start trom the Tax Yeur 2017 July, 2017 — June, 2618) ii, Declare and hoid the Audit Notices dated 08-02-2017 and 06-03- 2017 issued by the Respondents No. 3 and 4 respectively under Section 177 of the Income Tax Ordinance, 2001, to be illegal, void and of no legal effect; iii, Declare and hold that the Circular No. 7 of 2016 dated 27-07-2016 issued by the Respondent No. 2 to be illegal. void and of no iegal ccffect, to the extent that it retrospectively applies third proviso to Clause 728 of Part IV of the Second Schedule to the Income Tax Ordinance, 2001, ta the Tax Year 2016 (uly, 2015 ~ June, 2016); Permanently restrain the respondents or any officer acting under iv. them liom retrospectively applying the third proviso to Clause 72B. of Part IV of the Second Schedule to the Income Tax Ordinance, 2001, t0 conduct audit of the Petitioner with respect to the return filed for the Tax Year 2016 (July, 2015 ~ June, 2016);Any other relief which this Honorable Court may deem fit and appropriate in the circumstance of the case may also be allowed. 4 Wilshire Lbs (PvEy Ltd. Petitioner Mpiged Barrister Haroon Dugal Bar-at-Law (Lincoln's Inn) LL.B. (Hones) (London) Advocate High Court CC PLL.H 5468 through: Ebsan Ullah Manj Advocate High Court. Syed M. Ghazenfur Advocate High Court Shaffaf Shahid Advocate High Court CERTIFICATI i, As per instructions this is the first writ petition filed on the — before this Honourable Court remedy is provided by law. Advocate