IN THE HIGH COURT OF SINDH, KARACHI
PRESENT:
Mr. Justice Aqeel Ahmed Abbasi
Justice Mrs. Rashida Asad
C. P. No.D-1213 of 2015
S.M. Ali Zaman Gardezi & another……..……………………….Petitioners
C. P. No.D-1214 of 2015
Dr. Zulfiqar Ahmed Malik………….……..……………………….Petitioner
Versus
Federation of Pakistan & another……………….……………..Respondents
PETITIONER : Through Khawaja Shams-ul-Islam, Advocate.
RESPONDENT : Through Mr. Muhammad Khalil Dogar, Advocate.
FEDERATION : Through Mr. Muhammad Aminullah Siddiqui, Assistant Attorney General.
Date of Hearing : 25.02.2021
Date of Short Order : 25.02.2021
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Rashida Asad, J – Muhammad Iqbal Muneeb son of Muhammad Hanif, Additional Director Customs Valuation, Customs House, Karachi, S.M. Ali Zaman Gardezi son of S.A. Haider Zaman Gardezi, Secretary (Customs Tariff-III) FBR, Islamabad and Shah Faisal Sahu son of Maher Shah Muhammad Sahu, Assistant Collector, Customs/FBR the petitioners respectively in C.P. No.D-1213 of 2015 and Dr. Zulfiqar Ahmed Malik son of Muhammad Hanif Malik, Collector of Customs of Appeals at Karachi the petitioner in C.P. No.D-1214 of 2015, being civil servants of Federal Board of Revenue (FBR), have alleged harassment by the F.I.A. Authorities pursuant to Inquiry No.31 of 2013 and have also challenged the letters dated 22.08.2014, 17.09.2014, 20.02.2015 issued by the respondents No.2 (Secretary Revenue Division Ex-Officio Chairman Federal Board of Revenue, Islamabad) in purported exercise of powers under F.I.A. Act, 2014, being without jurisdiction and lawful authority and also arbitrary in nature and seek the following relief(s):-
(a) Declare that in view of the dictum laid down in the judgment dated 21.04.2014 passed by the Hon’ble Islamabad High Court reported as 2014 PTD 1531, all the enquiries, reports and actions taken or being taken up by the respondents in the matter of Amnesty Scheme introduced vide SRO No.172(I)/2013, are patently illegal, ab-initio void in gross violation of Article 201 of the Constitution of the Islamic Republic of Pakistan, 1973 as well as violating the doctrine of constructive res-judicata.
(b) Declare that the so-called enquiry and investigation being conducted by the Respondent No.4 in the shape of fishing and roving Enquiry No.31 of 2014 as well as the letters dated 22.08.2014, 17.09.2014 and 20.02.2015 are patently illegal, ultra-vires, void ab-initio, of no legal effect and in gross disobedience and violation of commands contained in Section 217 of the Customs Act, 1969 read with Article 13(a) of the Constitution read with Section 403, Cr.P.C. as well as in gross disobedience and contempt of the interim order dated 11.11.2013 and final judgment of Division Bench of the Hon’ble Islamabad High Court dated 21.04.2014 passed in I.C.A. No.950 of 2013;
(c) Declare that respondent No.4 has no lawful authority and jurisdiction under the F.I.A Act, Customs Act or F.T.O. Ordinance to start a fishing and roving Enquiry No.31 of 2013 in respect of the aforesaid Amnesty Scheme which has already been declared as valid by the Hon’ble Islamabad High Court by judgment dated 21.04.2014 passed in I.C.A No.950 of 2013;
(d) Consequently, this Hon’ble Court may further declare that the aforesaid reports of Respondents No.1 and 3 or any other individual complaint involving criminal offence on the part of certain individuals for their own benefit, cannot be made the basis for initiating the so-called Enquiry No.31 of 2013 initiated by Respondents No.4 against the petitioners;
(e) Pass order for immediate judicial and department enquiry into the conduct of respondent No.4, more particularly, in view of submissions made in paras No.25 and 26 of the body of the petition, where after, this Hon’ble Court may further be pleased to pass order directing the respondents No.2(b) for removal of respondent No.4 from the service of FIA;
(f) Mandatory injunction suspending the operation of the impugned letters of respondent No.4 dated 22.08.2014, 17.09.2014 and 20.02.2015 as well as so-called Enquiry No.31 of 2013 initiated by respondent No.4 in the matter of Amnesty Scheme in question, as well as the consequent proceedings against the petitioners be suspended;
(g) Grant permanent injunction restrain all the respondents, specially the respondent No.4, their employees, investigators, subordinates, agents, representatives, attorneys, successors or any one claiming on their behalf, from collecting the records or interfering into the adjudication matter of Amnesty Scheme in question, as well as from taking any coercive action, including but not limited to prosecution or conduct any further enquiry and investigation against the petitioner in respect of the Amnesty Scheme in question, not to visit the office of the petitioners, as well as not to harass or arrest the petitioners;
(h) Consequential relief(s), which this Hon’ble Court deems fit and proper under the circumstances of the case may kindly be passed;
(i) Grant any other relief(s), which this Hon’ble Court deems fit and proper under the circumstances of the case;
(j) Costs of the petition.
2. Precisely, the facts leading to file instant petitions are that the aggrieved petitioners are the employees of Federal Board of Revenue and serving as officers of Customs Department posted at Karachi. On 05.03.2013, respondent No.2(i) (Secretary (Revenue Division Ex-Officio Chairman Federal Board of Revenue, Islamabad), after taking permission as well as with the consultation of Minister of Finance, Revenue, Economic Affairs, Statistics and Pharming and Development notified the Amnesty Scheme vide SRO No.172(I)/2013 (“SRO”) for regularization of smuggled vehicles, which were seized by the Customs Authorities. Pursuant to the aforesaid SRO, seized smuggled vehicles were released by the relevant department. During existence and enforcement of Amnesty Scheme, the petitioners were posted in MCC Appraisement, Customs House, Karachi, whereby they were assigned the job for adjudication of cases under the Customs Act, 1969, for regularization of smuggled vehicles under the said Amnesty. Thereafter, time to time different further SROs were issued by the respondent No.2(i) for effective implementation of the aforesaid SRO and to devise certain methods and mechanism. On 08.03.2013, respondent No.1(i) addressed a letter to all the Collectorates of Customs throughout Pakistan including the Director General Intelligence and Investigation, FBR, Islamabad, regarding implementation of the aforesaid SRO and provided guidelines to address queries made by the different Collectorates. On the same date, a further notification vide SRO No.185/13 was also issued, slight substitutions and amendments in sub-paras (iii) and (iv) of SRO. Thereafter, on 13.03.2013, respondent No.1(i) also issued instructions with regard to SRO to all the Collectorates and issued office orders providing detailed mechanism to be observed by the different Collectorates of Pakistan Customs throughout Pakistan for examination, issuance of NOC, adjudication, assessment and requirement of affidavits.
3. It is pertinent to note that petitioner no.1 in C.P. No.D-1213 of 2015 has expired during the course of proceedings on 16.07.2020 and copy of such Notification dated 22.07.2020 issued by Government of Pakistan (Revenue Division) Federal Board of Revenue is on record.
4. Khawaja Shams-ul-Islam, Learned Counsel for petitioners contended that the petitioners strictly and rigorously followed the aforesaid principles, rules, laws and regulations for implementation of the aforesaid SRO, which was time to time amended and there was no complaint at all from any quarter. Rather on 14.06.2013, the respondent No.1(i) rewarded the petitioners with cash awards for their meritorious services and performance. Through Amnesty Scheme, thousands of vehicles of all nature were regularized and cleared and by recovery of duties, taxes, penalties huge revenue was collected in the government exchequer by the respondent No.1(i) after successful implementation of aforesaid SRO. Besides, the provincial governments also collected huge revenue by registration of vehicles regularized through the said SRO. However, some disgruntle and frustrated officers in the government found it a golden opportunity to start mudslinging and maligning the aforesaid Amnesty Scheme introduced by the SRO, and they became a tool in the hands of local car assemblers, who with the collusion of many others devised a well knitted conspiracy against the Federation of Pakistan and respondent No.1(i) by putting forward a person namely, Khawaja Saad Saleem, who filed Writ Petition No.1476 of 2013 before the Islamabad High Court against FBR as well as Federation of Pakistan. Consequently, vide judgment dated 19.06.2013, learned Single Judge of Islamabad High Court allowed the aforesaid petition. Thereafter, being aggrieved and dissatisfied with the aforesaid judgment dated 19.06.2013, FBR filed Intra Court Appeal No.950 of 2013 before the Divisional Bench of Islamabad High Court which appeal was allowed vide judgment dated 21.04.2014 setting aside the judgment passed by the learned Single Judge on 19.06.2013 with further declaration that SRO No.172(I) of 2013 was validly and legally issued and Amnesty Scheme was neither discriminatory nor illegal. In the meanwhile, respondent No.2 (FIA) also without any lawful authority and jurisdiction under the FIA Act, 1974, and under the Customs Act, 1969 have initiated Inquiry No.31 of 2013 in the matter of Amnesty Scheme and in this regard, petitioners received letters dated 22.08.2014, 17.09.2014 and 20.02.2015 from the Directors FIA. It is further contended that the controversy agitated through instant petitions is fully covered by recent judgments of this Court in the cases of Universal Cables Industries Limited v. Federation of Pakistan and others reported as PLD 2020 Sindh 601, Wali Muhammad Shaikh v. Federation of Pakistan and others reported as SBLR 2019 Sindh 205 and Dr. Ashfaq Ahmed Tunio and others v. FIA and others reported as SBLR 2019 Sindh 1, therefore, requests that instant petitions may be allowed in similar terms.
5. Mr. Muhammad Khalil Dogar, Learned Counsel for the respondents, while confronted with above position as stated by learned Counsel for petitioners, has candidly submitted that the controversy agitated through instant petitions appears to be covered by aforesaid judgments, however, respondents have been proceeded against the petitioners in these cases on the directions of Federal Tax Ombudsman, therefore, there is no malafide on the part of respondents.
6. Mr. Muhammad Aminullah Siddiqui, learned Assistant Attorney General has expressed similar views as stated by the learned Counsel for the respondents.
7. We have heard the learned counsel for the parties at a considerable length and have gone through the documents.
8. It is contended on behalf of the petitioners that controversy agitated through instant petitions is fully covered by above referred judgments of High Court in cases of Universal Cables Industries Limited v Federation of Pakistan and others reported as PLD 2020 Sindh 601, Wali Muhammad Shaikh v. Federation of Pakistan and others reported as SBLR 2019 Sindh. Learned Counsel for Petitioners requested that Petitions may be allowed in similar terms. Learned Counsel for the respondents on being confronted with such position, as stated by the learned Counsel for the petitioners, has candidly submitted that the controversy agitated through instant petitions appears to be covered by aforesaid judgments, however, respondents have proceeded against the petitioners in these cases on the direction of Federal Tax Ombudsman, therefore, there is no mala fide on part of respondents. Similar views have been expressed by the learned Assistant Attorney General.
9. The inquiry initiated by the FIA in the instant case and the suo motu proceedings by the Federal Tax Ombudsman have been initiated inspite of the fact that the validity of amnesty scheme in respect of the subject vehicles and legality of the SROs, including SROs 172(I) and 185(I) of 2013, issued in this regard by the Federal Government was sub-judice before Islamabad High Court in Writ Petition No.1476 of 2013, which was decided vide judgment dated 19.06.2013, whereafter, Intra Court Appeal No.950 of 2013 was filed before a Divisional Bench of Islamabad High Court, who vide its judgment dated 21.04.2014 was pleased to declare that the subject SROs were validly issued and the amnesty scheme was neither discriminatory nor illegal. It further appears that the allegations against the petitioners do not fall within the offences as scheduled in the FIA Act, 1974, whereas, nothing has been produced to show that prior permission was obtained from the relevant authorities for initiating the proceedings against the petitioners as required under the Federal Investigation Agency (Inquiries & Investigations) Rules, 2002. No material whatsoever has been produced by the respondents, which could suggest that the petitioners have violated the provisions of the Customs Act, 1969, or acted beyond the aforesaid SROs issued by the Federal Government for implementation of amnesty scheme, nor it has been shown that the petitioners have misused and abused the process of law for illegal gains.
10. From perusal of the comments filed on behalf of FIA and submissions of their learned counsel, it has transpired that the FIA has merely acted on the directions of the Federal Tax Ombudsman, without having any material or evidence against the petitioners, and started a fishing and roving inquiry against them as per directions of the Federal Tax Ombudsman. It is surprising to note that the Federal Tax Ombudsman in the instant matter in a purported exercise of suo motu jurisdiction, while placing reliance on some portions of the investigation report on smuggled vehicles relating to Amnesty Scheme 2013, without issuing any notice to the petitioners for seeking their explanation with regard to the allegations as contained in the report, drawn adverse inference against the petitioners and issued directions to the FIA for initiating the inquiry. There is no cavil to the proposition that the Courts while exercising the Constitutional jurisdiction may abstain from granting any stay against an inquiry initiated by the competent authority against a public functionary; provided such inquiry has been initiated in accordance with law and relevant rules by the competent authority after complying with all codal formalities. However, if there is an allegation of malafide and abuse of the process of law, and even the jurisdiction to initiate such inquiry by such authority is under challenge, then the Courts are under legal obligations to examine, as to whether the very initiation of inquiry against an aggrieved person does not suffer from any jurisdictional defect, and has been initiated in accordance with law and the relevant rules after complying with all codal formalities and there is no element of malafide or violation of principles of natural justice. The validity of amnesty scheme and the relevant SROs as well as its implementation by the Customs Authorities was subject matter before a Divisional Bench of Islamabad High Court, who through its judgment dated 21.04.2014 passed in Intra Court Appeal No.950/2013 was pleased to decide all the factual and legal aspects involved in the matter. We are of the opinion that once the matter is sub-judice before the competent Court of jurisdiction, no other Court or authority, including FIA or for that purpose Federal Tax Ombudsman, can initiate any duplicate proceedings in respect of the same subject matter, as it will amount to showing disrespect to the Court proceedings at the one hand and it will also tantamount to double jeopardy and multiplicity of proceedings on the other hand. Moreover, for the purposes of implementation of Tax Law, including Income Tax Ordinance, 2001, Sales Tax Act, 1990 and the Customs Act, 1969, complete mechanism and hierarchy is provided for the purposes of assessment and adjudication of tax liability through quasi-judicial proceedings. Whereas, in case of any dispute, forum of an appeal before the Commissioner/Collector (Appeals) and 2nd appeal before the Appellate Tribunal specially constituted for the purposes of deciding all factual and legal controversies relating to all Tax Law, Rules and Regulations, SROs, etc. have been provided by the Legislature. In addition to above appellate forums, reference jurisdiction is also available before the respective High Courts and, thereafter, eventually the leave to appeal can be filed before the Hon’ble Supreme Court of Pakistan for final adjudication of proceedings under the Tax Law. Learned counsel for the respondents have not been able to justify, as to how the matters pertaining to the Customs Act, 1969 and the quasi-judicial orders passed by the Tax Authorities in the instant matter which was subject to scrutiny by Islamabad High Court, could be taken cognizance by the FIA Authorities under a purported inquiry initiated on the directions issued by the Federal Tax Ombudsman in the suo motu exercise/jurisdiction. More particularly, when such authority is not even vested in the Federal Tax Ombudsman to examine the validity or otherwise of any order of assessment or adjudication passed by the Tax Authorities. Whereas, in terms of Section 9 of the Federal Ombudsman Ordinance, 2000, only a complaint of mal administration by the Tax Authority, can be the subject matter of scrutiny by the Federal Tax Ombudsman, whereas, notice is required to be issued to the person against whom action has to be taken under Section 10 of the Federal Ombudsman Ordinance, 2000, however, in the instant case, no such legal procedure has been adopted by the respondents. Reliance in this regard can be placed in the case of SYED NUSRAT NASIR v. FEDERATION OF PAKISTAN THROUGH SECRETARY AND 3 OTHERS (2013 PTD 486), wherein it has been held as under: -
“9. From perusal of the provisions of subsection (1) of section 9, it is seen that the Federal Tax Ombudsman acquires jurisdiction under the Ordinance on a complaint by any aggrieved person, or on a reference by the President, the Senate or the National Assembly, as the case may be, or on a motion of the Supreme Court or a High Court made during the course of any proceedings before it or of his own motion, to investigate any allegation of maladministration on the part of the Revenue Division or any Tax Employee. From perusal of subsection (2) of section 9, it is seen that the assumption of jurisdiction by the Federal Tax Ombudsman under subsection (1) is subject to provision of subsection (2) of section 9, which oust the jurisdiction of the Federal Tax Ombudsman to investigate or inquire into matters, which are subjudiced before a court of competent jurisdiction or tribunal or board or authority on the date of receipt of a complaint, reference or motion by him. Similarly, Federal Tax Ombudsman has no jurisdiction to investigate or inquire into matters, which relate to assessment of income or wealth, determination of liability of tax or duty, classification or valuation of goods, interpretation of law, rules and regulations relating to such assessment, determination, classification or valuation in respect of which legal remedies of appeal, review or revision are available under the relevant Legislation. It has also emerged that the Federal Tax Ombudsman has the jurisdiction only to investigate any allegation of maladministration on the part of the Revenue Division or any Tax Employee, which means that unless there is any allegation of maladministration on the part of the Revenue Division or any Tax Employee, no decision, finding or recommendation can be made by the Federal Tax Ombudsman under the Federal Tax Ombudsman Ordinance, 2000. In the instant matter, admittedly, no complaint of maladministration against the petitioner was filed by an aggrieved person nor any reference against the petitioner by the President, the Senate or the National Assembly was made. Neither any motion of the Supreme Court or a High Court was made during the course of any proceedings before it. Even no proceedings of his own motion against the petitioner were initiated by the Federal Tax Ombudsman in the instant matter as evident from the impugned order passed by him. After having examined the facts of the instant case and the provisions of section 9 of the Federal Tax Ombudsman Ordinance, 2000 relating to jurisdiction, functions and powers of the Federal Tax Ombudsman, we are of the considered view that the recommendations made by the Federal Tax Ombudsman against the petitioner in the instant case were corum non judice, without jurisdiction, hence of no legal effect on this account alone.
10. We have further noted that the Federal Tax Ombudsman, while making recommendations against the petitioner for initiation of proceedings under Removal from Service (Special Powers) Ordinance, 2000, besides wrongful assumption of jurisdiction against the petitioner, has also not followed the procedure as laid down under section 10 of the Federal Tax Ombudsman Ordinance, 2000. It will be advantageous to reproduce the relevant provisions of subsection (4) and subsection (6) of section 10, which are attracted to the facts of the instant petition.
"(4) When the Federal Tax Ombudsman proposes to conduct an investigation he shall issue to the Secretary of the Revenue Division, and to the person who is alleged in the complaint to have taken or authorized the action complained of, a notice calling upon him to reply to the allegations contained in the complaint.
(6) A person shall be entitled to appear in person or be represented before the Federal Tax Ombudsman."
11. From perusal of hereinabove provisions, it is clear that even if it is presumed that through impugned order the learned Federal Tax Ombudsman wanted to assume jurisdiction against the petitioner on his own motion (though in the absence of any complaint of maladministration against the petitioner) he was required to conduct an investigation and to issue a notice to the petitioner calling upon him to reply to the allegations whereafter the petitioner was entitled to appear in person or through a representative before the Federal Tax Ombudsman to rebut the allegations and further to explain his position with regard to allegations against him. Admittedly, no notice was issued to the petitioner nor any opportunity was provided to him before making the impugned recommendations against the petitioner in the instant case, which is not only the violation of the legal procedure provided under the Federal Tax Ombudsman Ordinance, 2000, but also negates the principles of Natural justice, which entitles a person for a fair trial and a reasonable opportunity of being heard. The decision and recommendations against the petitioner under the circumstances are liable to be set aside on this account also.”
11. The assumption or jurisdiction by the FIA has been discussed in detail in a recent judgment by the Divisional Bench of this Court in the case of UNIVERSAL CABLES INDUSTRIES LIMITED v. FEDERATION OF PAKISTAN THROUGH SECRETARY, MINISTRY OF INTERIOR, ISLAMABAD AND 3 OTHERS (PLD 2020 SINDH 601), wherein it has been held as under: -
“8. It is settled legal position that assumption of jurisdiction by any judicial, quasi-judicial or executive forum provided under the relevant laws, including the High Court(s) and the Supreme Court established under the Constitutional provisions, is the primary concern of such forum, and unless, the jurisdiction to proceed with the matter is conferred in clear and unambitious language to such forum under the relevant laws, cognizance of the matter cannot be taken for want of jurisdiction. Extra caution and care is exercised even by Superior Courts in respect of issues relating to jurisdiction. However, it has been observed that such due care and caution is not exercised by the executive forums, more particularly, the Federal and Provincial investigating agencies while initiating inquiry and investigation or taking cognizance of a complaint without examining as to whether alleged offence falls within the ambit of Schedule attached to FIA Act, 1974. Jurisdiction upon a Court. Tribunal or Administrative Authority is conferred by law in clear and unambiguous words for taking cognizance and to decide the legal and factual disputes in accordance with law, so that there shall be no ambiguity between the litigant parties to approach such forum for resolution of dispute. Any decision even by a Court of law, or by the highest executive authority becomes redundant if it suffers from the jurisdiction defect. Similarly, Notifications, Orders, Circulars and Memorandum, if issued, without lawful authority or suffer from some jurisdictional defect, the same can be struck down by the Courts on this ground alone. However, it is unfortunate to observe that this substantial legal issue relating to assumption of jurisdiction which goes to the very root of proceedings, either does not attract the attention or is deliberately ignored by the executive authorities, more particularly, the Federal and Provincial Investigating Agencies, including FIA as in the instant case, wherein, without following the legal requirements in terms of Section 3 of the FIA Act, 1974 or the procedure provided under Rule 5 of (Inquiries and Investigation) Rules, 2002, a frivolous inquiry has been initiated with reference to the offences which do not find mention in the Schedule attached to FIA Act, 1974. Taking cognizance of matters except cognizable offences as detailed in the Schedule to the FIA Act, 1974, by the Federal Investigating Agency, not only creates anomaly and overlapping of jurisdiction in disputes to be investigated and proceeded under the relevant laws by the local Police or agencies on one hand, but also puts the litigant parties under double jeopardy in respect of same offence, which is not permissible under the law. It also reflects upon mala fide on the part of investigating agency, which prima facie lacks jurisdiction to initiate inquiry and investigation and to proceed in respect of a matter, which otherwise has to be proceeded under the relevant laws by the legal forums provided for such purpose. We are of the opinion that the FIA has no jurisdiction whatsoever in the instant case as there has been no allegation of corruption or corrupt practices by a public functionary, nor any cognizable offence covered under the FIA Act, 1974, is made out, therefore, initiation of inquiry and investigation over a dispute between private parties i.e. respondent No.4 and CEO of the petitioner Company, and the vexatious prolonged proceedings over a decade by the FIA Authority in the instant case is based on mala fide, the same are hereby quashed. Accordingly, instant petition was allowed by our short order dated 30.04.2019 and above are the reasons of the same.”
12. Similarly, the legal issue relating to jurisdiction of FIA authorities in cases involving the process of assessment and adjudication by the Tax Authorities through quasi-judicial proceedings has already been dealt with by a Divisional Bench of this Court in the case of DR. ASHFAQ AHMED TUNIO & OTHERS v. FEDERAL INVESTIGATION AGENCY & OTHERS (SBLR 2019 SINDH 1), wherein under somewhat similar circumstances the inquiry initiated by the FIA against the Tax Authorities in relation to the allegations of having issued illegal refund order has been dealt with in the following manner: -
Preamble:
“Whereas it is expedient to provide for the constitution of a Federal Investigation Agency for the investigation of certain offences committed in connection with matters concerning the Federal Government, and for matters connected therewith.”
“Sec.3” Constitution of the Agency.--- (1) Notwithstanding anything contained in any other law for the time being in force, the Federal Government may constitute an Agency to be called the Federal Investigation Agency for inquiry into, and investigation of the offences specified in the Schedule, including any attempt or conspiracy to commit, and abetment of, any such offence.
(1) The Agency shall consist of a Director-General to be appointed by the Federal Government and such number of other officers as the Federal Government may, from time to time, appoint to be members of the Agency.”
“Rule 5”
5. Initiation of inquiry and registration of criminal case.--
(1) An inquiry shall be initiated against an accused public servant specified in column (2) of table below with prior permission of the authority, specified in column (3) of that table.
TABLE
S.No Basic Pay Scale of Public Servant Authority
1 BPS 1- 12 and equivalent Deputy Director
2 BPS 13 - 17 and equivalent Director
3 BPS 18 - 19 and equivalent Director General
4 BPS 20 - 21 and equivalent Secretary
5 BPS 22 and equivalent FACC
(2) Subject to sub-rule (3), a criminal case shall be registered against an accused public servant specified in column (2) of table below with prior permission of the authority specified in column (3) of that table.
TABLE
S.No Basic Pay Scale of Public Servant Authority
1. BPS 1-12 and equivalent Director.
2. BPS 13-17 and equivalent Director General
3. BPS 18-19 and equivalent Additional Secretary
4. BPS 20-21 and equivalent Secretary
5. BPS 22 and equivalent FACC
(3) No prior permission under sub-rule (2) shall be required for registration of a case against a public servant caught as a result of the trap arranged by the Agency under the supervision of a Magistrate of the first class. In such case, a report within twenty four hours shall be of the department concerned and immediate superior of the public servant concerned.
(4) If no receipt of complaint, the competent authority decide not to initiate an inquiry or register a case it shall record reason there for.”
From perusal of preamble of FIA Act, 1974, it can be ascertained that the purpose and intention of enactment of FIA Act, 1974 is to provide for the constitution of a Federal Investigation Agency, to investigate certain offences committed in connection with matters concerning the Federal Government and for matters connected therewith. Though the preamble is not an operative part of Statute but nevertheless it does provide a useful guide for finding out the intention of the legislature and therefore, cannot be ignored while interpreting the law. Reliance in this regard can be placed in the case of Murree Brewery Co. Ltd. v. Pakistan through the Secretary to Government of Pakistan and others PLD 1972 SC 279 as well as in the case of Iftikhar Hussain and others v. Government of Pakistan 2001 P.Cr.LJ 146 and the State through Deputy Attorney General v. Muhammad Amin Haroon and 10 others 2010 P.Cr.LJ 518 Whereas, as per Section 3 of the Act, the constitution, scope and jurisdiction of FIA has been defined according to which, FIA Authorities have been empowered to conduct inquiry and investigation of the offences specified in the schedule attached to the FIA Act, 1974, including an attempt or conspiracy to commit and abetment of, in such offence. Similarly, as per Rule 5 of the FIA (Inquiries and Investigations) Rules, 2002, prior permission of competent Authority as specified in Column 3 of the table is necessary before initiating an inquiry against an accused public servant. In the instant case, the petitioners against whom the inquiry has been initiated by the respondents are officers of BPS-18 and above, therefore, before initiating any inquiry against the aforesaid petitioners prior permission of D.G. FIA was required to be obtained, however, neither in the impugned letter issued by the respondents nor in the comments or the documents placed on record during the course of hearing the respondents could demonstrate that prior permission was obtained from the Director General in the instant case. From perusal of the entries in the schedule to the Federal Investigation Agency Act, 1974, which are presently 38 in number, it can be seen that offences under the Income Tax Ordinance, 2001; Sales Tax Act, 1990; and Customs Act, 1969 have not been included in the schedule, which shows that any order passed and proceedings initiated under the aforesaid Acts, cannot be subject matter of inquiry and investigation under the FIA Act, 1974. In other words, the scrutiny of assessment proceedings, including the assessment orders under the Income Tax Ordinance, 2001; Sales Tax Act, 1990; and Customs Act, 1969 cannot be made by the FIA Authorities nor any inquiry or investigation can be initiated to examine the legality of assessment proceedings or the orders passed by the Taxation Authorities under the Income Tax Ordinance, 2001; Sales Tax Act, 1990; and Customs Act, 1969. Reliance in this regard can be placed to the reported judgment of the Hon’ble Supreme Court in the case of Director General, FIA and others v. Kamran Iqbal and others [2016 SCMR 447], wherein, it has been held as under:-
“5. Indeed, preamble to a Statute is not an operative part thereof, however, as is now well laid down that the same provides a useful guide for discovering the purpose and intention of the legislature. Reliance in this regard may be placed on, the case of Murree Brewery Company v. Limited v. Pakistan through the Secretary of Government of Pakistan and others (PLD 1972 SC 279). It is equally well established principle that while interpreting a, Statute a purposive approach should be adopted in accord with the objective of the Statute and not in derogation to the same.
6. Keeping in view the intent of the Act as spelt out from the preamble and the fact that through the Act the FIA, in terms of the schedule to the A ct has been granted jurisdiction and power to act in respect of several offences under the P.P.C. which are cognizable by the local police also, and also in order to avoid a conflict of jurisdiction, the only conclusion that the Court may draw is that for exercising jurisdiction in the matter of the offences enumerated in the schedule to the Act there has to be some nexus between the offences complained of the Federal Government or else there shall be overlapping of the jurisdiction of the local police and the FIA creating an anomalous aspect of concern is that though in terms of notification, bearing SRO 977(1)/2003, Section 489-F, P.P.C. has been made a scheduled offence under the FIA Act, but no reasonable classification has been provided for exercising such power and it is left to the discretion of the concerned officer of the FIA to exercise his authority and jurisdiction under the Act in respect of the said offence, which militates against the protection enshrined by Article 25 of the Constitution of Islamic Republic of Pakistan. If a citizen is exposed to the proceedings in respect of an offence lodged against him which could be initiated before more than one forums, a reasonable classification is the requirement of the Constitution.”
Further reliance in this regard can also be made in the case of Adamjee Insurance Company Limited v. Federal Investigation Agency (F.I.A) [2004 CLD 246].
13. Moreover, perusal of the contents of the complaint and the impugned letters issued by the FIA Authorities to the petitioners, reflects that the allegations and accusation against the petitioners, besides being vague and generalize in nature do not refer to any particular tax year, NTN Number or particulars of a taxpayer nor there has been any reference to Assets acquired by the petitioners through corruption and corrupt practices. FIA Authorities have failed to even verify the complaint and the allegations contained therein, nor have recorded the statement of the complainant inspite of considerable lapse of time. It is astonishing to note as to how, without examining the legal provisions relating to jurisdiction of FIA Authorities, ignoring the legal requirement to seek prior permission from Competent Authority and even without verifying the complaint and the allegations therein to be correct or otherwise, the impugned inquiry could be initiated against the petitioners. It is pertinent to observe that the Income Tax Ordinance, 2001; Sales Tax Act, 1990; and Customs Act, 1969 are special enactments, which provide for quasi-judicial proceedings of assessment of income tax and sales tax liability, as well as determination of customs duty through quasi-judicial orders, which are appealable before the Appellate Forums provided under the respective Statutes, which includes Reference to the High Court, as well as Appeal before the Hon’ble Supreme Court, therefore, the FIA Authorities cannot sit in judgment upon the assessment proceedings or the orders passed by the Taxation Authorities to this effect. Whereas, in terms of Section 227 of Income Tax Ordinance, 2001, Section 51 of Sales Tax Act, 1990 and Section 217 of Customs Act, 1969, even the jurisdiction of Civil Courts has been ousted. Reliance in this regard can be placed to the following cases:-
i) Kohinoor Industries Ltd. Faisalabad v. Govt. of Pakistan through Secretary, Ministry of Finance, Islamabad and others (PTCL 1994 CL 280)
ii) Play Pictures through Proprietor and 8 others v. The Central Board of Revenue through Member, Customs, Islamabad and 4 others (2000 CLC 1403)
iii) English Sweets (Pvt) Ltd. Karachi v. Pakistan through Secretary to the Government of Pakistan, Islamabad and 3 others (2005 PTD 247)
iv) Raj Muhammad Khan and others v. Muhammad Farooq Khan and other (1998 SCMR 699)
14. While applying the ratio of above judgments to the facts of the instant case, it is clear that the very initiation of the inquiry by the FIA Authorities against the petitioners was without lawful authority and based on malafides, whereas, respondents did not comply with legal requirements, which includes verification of complaint and the allegations contained therein, and prior permission of the Competent Authority to initiate any inquiry. In the absence of any material, FIA Authorities cannot be allowed to carry out any fishing and roving inquiry or investigation against a public servant. Reference in this regard can be made to the following cases:-
i) Director General, F.I.A. and others v. Kamran Iqbal and others (2016 SCMR 447)
ii) Assistant Director, Intelligence and Investigation, Karachi v. M/s B.R. Herman and others (PLD 1992 SC 485)
iii) Muhammad Irshad Khan v. Chairman, National Accountability Bureau and 2 others (2007 PCr.L.J 1957)
iv) Ghulam Sarwar Zardari v. Piyar Ali alias Piyaro and another (2010 SCMR 624)
15. In view of hereinabove facts and circumstances of the instant case, we are of the considered opinion that the impugned Notices issued by the FIA Authorities and the inquiry and investigation initiated against the petitioners, pursuant to a purported complaint, are without jurisdiction and lawful authority, and also based on malafides, hence liable to be quashed. Accordingly, vide our short order dated 28.02.2018, instant petition was allowed alongwith listed applications and above are the reasons of such short order.”
13. In view of hereinabove facts and circumstances of the instant cases, we are of the opinion that the inquiry initiated by the FIA on the directions issued by the Federal Tax Ombudsman in purported suo motu jurisdiction in violation of Sections 9 and 10 of the Federal Ombudsman Ordinance, 2000, without even issuing Notices to the petitioners in the instant cases, particularly while ignoring the decision of the Divisional Bench of Islamabad High Court, was illegal and without jurisdiction, therefore, vide our short order dated 25.02.2021 instant Petitions were allowed in the following terms: -
“Learned Counsel for the petitioners has filed written synopsis/arguments along with case laws, whereas, learned Counsel for the respondents submits that he would rely on the comments filed on behalf of respondents. Learned Counsel for the petitioners submits that controversy agitated through instant petitions is fully covered by recent judgments of this Court in the cases of Universal Cables Industries Limited v. Federation of Pakistan and others reported as PLD 2020 Sindh 601, Wali Muhammad Shaikh v. Federation of Pakistan and others reported as SBLR 2019 Sindh 205 and Dr. Ashfaq Ahmed Tunio and others v. FIA and others reported as SBLR 2019 Sindh 1, therefore, requests that instant petitions may be allowed in similar terms. Learned Counsel for the respondents while confronted with above position as stated by learned Counsel for petitioners, has candidly submitted that the controversy agitated through instant petitions appears to be covered by aforesaid judgments, however, respondents have been proceeded against the petitioners in these cases on the directions of Federal Tax Ombudsman, therefore, there is no malafide on the part of respondents. Similar views have been expressed by learned Assistant Attorney General.
In view of such candid statements, while placing reliance on the above cited judgments, and for the reasons to be recorded later on, instant petitions are allowed along with listed application(s).”
14. These are the reasons of the said short order.
J U D G E
J U D G E
Faizan-PA