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Civil Petitions for Special Leave to Appeal Nos. 392, 393 and 394 of 1972, decided on 10th July 1973.
(On appeals from the orders of the Lahore High Court, Lahore, dated 4‑7‑1972 in C. M. 45/Com./72/C. M. 46/Com./72/C. M. 47/Com./72 respectively).
‑‑ S. 17(7)‑Stay of recovery of tax pending decision on reference to High Court under S. 17 of Act III of 1951‑Argument that recovery would impose unbearable financial burden on petitioner and put enterprise into serious jeopardy‑Not maintainable in view of clear provisions of S. 17(7).
Mian Nusratullah, Advocate Supreme Court instructed by Sh. Ijaz Ali, Advocate‑on‑Record for Petitioner (in all the three Petitions).
Abdul Haq, Senior Advocate Supreme Court instructed by Iftikhar‑ud -Din Ahmad, Advocate‑on‑Record for Respondent (in all the three Petitions).
Date of hearing : 10th July 1973.
These three petitions are from three orders of a Division Bench of the Lahore High Court, each dated 4‑7‑1972, refusing to stay the recovery of sales tax assessed on the business and sale of certain goods by the petitioner under Sales Tax Act, 1951 (Act III of 1951).
The petitioner is a commercial enterprise of the Provincial Government wherein rosin and turpentine are manufactured and marked for sale. The Sales Tax Officer, Companies Circle III, Lahore, assessed the petitioner to sales tax in the sum of Rs.5,83,985 for the years 1962‑63, 1963‑64 and 1964‑65 each, despite the petitioner's objection that its business was exempt from the payment of sales tae in view of the provisions of Article 137 of the 19,,2 Constitution. The petitioner's appeals to the Assistant Commissioner Income‑tax and the Income‑tax Tribunal having failed, three references under section 17 of the Act have been admitted by the High Court to determine the question of law:‑
"Whether in the facts and circumstances of the case, the Income‑tax Appellate Tribunal was justified in holding that the sales effected within its own territories of goods manufactured and produced by the Provincial Government were liable to assessment under Sales Tax Act, 1951."
It appears that in the meantime the Income‑tax department threatened to initiate proceedings for the recovery of the demand. This obliged the petitioner to apply under section 151, Civil Procedure Code, read with Article 201 of the Interim Constitution in each case praying for the stay of recovery of the demand pending decision in the reference. The prayer was refused by the High Court on the ground that Article 201 of the Interim Constitution had no application and that subsection (7) of section 17 of the Act provides that notwithstanding any reference to the High Court under the said section "tax shall be payable in accordance with the assessment made fn the case."
Learned counsel for the petitioner argued in support of the petition that the recovery of the tax assessed in respect of each assessment year will impose unbearable financial burden on the petitioner putting the enterprise 4 into serious jeopardy. Because of the clear provisions of subsection (7) of section 17 of the Act, this argument cannot be of any avail and no valid objection can be taken against the order of the High Court in each case.
The petitions are, therefore, dismissed.
Petitions dismissed,
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