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Civil Petitions Nos. 374 and 375 of 1978, decided on 15th March 1980.

(On appeal from the judgment and order dated 24th May 1978 of the Lahore High Court in T. Rs. Nos. 163 and 164 of 1972).

‑‑ S. 10(3)‑Income‑tax‑Correction of Returns and False Declaration Regulation [C. M. L. A.'s 32 of 1968)] and Circular No. M L R 1/69 [as amended by Circular No. M L R 3/69], para. 5, cl. (a) and para. 15, cl. (b)‑Sales tax return‑High Court considering question at considerable length and finding petitioner's case fully covered causes by para. 5, cl. (a) of Circular No. M L R 1/69 View taken by High Court not shown to be incorrect ; Assessee's sales tax return, held, rightly accepted.

Abdul Haque, Advocate Supreme Court, Riazul Haq, Advocate Supreme Court and Iftikharuddin Ahmad, Advocate‑on‑Record for Petitioner.

Nemo for Respondent.

Date of hearing: 15th March 1980.

.‑These petitions are directed against the order dated 7‑5‑1978 passed by the High Court, Lahore, delivered in Tax References Nos, 163 and 164 of 1972, whereby the High Court agreed with the Income‑tax Appellate Tribunal.

The facts briefly stated are that respondent is an assessee‑respondent under the Sales Tax Act, 1951. For the assessment year 1964‑65, it filed a Nil return. In respect of the assessment years 1962‑63 to 1968‑69 it had filed a statement of suppressed income under Martial Law Regulation No. 32 as Nil. The case was pressed by the Martial Law Team and in agreement with the respondent fixed his suppressed income at Rs. 56.000 on 18‑12‑1969. This amount, it may be mentioned, was assessed under the Income‑tax Act because the respondent claimed not to have been a manufacturer under the Sales Tax Act during the aforesaid period of seven years. However, as for the assessment year 1964‑65, the Sales Tax Officer by order dated. 2‑6‑1970 assessed the respondent under section 10(3) of the Sales Tax Act and rejected its plea that the case was covered by the proceedings taken under the Martial Law Regulation No. 32, referred to above. In coming to the above conclusion the benefit of para. 5 clause (a) of the Circular No. M L R 1/69 as amended by Circular No. M L R 3/69 was not given on the ground that the said benefit was available only to the new assessee and not to those who had been assessed to such tax in earlier years. On appeal, however, the Income‑tax Appellants Tribunal reversed the order and extended the benefit of clause (a) of para. 3 of the Circular to the assessment in dispute, by its order dated 14‑12‑1971.

Aggrieved thereby, the, Department got the following question of law referred to the High Court, Lahore, namely:‑

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee's Sales Tax returns should be accepted in view of the Board's Circular No. M. L. R. 1 of 1959 as amended by Circular No. M. L. R. 3 of 1969 "

The High Court by its judgment dated 7‑3‑1978 answered the above question in the affirmative. Hence this petition for leave to appeal.

In support of this petition, it is urged that the learned Judges in hold in proceedings taken under Martial Law Regulation No. 32 which culminated in the order dated 18‑12‑1969 covered this case was in error.

We find that this question was discussed by the High Court at considerable length and it was found that the case of the petitioner was fully covered b clause (a), of para. 5 of the circular in question.

"15 (b).‑If in the light of the wealth statement, personal expenses and other relevant facts, the returns/revised rents or the consolidated state ment are not .found acceptable by the Department, assessments on higher amounts would be made in agreement with the assessee."

Sh. Abdul Haque, who appeared for the Department before us, was unable to show that the view taken by the High Court is not correct.

This petition, therefore, fails and is dismissed hereby.

Appeal dismissed.

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