Due to developments favourable to the appeal, after its filing, not caused or helped by the filer, it cannot be proceeded with. The appeal will be a success also because of no-contest against the same by the state. The law does not provide relief to the one aspiring to contest an appeal in these circumstances. The issue is: whether events like the ones cited can, as a matter of course, relegate the appellant to an adverse position. With the lower authority’s order being ‘sine die’, not ever to surface, due to expiry of the period during which it could be proceeded against, there can be no impact on the case. The next point is what would happen to corpse of the appeal. What use of its flesh can be? It should be ‘where it is’, the finding would be. The appeal would be a success by way of grant of his prayers in the face of the law, with the defendant having been reduced to ‘lame-duck’ by the course of events.
Inter alia, following canons of interpretation should be kept in view when one gets into the exercise of interpretation of law on the subject:
1. Purpose of the relevant legal provision.
2. Close and conservative adherence to the literal and textual interpretation of law.
3. Benevolent construction of public welfare legislations with eye on the relationship between weaker and stronger parties.
4. Intentions of the legislature to be found and respected. Strict and liberal construction for ascertaining the legislature’s intents.
5. The statute as a whole kept in view.
6. Strict interpretation of provisions relating to curbs on jurisdiction of the court/appellant authority.
7. Words of the statutes to be taken on their ordinary meaning.
8. Unless warranted otherwise, wider meanings not to be given.
9. Grammatical sense of the words to be adhered to.
Clear message of the statute should be gone into. To be administered is the law as we find it. Then finding had through the construction ought to prevail unless there be strong reasons so not to do.
The very concept of interpretation connotes induction of the ways which are not extrinsic to words in the statute. A court has to give effect to the intention of the legislature. No interpreter is to be called to question the same. “…… it is not open to the courts to put their own gloss in order to squeeze not some meaning which is not borne out by the language of the law”.
In terms of the words appearing against following questions, the Supreme Court of Pakistan in Commissioner of Income Tax Legal Division, Lahore etc vs. Khalid Ahmed etc. in (2016) 113 TAX 369, has answered:
(1) Whether it is well settled that strict and liberal approach is to be adopted while interpreting fiscal or taxing statutes and that Court cannot read into or impute something when provisions of taxing statutes are clear. Held Yes
(2) Whether fiscal statutes are generally to be interpreted strictly, without imputing anything that is not manifest from express wording of such statute. Held Yes
(3) Whether where enactment uses a term which has both ordinary and technical meaning, question as to which meaning the “term” is intended is to be determined by context.
Held Yes
(4) Whether if context is technical, presumption is that technical meaning of term is intended to be used, otherwise ordinary meaning is taken.
Held Yes
– Monthly “Taxation”, May-2016 (Pages # 372-373).
The doctrines of interpretation, in their fold, have the principles of noscit a soc and ejusdem generic. Brooms says:
“In the construction of statutes, likewise, the rule noscitur a sociis is frequently applied, the meaning of a word, and, consequently, the intention of the legislature being ascertained by reference to the context, and by considering whether the words in question and the surrounding words are, in fact, ejusdem generis are referable to the same subject matter’. Especially must it be remembered that the sense and meaning of the law can be collected only by comparing one part with another and by viewing all the parts together as one whole, and not one part only by itself.” – Lincoln College case, 3 Rep. 58 b, at 59 b. “Broom’s Legal Maxims” (10th Edition)
According to ‘NS Bindra’s Interpretation of Statutes’ (9th Edition) the words of Lord Asquith are:
“The statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs.”
The adjudication fora must get intentions of the legislature through going over entire scope of the statute. Not only words of the legislature should be looked at, what cannot be overlooked is that intended benefit to the populace has to be focused. Likely damage, caused by branding a statute as directory when it could also be viewed ‘mandatory’, should be gone into. An absolute enactment or mandatory law has to be exactly obeyed. Substantial obedience may not be sufficient even when the law is apparently directory.
Maxwell, in his Interpretation of Statutes, holds: “It my, perhaps, be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is, in the main, governed by considerations of convenience and justice, and when that result would involve general inconvenience or injustice to innocent persons, or advantage to those guilty of the neglect, without promoting the real aim and object of the enactment, such an intention is not to be attributed to the legislature. The whole scope and purpose of the statute under consideration must be regarded”.
The Customs Appellate Tribunal, in Babar Waheed vs. Federation of Pakistan etc in Customs Appeal No K-286 of 2008 stressed: “… proper place of procedure in any system of administration of justice is to help and not to thwart the grant to the people of their rights. All technicalities have to be avoided unless it be essential to comply with them on grounds of Public Policy.”
The rechristening of a mandatory provision into ‘directory’ by reading the word ‘shall’ as ‘may’, inflicts a deadly blow to the appellant’s case, which the law does not always permit.
In the indicated treatise, Maxwell also holds: “the whole aim and object of the legislature would be plainly defeated, if the command to do the thing in a particular manner did not imply a prohibition to do it in any other, no doubt can be entertained as to the intention”.
Whether a statute should be termed mandatory or directory would depend upon the larger aspect of public interest. In a case in which a prohibition was enacted, the doing of the prohibited thing is ultra vires and illegal if done. It also follow that the same was done without jurisdiction. Thus an order passed after the date of expiry of the period allowed by the tax laws will be without jurisdiction, coram non judice, hence ultra vires.
The provisions of Federal Excise, Income Tax, Sales & Customs Laws quoted hereinbefore have the word “shall” with reference to the time frame available to the adjudicating authority for decision of the case before it.
There may be situations when the word “shall” could be read “may”. Situation in which words “shall” may be read as “may” in the cited sections of the tax laws could be found ‘wanting’. These do not exist in reference to the tax laws under reference. The indicated circumvention to make-up for default of the adjudicating authority or the state is not permissible under the law.
Plea taken for circumvention is in the assumption that cited provisions in the statute are not mandatory. These are directory. Accordingly, to allow the defaulting authority to proceed on this assumption and give its verdict on a dispute before it, after expiry of the time made available, is travel in opposition to the law. Overlooked is the cannon of interpretation that an assumption to re-christen or bring back jurisdiction lost is not tenable in law because it would mean giving life to a corpse in disregard of the rule that it is only God to give back life. Under the law, only a law can give back life to a dead. Such a law has to be explicit, not by way of inference, assumption or deduction.
To convert the word “shall” in the tax laws, under discussion, into “may”, there has to be clear enabling provision in the statute. Even if that be in hand, such expression will have to undergo the drill provided in the grammar for interpretation of statutes. There is a system, a course, providing the rules of business, referred as ‘canons of interpretation’, briefly cited heretofore. The cannons do not give an open licence to interpret the way one would like to. These canons forbid to travel in the ‘lane to conversion’ from mandatory to directory or vice versa as a matter of convenience. In view of the rules of interpretation described hereinbefore, the adjudicators may not find it very convenient to ‘baptize’ the subject law provisions ‘directory’.
No doubt that a court can read the word “shall” as “may” and vice versa. Thereafter the so tailored text has to go to the rigor of rules for interpretation of statutes to find what finally emerges from such discerning. A court may not be doing well in replacement of “may” for “shall” without giving rationale for this and simultaneously winking at rules for interpretation.
In our judicial system the last word in matters having ado with law is the Supreme Court. The Court puts at rest all legal controversies. The highest authority to determine maladministration in tax recovery or its system is Federal Tax Ombudsman (FTO). His findings, not exactly being judicial pronouncements, are final words in that sphere. Representations against his verdicts lie with President of Pakistan who is last word in the land. Scrutiny of the FTO’s conclusions, in case of representations to the President, is structured by the treasure of legal brains in the governmental system, which is delivered through the Law Ministry. The Law Ministry also delivers President’s words in relation to his summations in respect of representation agitating against FTO’s dispensation.
There is no travel of the judicial machinery/process beyond Supreme Court & the FTO.
In the case of Pace International vs. Secretary Revenue Division, Islamabad, complaint No 805 of 2003 before the Federal Tax Ombudsman, findings included that the order in original was time barred.
The show cause notice was received by the complainant on 10-06-2002. Order in original was received on 13-05-2003, after around 11 months of issue of the notice. Respondent pleaded that the order in original could be agitated against before the Collector of Sales Tax (Appeals). Since the complainant had not exhausted the channels available under the law, complaint to FTO was premature. Other relevant facts of the case were that nobody had appeared from the side of the complainant before the Collector (Adjudication), Rawalpindi, who decided the matter ex parte after hearing the detecting officer on 13-05-2003.
Departmental arguments were that a contravention case was framed against the complainant for claiming wrong input and suppression of sales. Contentions of the complainant were that he was not given sufficient time before audit and was not intimated of the record to be produced for audit. These pleadings of the tax payer, the FTO did not find correct.
Representatives of both sides were heard by the FTO and relevant record examined. FTO found contention of the appellant correct and tenable to the effect that order in original passed by the Deputy Collector (Adjudication) was time barred. “In the instant case show cause notice was issued on 10-06-2002 and order in original was passed on 13-05-2003 after about 11 months of the issuance of notice which is clearly hit by time limitation as provided in law”, FTO’s finding was. FTO desired: “the competent authority to cancel the order in original dated 13-05-2003”.
Against FTO’s finding, CBR (now FBR) represented to the President of Pakistan. The President rejected contention of CBR.
In this connection, the Law, Justice & Human Rights Division, Government of Pakistan, vide its letter No 185/2004/FTO-Law dated 07-05-2005 to the Secretary (TO-II), CBR, Islamabad (PTCL 2005 CL. 841), ruled:
“The department contends that the time limit under section 36(3)* ibid was merely directory and not mandatory. The contention does not seem to be valid. Where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen the prescription of time is deemed directory but where a public functionary is empowered to create liability against a citizen only within the prescribed time it is mandatory. The FTO’s decision must be sustained.”
— since repealed. At the time of repeal it read:
“Provided that order under this section shall be made within one hundred and twenty days of issuance of show cause notice or within such extended period as the Commissioner may, for reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed sixty days.”
FTO’s finding is final adjudication of the disputes relating to Sales Tax, Federal Excise Duty, Income Tax and Customs. Appeal does not lie to a court against FTO’s findings. The affected parties can, however, appeal to the President of Pakistan against words of the FTO.
The above, being (deductive) law of the land, the offenders can be brought to book in terms of the conventional and regular judicial system.
As stated hereinabove, petitions against FTO’s findings are decided by the President. Formal communications in respect of petitions to the President against FTO’s orders are made by the Ministry of Law.
No appeal lies with reference to such communication.
Qaisar Mufti, "Jurisdiction lost with passage of time – II," Business Recorder. 2016-07-31.Keywords: Law and Humanities , Public welfare , Technical assistance , Oral interpretation , Competent authority , Government communication systems , Pakistan , CBR , FBR , FTO , Tax