Summary: 1. It is a settled principle of law that when it comes to imposition of major penalty and that too of removal from service on the charge of misconduct, then the accusation are to be proved beyond reasonable doubt and the conclusion of guilt based upon inferences and hearsay is not permissible. 2. To dismiss a civil servant or for that matter, any employee on a charge of taking bribe or misconduct is as serious a matter as convicting a person for a crime because his whole career is ruined. Therefore, the order of dismissal must be based on some evidence.

Summary: (a) Transfer of Property Act (IV of 1882), Ss. 122, 123 & 129—Registration Act (XVI of 1908), Ss. 17 & 49—Qanun-e-Shahadat Order, 1984, Art. 117—Muslim Law—Gift of immovable property—Declaration of oral gift—Burden of proof—Delivery of possession—Registration requirement—Effect of failure to prove gift— A valid gift under Muslim law requires three essential ingredients: declaration of gift by the donor, acceptance by the donee, and delivery of possession. While Muslim law permits oral gifts, when a donee claims ownership of immovable property based on an unregistered declaration of oral gift, strict proof of these ingredients is mandatory. In the present case, the petitioner failed to produce any registered document or evidence to establish the presence of the alleged donor (deceased Mst. Hoor Bai) in Pakistan at the time of the purported gift, nor could he prove the donor's intention, acceptance by the donee, or delivery of possession. The donee’s claim of being gifted the property was thus rightly rejected by the courts below. Cited Cases: Muhammad Ejaz v. Mst. Khalida Awan (2010 SCMR 342) Abid Hussain v. Muhammad Yousaf (PLD 2022 SC 395) Babar Anwar v. Muhammad Ashraf (2024 SCMR 734) Allah Ditta v. Manak alias Muhammad Siddique (2017 SCMR 402) Umar Bibi v. Bashir Ahmad (1997 SCMR 154) Maulvi Abdullah v. Abdul Aziz (1987 SCMR 1403) Allah Diwaya v. Ghulam Fatima (PLD 2008 SC 73) (b) Qanun-e-Shahadat Order, 1984, Art. 117—Onus probandi—Proof of relationship—Discharge of burden—Testimony of witnesses—Effect— Where a party claims inheritance or legal right in property based on familial relationship, the burden lies on them to prove that relationship under Art. 117. In the instant case, the respondent (plaintiff) successfully proved her status as the daughter of the deceased owner, Mst. Hoor Bai, through corroborated oral testimony of three witnesses. The petitioner failed to rebut this evidence during cross-examination. Once the relationship was established, the petitioner’s claim of being gifted the property by a stranger (i.e., the deceased) without any cogent explanation became untenable in law. (c) Cooperative Societies—Sindh Cooperative Societies Act, 2020 (Sindh Act XXVIII of 2020), Ss. 73, 99, 104, 117 & 118—Sindh Cooperative Societies Rules, 2020, R. 53—Jurisdiction of Cooperative Court—Transfer of property disputes—Classification of disputes—Judicial review—Interpretation and anomalies in statutory provisions— Disputes relating to ownership, possession, or cancellation of documents involving a cooperative society fall within the jurisdiction of the Special Court for Cooperative Societies, established under S.117 of the Sindh Cooperative Societies Act, 2020, and Rule 53 of the corresponding Rules. The Court observed that while offences under the Act are clearly defined, civil disputes are categorised under the Rules and not the Act itself. Furthermore, certain errors in statutory cross-referencing (e.g., incorrect mention of Ss. 121 and 78 in S.104) were noted, and the Supreme Court directed the provincial government to consider necessary legislative corrections. (d) Declaratory Suit—Suit for cancellation of documents and possession—Allegation of fraudulent transfer—Oral gift challenged—Concurrent findings—Scope of interference by Supreme Court— Concurrent findings of the Trial Court and High Court decreed the suit in favour of the respondent on the grounds that she was the lawful heir and the alleged oral gift to the petitioner was unsubstantiated. The petitioner’s failure to prove the essential ingredients of a valid gift, coupled with established heirship of the respondent, rendered the challenge meritless. The Supreme Court declined to interfere, holding the judgments below to be well-reasoned and supported by law and evidence. Disposition: Leave to appeal refused. Civil Petition dismissed. Judgment and decree of Trial Court and High Court upheld. Directions issued to the Secretary, Law & Parliamentary Affairs, Sindh, for review and correction of legislative inconsistencies in paragraph 10.

Summary: (a) Financial Institutions (Recovery of Finances) Ordinance, 2001 ----Ss. 9, 10(1), 10(4), 10(5), 10(6), 10(11), 19 & 3--- Suit for recovery---Finance facilities availed---Default in repayment---Financial institution filed suit for recovery of Rs.620,900,897.39 against a company and its guarantors under S.9 of the Financial Institutions (Recovery of Finances) Ordinance, 2001---Finance facilities availed included Finance Against Trust Receipt (FATR) and Working Capital Loan (WCL)---Plaintiff produced duly executed financing documents including Agreement for Financing on Mark-Up, Promissory Notes, Trust Receipts, personal guarantees, and registered charge mortgages---Defendants admitted certain disbursements but disputed liability without documentary rebuttal---Leave to defend was sought under S.10, but necessary account statements and disputed amounts were not provided as required under S.10(4) & 10(5)---Failure to meet statutory requirements warranted rejection of leave to defend under Ss.10(1) & 10(6)---Suit decreed jointly and severally against all defendants---Decree converted into execution under S.19---Cost of funds granted under S.3 of the Ordinance. Cited Cases: • Apollo Textile Mills Ltd. v. Soneri Bank Ltd., PLD 2012 SC 268 • Muhammad Saleem Khan v. MCB Bank Limited, 2020 SCMR 984 • Habib Bank Limited v. Orient Rice Mills Ltd., 2004 CLD 1289 Lahore • Messrs Colony Textile Mills Ltd. v. First Punjab Modaraba, 2021 CLD 1212 Lahore • Messrs Bahawalpur Cotton Co. v. United Bank Ltd., 2021 CLD 434 (b) Bankers' Books Evidence Act, 1891 ----S. 2(8)--- Bank statement---Verification---Admissibility---Statement of Account submitted by the plaintiff-bank was duly verified with the official endorsement and sworn oath, satisfying legal requirements under Bankers’ Books Evidence Act, 1891---Defendants failed to file any counter-statement or rebut the certified record---Unsubstantiated allegations were found to lack evidentiary weight. Cited Cases: • Habib Bank Ltd. v. Haidri Homes, 2012 CLD 2016 • Messrs Faizan Ali & Co. v. Habib Metropolitan Bank Ltd., 2017 CLD 1583 • First Dawood Inv. Bank Ltd. v. New Allied Electronics, 2018 CLD 250 (c) Contract Law---Guarantors' liability ----Personal Guarantees---Enforceability--- Directors of the debtor company had furnished personal guarantees for the finance obligations---Defendants failed to produce any evidence of forgery or fabrication---It was held that a guarantor’s liability remains enforceable even if the principal debtor’s obligation is disputed---Bank guarantees are autonomous contracts imposing absolute obligations on the guarantors. Cited Cases: • Huffaz Seamlen Pipe Industries Ltd. v. Allied Bank Ltd., 2002 SCMR 1419 • Sahara Trading International v. Bank Alfalah Ltd., PLD 2004 SC 925 • JS Bank Ltd. v. Mian Furqan Idrees, 2022 CLD 1395 Lahore (d) Evidence Law---Conflict between oral and documentary evidence ----Qanun-e-Shahadat Order, 1984, Arts. 102 & 103--- Where finance facility was disputed by defendants, but documentary evidence (including Trust Receipts, Credit Facility Offers, and Account Statements) supported the claim of the plaintiff-Bank, it was held that documentary evidence prevails over unsubstantiated oral assertions. Cited Cases: • Tassaduq Hussain Shah v. Allah Ditta Shah, 2023 SCMR 1635 • Muhammad Akbar v. Province of Punjab, 2022 SCMR 1532 • Sher Muhammad v. Muhammad Khalid, 2004 SCMR 826 (e) Civil Procedure Code, 1908 ----Order IV, Form No. 4 & Appendix B--- Summoning procedure---Defendants properly summoned as per procedure through registered post and publication---Appearance was made and application for unconditional leave to defend was filed---However, due to failure to meet statutory criteria, application dismissed, and ancillary applications also held to be not maintainable. Cited Cases: • Waheed Corporation v. Allied Bank of Pakistan, 2003 CLD 245 • Sheikh Muhammad Usman v. Judge Banking Court No.1, 2015 CLD 257 Lahore

Summary: Bail denied ---- (a) Penal Code (XLV of 1860) ----Ss. 420, 468, 471, 467, 419 & 109—Forgery of valuable security—Sale deed—Nature and effect Accused allegedly forged a sale deed to unlawfully transfer property belonging to a deceased individual into his own name—Court held that a sale deed qualifies as a "valuable security" under S.30, PPC, as it purports to create or transfer legal rights—Although offence under S.467, PPC was not initially applied by investigating agency, court observed that forgery of a valuable security attracted S.467, PPC, which carries a sentence of life imprisonment—Consequently, bar under S.497, Cr.P.C., on grant of bail in non-bailable offences punishable with death or life imprisonment was held applicable—Bail declined. Cited Cases: • Jainul Abdin v. Mulchand Budur AIR 1955 NUC (Assam) 2829 • AIR 1926 Allahabad 57 (b) Criminal Procedure Code (V of 1898) ----S. 497—Post-arrest bail—Scope—Offence of forgery involving valuable security—Prima facie evidence and gravity of offence Bail sought on ground that offences did not fall within prohibitory clause—Court held that S.467, PPC was prima facie attracted, making the offence fall within prohibitory clause of S.497—Petitioner allegedly masterminded transfer of immovable property of a deceased through forged documentation in collusion with revenue officials—Allegations supported by documentary evidence discovered during investigation—Held, gravity of offence and mode of commission precluded grant of bail. (c) Locus standi—Criminal prosecution—Initiation by interested but not aggrieved party ----S. 154, Cr.P.C.—FIR—Maintainability of complaint by relative of deceased Accused objected to FIR on ground that complainant was not a legal heir and thus lacked locus standi—Court held that fraud and forgery are crimes against society at large and can be reported by any member of the public—Real nephew of the deceased, being closely related and interested in protection of the deceased's estate, was competent to lodge FIR—Held, complaint was legally valid. Cited Case: • Muhammad Rasheed v. The State PLD 1959 (WP) Lahore 372 (d) Bail ----Fraud and forgery—Public trust—Abuse of official process—Relevance of petitioner’s role Court observed that petitioner, though not a public official, acted in collusion with revenue staff including Patwari and Naib Tehsildar and was the principal beneficiary of forged transfer—Petitioner’s role depicted him as mastermind of fraud—Held, grant of bail would amount to condoning abuse of public process and undermine public trust—Bail application rightly rejected. Disposition: Bail petition dismissed.

Summary: (a) Income Tax Ordinance, 2001: ----S. 177, Second Schedule, Part IV, Cl. 105A---Audit proceedings---Exemption from audit---Scope and applicability---Retrospective effect---Petitioner challenged audit proceedings initiated under S. 177 for tax year 2018, claiming exemption under Cl. 105A of Second Schedule, introduced by Finance Act, 2022---Petitioner argued Clause 105A applied retrospectively and covered audits concluded in preceding four tax years, regardless of actual audit year---Held, Clause 105A exempts a taxpayer from audit only if such audit was conducted in any of the preceding four tax years, determined by reference to tax years themselves, not the year of audit conclusion---Petitioner’s audit was conducted for tax year 2017, which fell outside the scope of Clause 105A as it did not cover tax year 2018---Held further, Clause 105A did not have retrospective effect in the absence of express legislative intent---Audit selection for 2018 was within lawful jurisdiction of tax authorities. Relied on: M/s RAJBY Industries Karachi v. Federation of Pakistan (2023 SCMR 1407); Commissioner Inland Revenue v. Allah Din Steel (2018 SCMR 1328) (b) Constitution of Pakistan: ----Art. 199, Art. 4 & Art. 10-A---Jurisdiction of High Court---Fundamental rights---Due process---Challenge to audit notice---Petitioner contended that issuance of audit notice and rejection letter infringed upon rights under Arts. 4 and 10-A of the Constitution and amounted to arbitrary, malafide exercise of power---Held, mere selection for audit under self-assessment regime does not constitute actionable injury or violation of due process---Impugned actions were found to be within lawful authority and did not contravene constitutional safeguards. Petition Dismissed.

Summary: (a) Income Tax Ordinance, 2001 – S. 177 & Second Schedule, Part IV, Clause 105A – Scope – Retrospective application of beneficial legislation – Audit exemption. Clause 105A, inserted via Finance Act, 2022, provides exemption from audit under Sections 177 and 214C of the Ordinance if a taxpayer has already been audited in any of the preceding four tax years – The term preceding four tax years refers to the specific tax years audited, not the date of audit conclusion – The petitioner’s audit was conducted for Tax Year 2014, thus no audit occurred in the four preceding tax years (2018–2021) – Therefore, the exemption under Clause 105A is not applicable. Commissioner Inland Revenue, Sialkot v. Allah Din Steel and Rolling Mills (2018 SCMR 1328) (b) Interpretation of Statutes – Retrospective effect – When not permissible. Beneficial legislation does not operate retrospectively unless the statute expressly provides such intention – Clause 105A contains no wording to suggest retrospective application – Therefore, it applies prospectively from 01.07.2022, and the audit notice issued prior to this date (18.01.2022) remains unaffected and valid. M/s RAJBY Industries Karachi v. Federation of Pakistan (2023 SCMR 1407) (c) Income Tax Ordinance, 2001 – S. 177 – Selection for audit – Validity – Audit proceedings initiated before amendment – Effect. Audit proceedings initiated prior to enactment of Clause 105A remain valid and unaffected – The issuance of notice dated 18.01.2022, for audit of Tax Year 2018, was lawful and not barred by the subsequent amendment – A mere selection for audit does not constitute actionable injury and is a lawful tool under self-assessment regime to verify tax returns. (d) Constitution of Pakistan, 1973 – Art. 199 – Constitutional petition – Maintainability – Challenge to audit notice – Scope. Petitioner challenged audit notice under Article 199, claiming violation of Articles 4 and 10-A of the Constitution – Court held that issuance of audit notice under Section 177 of the Ordinance does not violate constitutional rights and falls within the lawful jurisdiction of the tax authorities. -----Disposition: Writ Petition dismissed as being devoid of merit. Clause 105A does not apply retrospectively, and audit for Tax Year 2018 was lawfully initiated. Audit concluded for Tax Year 2014 does not entitle petitioner to exemption for the years 2018–2021.

Summary: (a) Constitution of Pakistan: ----Art. 199 Maintainability of writ petition against notices for income tax audit—Petitioner challenged notices issued under S. 177(1), Income Tax Ordinance, 2001, on grounds of lack of jurisdiction and violation of constitutional rights—High Court held that since the audit selection was made after the insertion of Clause 105A in Part IV of the Second Schedule to the Income Tax Ordinance, 2001 (via Finance Act, 2022), and no prior approval of the Federal Board of Revenue (FBR) was obtained, the notices were without lawful authority—Petition was held maintainable under Art. 199 of the Constitution. (b) Income Tax Ordinance, 2001: ----S. 177(1), S. 214C & Clause 105A, Part IV of Second Schedule Tax audit—Retrospective application of beneficial legislation—Scope and effect of Clause 105A—Petitioner had already undergone audit for Tax Year 2018, culminating in 2022—Clause 105A barred audit proceedings under S. 177 or 214C if the taxpayer had been audited in any of the preceding four tax years, unless approval of the Board was obtained—High Court held Clause 105A to be a beneficial provision and applicable retrospectively—Audit notice for Tax Year 2022 was found to be issued without lawful authority, as no prior Board approval was sought—Impugned notices declared void ab initio. (c) Interpretation of Statutes: ----Beneficial legislation—Retrospective effect—Taxpayer protection Beneficial statutory provisions—High Court held that newly inserted Clause 105A, being a beneficial and concessionary provision, must be interpreted in favor of the taxpayer—The exemption from audit under S. 177 and S. 214C extends to taxpayers already audited within the preceding four tax years—Absence of prior approval from the FBR rendered audit proceedings ultra vires. ----Disposition: Writ Petition allowed; Notices dated 26.10.2023 and 15.11.2023 set aside as illegal and without lawful authority.

Summary: (a) Constitution of Pakistan: ----Art. 199 Constitutional jurisdiction---Scope---Petition challenging audit notice under Income Tax Ordinance, 2001---Maintainability---Petitioner challenged audit proceedings initiated through notice under S. 177(1) of the Income Tax Ordinance, 2001, asserting violation of fundamental rights and alleging illegality, discrimination, and lack of jurisdiction---Petitioner relied upon newly inserted Cl. 105A of Part IV of Second Schedule to the Ordinance, 2001 (inserted via Finance Act, 2022) to claim exemption from audit---Held, mere selection for audit does not constitute an actionable injury under Art. 199 of the Constitution---Audit under a self-assessment regime is intended to verify the accuracy and veracity of returns and is within the legal mandate of the tax authorities. Cited Case: Commissioner of Inland Revenue, Sialkot v. Allah Din Steel and Rolling Mills 2018 SCMR 1328 (b) Income Tax Ordinance, 2001: ----S. 177(1), S. 214C & Cl. 105A of Part IV, Second Schedule Audit selection---Scope and application of Cl. 105A---Interpretation of “preceding four tax years”---Petitioner’s audit for tax year 2014, concluded in 2019, was cited to claim exemption from audit of tax year 2018 under Cl. 105A---Held, Clause 105A refers to the tax years in which audit was conducted, not the years in which it was concluded---Clause provides concession only if the taxpayer was audited in any of the preceding four tax years---Since audit was conducted for 2014, and no audits took place during tax years 2015 to 2018, the petitioner was not entitled to exemption under Cl. 105A---Interpretation proposed by petitioner rejected as inconsistent with plain language and legislative intent of Cl. 105A. (c) Statutory Interpretation: ----Retrospective application of beneficial legislation---Principles---Petitioner’s claim that Cl. 105A should be applied retrospectively rejected---Held, unless expressly provided, statutes, including beneficial legislation, are presumed to operate prospectively---Retrospective effect cannot be inferred in absence of curative or clarificatory language in the statute---Cl. 105A lacks wording to justify retrospective application. Cited Case: M/s RAJBY Industries Karachi v. Federation of Pakistan 2023 SCMR 1407 (d) Fiscal Statutes---Interpretation: ----Purpose and construction---Held, fiscal statutes, particularly machinery provisions for assessment and audit, must be interpreted to maintain workability and effectiveness of tax enforcement---Interpretation advanced by the taxpayer that frustrates or undermines audit processes or enables blanket exemptions without legislative support is not sustainable in law---Court emphasized that machinery of assessment should not be subjected to overly rigid construction. Cited Cases (Indian Jurisdiction): • United Provinces Electric Supply Co. Ltd. v. Commissioner of Income Tax 204 ITR 794 • Tity Thomas v. Tax Recovery Officer 207 ITR 1072 • Kerala State Industrial Dev. Corp. Ltd. v. Commissioner of Income Tax 246 ITR 330 • Jorawar Singh Baid v. Asst. Commissioner of Income Tax 198 ITR 47 ----Disposition: Petition dismissed as being devoid of merit.

Summary: (a) Constitution of Pakistan: ----Art. 199 Constitutional jurisdiction---Audit proceedings under Income Tax Ordinance, 2001---Scope of judicial review---Petitioner challenged selection for audit under S. 177(1) of the Ordinance of 2001, citing violation of Clause 105A, Part IV of Second Schedule and Articles 4, 18 & 25 of the Constitution---Held, mere selection for audit does not amount to actionable injury and falls within the administrative domain of tax authorities under a self-assessment regime---Jurisdiction under Art. 199 is not attracted unless the impugned action is patently illegal or without jurisdiction. Cited Case: Commissioner of Inland Revenue, Sialkot v. Allah Din Steel and Rolling Mills 2018 SCMR 1328 (b) Income Tax Ordinance, 2001: ----Ss. 177(1), 214C & Cl. 105A of Part IV, Second Schedule Audit selection---Interpretation of Clause 105A---Scope of exemption---Petitioner’s audit for tax year 2015 concluded in 2019---Petitioner claimed exemption from audit for tax year 2022 based on Clause 105A---Held, Clause 105A refers to audit conducted in any of the “preceding four tax years” and not the year of completion of such audit---Since no audit was conducted for the tax years 2021, 2020, 2019 or 2018, Petitioner was not entitled to exemption under Clause 105A---Circular dated 21.07.2022 issued by FBR proposing alternate interpretation was declared contrary to law by the Sindh High Court in Const. Petition No.D-6280 of 2024. (c) Interpretation of Statutes: ----Beneficial legislation---Retrospective effect---Principles---Petitioner asserted that Clause 105A should apply retrospectively as beneficial legislation---Held, beneficial statutes may be liberally construed, but cannot be applied retrospectively in absence of express or necessarily implied intention of the legislature---Clause 105A does not contain any language indicating retrospective operation---Petitioner’s claim for retrospective benefit was therefore untenable. Cited Case: M/s RAJBY Industries Karachi v. Federation of Pakistan 2023 SCMR 1407 (d) Fiscal Statutes---Interpretation: ----Audit proceedings---Legislative intent---Held, provisions related to audit and assessment under tax laws form part of the procedural machinery and must be interpreted in a manner that upholds enforceability and purpose of tax administration---Interpretations resulting in blanket exemptions or undermining audit mechanisms are not sustainable. ----Disposition: Petition dismissed as being devoid of merit.

Summary: (a) Constitution of Pakistan: ----Art. 199 Income Tax—Audit selection—Maintainability of writ petition—Scope of interference—Petitioner challenged audit notices issued under S.177 of the Income Tax Ordinance, 2001 for the tax year 2020 on the ground that after insertion of Clause 105A in Part IV of the Second Schedule of the Ordinance through Finance Act, 2022, no audit could be conducted if tax affairs had already been audited in any of the four preceding tax years—Petitioner contended that audit for tax year 2018 was concluded in tax year 2023, hence audit for tax year 2020 was barred under Clause 105A—Held, Clause 105A referred to “preceding four tax years” and the relevant year was the tax year being audited, not the year of conclusion of audit—Therefore, Petitioner’s audit for 2018 did not bar audit for 2020—Mere issuance of notice for audit under S.177, ITO 2001, without final adverse action, did not cause actionable injury to attract constitutional jurisdiction—Writ Petition was not maintainable in the circumstances. Cited Case: Commissioner Inland Revenue, Sialkot v. Allah Din Steel & Rolling Mills 2018 SCMR 1328 (b) Income Tax Ordinance, 2001 (XLIX of 2001): ----Ss. 177, 214C & Second Schedule, Part IV, Cl. 105A Income Tax—Audit—Clause 105A—Scope and retrospective application—Petitioner claimed retrospective benefit of Clause 105A introduced through Finance Act, 2022 to bar audit for the tax year 2020—Held, Clause 105A is a concessionary provision granting exemption from audit only for taxpayers whose tax affairs have already been audited in “preceding four tax years”—Phrase “preceding four tax years” to be interpreted in accordance with S.74 of the Ordinance, denoting tax years ending on June 30, and not the years in which audit proceedings concluded—No wording in Clause 105A indicated retrospective effect—In absence of clear legislative intent, fiscal statutes presumed to operate prospectively—Audit notices issued in 2021 before Clause 105A came into force, hence not hit by the amendment—Petitioner not entitled to retrospective application of beneficial legislation. Cited Case: M/s Rajby Industries Karachi v. Federation of Pakistan 2023 SCMR 1407 (c) Interpretation of Statutes: ----Fiscal statutes—Retrospective operation—Principles—Beneficial provisions in fiscal legislation cannot be construed to apply retrospectively unless expressly provided or the statute is curative or explanatory in nature—In the absence of clear words indicating retrospective application, such provisions will operate prospectively—Petitioner’s reliance on favorable interpretation of Clause 105A rejected due to lack of such legislative intent. ----Disposition: Writ Petition dismissed for being devoid of merit.