Mr. Muhammad Alam: Proprietor M/s Shahab Enterprises, House-A, Al-Faisal Timber Market, Taxila | Applicant | |
Vs | ||
Commissioner Inland Revenue, RTO, Rawalpindi. | Respondent | |
Appellant By | Mr. Muhammad Khurshid, ACMA | |
Respondent By | Mr. Muhammad Akram, DR | |
Date of Hearing | 13.05.2019 | |
Date of Order | 13.05.2019 |
M. M. AKRAM (Judicial
Member): The
above titled appeal has been filed by the registered person directly before
this Tribunal under section 46(1)(b) of the Sales Tax Act, 1990 (the Act) against
the impugned order of suspension of registration (Sales Tax) vide Order
C.No.CIR (District) Zone)/1321 dated 22.04.2019 passed under section 21(2) of
the Act by the learned Commissioner Inland Revenue (District Zone), RTO,
Rawalpindi on the grounds as set forth in the memo of appeal.
2. It
is contended by the learned AR of the appellant inter alia that the aforesaid
impugned order was passed without prior notice to the appellant and contains a
bald allegation without any reason whatsoever for the penalty imposed which has
brought the business of the appellant to stand still. He further submits that Rule
12(i)(a) of Sales Tax Rules, 2006 inter alia provides that sales tax
registration of the person be suspended without
prior notice. This is a clear violation of Article 10A of the
Constitution of the Islamic Republic of Pakistan, 1973. After insertion of
Article 10A in the Constitution of Pakistan 1973, “fair trial” and “due
process” are fundamental rights of every citizen for determination of his civil
rights and obligations. Before the suspension of the sales tax registration of
the appellant, the reason should be confronted and be given an opportunity of
being heard. Reliance is placed on in a recent judgment Sarfraz Saleem vs. Federation
of Pakistan and others (PLD
2014 SC 232) has held: -
"4……every person, for determination of his civil rights and obligations or in any criminal charge against him shall be entitled to a fair trial and due process."
In another case Babar Hussain Shah and
another vs. Mujeeb Ahmed Khan and another (2012
SCMR 1235), the Hon'ble Court has highlighted the import of Article 10A
in the words;
"11... concept of fair trial and due process has always been the golden principles of administration of justice but after incorporation of Article 10-A in the Constitution of the Islamic Republic of Pakistan, 1973 vide 18th Amendment, it has become more important that due process should be adopted for conducting a fair trial and order passed in violation of due process might be considered to be void.."
3. In reply, the learned DR submits that according to Rule 12(i)(a) of Sales Tax Rules, 2006, the Commissioner is specifically authorized to suspend the sales tax registration of any person without the issuance of prior notice, therefore, according to law the learned Commissioner IR has rightly passed the impugned order and therefore, there is no infirmity in the impugned order. He accordingly prays for the rejection of the appeal.
4. We have heard both the parties and
perused the relevant record. The pivotal issue involved in the instant appeal
is as to whether rule 12(i)(a) of Sales Tax Rules, 2006 offends the provisions
of Article 10A and 18 of the Constitution of Islamic Republic of Pakistan, 1973
and impinges upon the right of the appellant to be treated in accordance with
law and by due process of law as well as affects the right of the appellant to
conduct trade and business as enshrined in Article 18 of the Constitution? This
specific question came before the Hon’ble High Court in the case titled “M/s
Imran Ali Lubricants Vs Federation of Pakistan etc”(2018 PTD 1042)wherein
the rule 12 to the extent that it provides for suspension of registration of a
registered person without prior notice was held to be declared ultra vires the
Constitution as well as the main enactment and was struck down in the following
manner:-
“19. Besides, it is an immutable principle that in all proceedings whether judicial or administrative, the principles of natural justice have to be observed in the proceedings might result in consequences affecting the person or property or other rights of the parties concerned. Therefore, where a person is empowered to take decisions after a factual investigation into the facts which would result in consequences affecting the person, property, or other rights of any other person, then the courts have inclined generally to imply that the power so given is coupled with a duty to act in accordance with the principles of natural justice and fairness. [The University of Dacca through its Vice-Chancellor and the Registrar, University of Dacca v. Zakir Ahmed (PLD 1965 Supreme Court 90)].
20. Undoubtedly the power of suspension of registration without prior notice is unlawful and impinges upon the rights of the petitioners to be treated in accordance with law and to be afforded due process of law.”(Emphasis supplied)”
The ratio decided by the Hon’ble High Court in the above judgment is now upheld by the Division Bench of the Hon'ble High Court vide its order dated 14.03.2019, in ICA No.255820 of 2018.
5. By following the ratio decided by the Hon’ble High Court, the appeal of the appellant is accepted and the impugned order is set aside with the direction to the respondent to restore the sales tax registration number of the appellant forthwith in its original status i.e List of Active Taxpayer.
6. Appeal is disposed of
in the above terms. This order consists of (03) pages and each page bears my
signature.
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