APPELLATE TRIBUNAL INLAND REVENUE, DIVISIONAL BENCH,
ISLAMABAD
STA No.501/IB/2018
(Tax Period July, 2016 to June, 2017)
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M/s Suhail and Fawad Architects; House No.319, Nazim ud Din Road, Sector F-11/1, Islamabad. | Appellant | |
VS | ||
Commissioner Inland Revenue, West Zone, RTO, Islamabad. | Respondent | |
Appellant by | Mr. Mudassar Khalid, FCA | |
Respondent by | Mr. Shamshad Gul, DR | |
Date of hearing | 23.07.2019 | |
Date of order | 23.07.2019 |
O R D E R
M. M. AKRAM (Judicial Member): The titled appeal has been filed by the appellant/registered person directly before this Tribunal as the first appeal under section 46 (1)(b) of the Sales Tax Act, 1990 (“the Act”) without first availing a statutory remedy available to them under section 45B of the Act against an Assessment Order No.01/2018 dated 24-09-2018 passed by the learned Commissioner Inland Revenue, West Zone, RTO, Islamabad for the tax period from July, 2016 to June, 2017 on the grounds as set forth in the memo of appeal.
2. Briefly facts culled out from the record are that the appellant failed to charge sales tax of Rs.3,951,956/- for the tax period from July, 2016 to June, 2017 on the differential of sales/receipts declared in income tax return vis-a-vis sales tax returns. The appellant was confronted through show cause notice issued under section 11(2) of the Sales Tax Act, 1990 for violations of sections 3, 3(1A), 6, 7, 22, 23 and 26 of the Act of 1990 read with section 3 of the Islamabad Capital Territory (Tax on Services) Ordinance, 2001. The contravention proceedings initiated against the appellant culminated in passing the impugned order, whereby the alleged demand reduced to Rs.2,569,755/-. Being aggrieved of the said order, the appellant preferred an appeal before this Tribunal under section 46 (1)(b) of the Act on a number of grounds.
3. The titled appeal came up for hearing before this Tribunal on 23-07-2019. At the very outset, this Tribunal asked the learned AR that in the presence of a statutory remedy available to the appellant under section 45B of the Act against an order passed under section 11 of the Act, how this appeal is maintainable which has been filed directly under section 46(1)(b) of the Act without recourse to appeal before the Commissioner IR (Appeals). The learned AR explains that since the impugned order has been passed by the learned Commissioner Inland Revenue under section 11 of the Act, therefore, according to him, the appeal only lies before this learned Tribunal. He further submits that the Commissioner Inland Revenue (Appeals) and the Commissioner Inland Revenue who had passed the impugned order are the authorities of the same rank and as such the Commissioner Inland Revenue (Appeals) has no authority under section 45B of the Act as an appellate forum to hear and decide the matter. He further contended that for the aforesaid reasons, the concerned Commissioner IR (Appeals) also observed vide Order-in-Appeal No.ST 56/2018/84 dated 06-11-2018 that the appeal is not maintainable before him and therefore, the appellant did not have any alternative except to file the instant appeal before this Tribunal.
4. We are not persuaded with the arguments advanced by the learned AR of the appellant. To resolve this question of law which arise for determination in this appeal is as to whether the appeal against an order passed by the Commissioner Inland Revenue under section 11 of the Act could be filed under section 45B of the Act or not? To answer this question, it would be expedient to first reproduce hereunder the relevant provisions of the Act which will have an impact to resolve the controversy in the instant appeal which are section 2 (18), section 30, section 45B, section 46 of the Sales Tax Act, 1990 and section 33 of the Federal Excise Act, 2005: -
“Provisions of law under Sales Tax Act, 1990
Section 2 (18) “Officer of Inland Revenue'' means an officer appointed under section 30.
Section 30. Appointment of authorities:- (1) For the purpose of this Act, the Board may, appoint in relation to any area, person or class of person, any person to be-
(a) a Chief Commissioner Inland Revenue;
(b) a Commissioner Inland Revenue;
(c) a Commissioner Inland Revenue (Appeals);
(d) an Additional Commissioner Inland Revenue;
(e) a Deputy Commissioner Inland Revenue;
(f) an Assistant Commissioner Inland Revenue;
(g) an Inland Revenue Officer;
(h) a Superintendent Inland Revenue;
(i) an Inland Revenue Audit Officer;
(ia) an Inspector Inland Revenue; and
(j) an officer of Inland Revenue with any other designation.
(2)……………………..
Section 45B. Appeals: - (1) Any person, other than the Sales Tax Department, aggrieved by any decision or order passed under section 10, 11, 25, 36, or 66 by an Officer of Inland Revenue may, within 30 days of the date of receipt of such decision or order, prefer appeal to the Commissioner Inland Revenue (Appeals):
Provided that an appeal preferred after the expiry of thirty days may be admitted by the Commissioner Inland Revenue (Appeals) if he satisfied that the appellant has sufficient cause for not preferring the appeal within the specified period.
Provided further that the appeal shall be accompanied by a fee of one thousand rupees to be paid in such manner as the Board may prescribe.
(1A) Where in a particular case, the Commissioner (Appeals) is of the opinion that the recovery of tax levied under this Act, shall cause undue hardship to the taxpayer, he, after affording opportunity of being heard to the Commissioner or officer of Inland Revenue against whose order appeal has been made, may stay the recovery of such tax for a period not exceeding thirty days in aggregate.
(2)………………………….
Section 46. Appeals to Appellate Tribunal: - (1) Any person including an Officer of Inland Revenue not below the rank of an Additional Commissioner, aggrieved by any order passed by-
(a) the Commissioner Inland Revenue] (Appeals) under section 45B.
(b) the Commissioner Inland Revenue through adjudication or under any of the provisions of this Act or rules made thereunder,
(c) the Board under section 45A, may, within sixty days of the receipt of such order, prefer an appeal to the Appellate Tribunal.]
Provision under the Federal Excise Act, 2005
Section 33. Appeals to Commissioner (Appeals): - (1) Any person other than Federal Excise Officer aggrieved by any decision or order passed under this Act or the rules made thereunder by an Officer of Inland Revenue upto the rank of Additional Commissioner Inland Revenue, other than a decision or order or notice given or action taken for recovery of the arrears of duty under this Act or rules made thereunder made within thirty days of receipt of such decision or order proffered appeal therefrom to the Commissioner (Appeals).”
It can be seen from the combined reading of the above provisions of law which clearly provides that an officer with the designation of 'Inland Revenue Officer' has been defined in section 2 (18) of the Act. Section 30 empowers the Board to appoint in relation to an area, person or class of persons an Officer of Inland Revenue having a specific designation. The definition of Inland Revenue Officer is exhaustive and unequivocally indicates that the expression in itself is not a specific officer but refers to all the officers appointed under section 30. The appointment is, therefore, made on the basis of a specific designation of an officer. Clauses (a) to (ia) of sub-section (1) of section 30 unambiguously enumerate the various designations of officers of the Inland Revenue. Clause (j) provides that the Board may appoint an officer of the Inland Revenue with any other designation. Each officer necessarily has to have a specific designation in order to exercise the powers and functions under the Act. The expression 'Officer of Inland Revenue' is, therefore, a general expression or phrase for all the officers having a specific designation and empowered to exercise powers under the various provisions of the Act.
5. In the instant case, the impugned order has been passed by the officer having the designation of Commissioner Inland Revenue as mentioned in clause (b) of subsection (1) of section 30. Subsections (1), (2), (3) and (4) of section 11 expressly provide that the show cause notice under the relevant provisions shall be issued by an Officer of Inland Revenue who shall pass an order under the said provisions of law. Therefore, every order passed by the Officer of Inland Revenue recorded under sections 10, 11, 25, 36, or 66 is appealable before the appellate jurisdiction of Commissioner Appeals under section 45B of the Act. Sub-section (1A) of section 45B of the Act further clarifies that if recovery of tax levied under this Act, shall cause undue hardship to the taxpayer, the Commissioner Inland Revenue (Appeals) can call for the Commissioner Inland Revenue or the Officer of Inland Revenue and after affording an opportunity of being heard to them as the case may be against whose order an appeal has been made, may stay the recovery of such tax for a period not exceeding thirty days in aggregate. Further it can be seen from a bare reading of section 25 of the Act that only the Commissioner of Inland Revenue has the power to pass an order for the purposes of selection of a person case for audit under section 25 of the Act. If a registered person is aggrieved of the said order, he may file an appeal under section 45B of the Act. Section 45B of the Act therefore, in expressed words, provides a right of appeal to the registered person to file an appeal before the Commissioner Inland Revenue (Appeals) against the order passed by the Commissioner Inland Revenue under section 25. It is well settled that statute or a provision thereof is to be construed so as to make it workable and any construction which shall defeat the main scheme of law is to be avoided. Court is to interpret law as it stands and redundancy must not be attributed to a statute or provision thereof. Every word or expression has to be given meaning. An effort has to be made to read provisions harmoniously. Question essentially relating to the wisdom of Parliament in enacting law, as long as legislature has competence to legislate, is the exclusive prerogative of Parliament. Reference in this regard can be made to Abdul Razzaq Khokhar v. Province of Punjab through Secretary to Government of Punjab and others (1990 SCMR 183), Market Committee Khudian through its Administrator v. Town Committee Khudian through its Chairman (1992 SCMR 1403), Qazi Hussain Ahmad, Ameer Jamaat-e-Islami Pakistan and others v. General Pervaiz Musharraf, Chief Executive and others (PLD 2002 Supreme Court 853), Aftab Shahban Mirani and others v. Muhammad Ibrahim and others (PLD 2008 Supreme Court 779), District Bar Association, Rawalpindi and others v. Federation of Pakistan and others (PLD 2015 Supreme Court 401), Messrs Habib Rafiq Pvt. Ltd. through Authorized Representative v. Government of Punjab and another (PLD 2015 Lahore 34), Pakistan Telecommunication Company Ltd. v. Pakistan Telecommunication Authority(PLD 2015 Islamabad 184) and Pakistan Telecommunication Company Ltd. v. Federation of Pakistan (2016 PTD 1484). A provision for appeal should be liberally construed and should be read in a reasonable and practical manner. Reliance is placed on CIT Vs Ashoka Engg (194 ITR 645 (SC), it is always desirable not to place a restricted meaning to such a provision and take away the right of appeal provided to a party. DCIT Vs Shantharam (260 ITR 156). While construing a provision that creates a right, the court must always lean in favour of a construction that saves the right rather than the one which defeats it. CWT Vs Jagdish(211 ITR 472).
6. The remedy of appeal provided in section 46(1)(b) of the Act against any order passed by the Commissioner Inland Revenue is in general terms without specifying the provisions on the basis whereof the order is to be passed whereas in section 45B of the Act, the remedy of an appeal is in specified term against the decision or order passed under section 10, 11, 25, 36 or 66 of the Sales Tax Act, 1990. It is settled principle of law that where there are both general and specific provisions, the specific provision shall prevail over the general. It is also settled by now that where a provision of the taxing statute can be reasonably interpreted in two ways, the interpretation which is favourable to the assessee has to be accepted. CIT v. Naga Hills Tea Co. Ltd. (AIR 1973 SC 2524). Also if two views are possible, the one favourable to the assessee has to be accepted. Sun Export Corporation vs Collector of Customs (1997) 6 SCC 564.
Further the scheme of Federal Excise Act, 2005 vis-a-vis the powers/jurisdiction for assessment of excise duty is identical to that of the Sales Tax Act, 1990 while making a comparison of the corresponding provisions under the two statues. Having analyzed the matter in this context, the provisions of section 33 of the Federal Excise Act, 2005 are peri-materia with the provisions of section 45B of the Act leading us to conclude that the legislature has expressed its intention in Sec 33(1) of the Federal Excise Act, 2005 with the sentence “Any decision or order passed by officer of Inland Revenue upto the rank of Additional Commissioner Inland Revenue”may file an appeal before the Commissioner Inland Revenue whereas in Section 45B of the Sales Tax Act, 1990 the same is provided as “Any decision or order passed by officer of Inland Revenue”without any specific restriction of designation of an Officer of Inland Revenue. This fine distinction further clarify that any order passed by the Officer of Inland Revenue under section 11 of the Act is appealable before Commissioner Inland Revenue (Appeals) under section 45B of the Act.
7. Before parting with this judgment we would like to observe that in case the appellant approaches the concerned Commissioner Inland Revenue (Appeals) under the provisions of section 45B of the Act along with an application under section 14 (Exclusion of time of proceeding bona fide in Court without jurisdiction) of the Limitation Act, 1908, the Commissioner Appeal may consider the same in the light of the celebrated judgments of the Hon’ble Peshawar High Court in Mst. Baz Khana's case (PLD 2005 Peshawar 214) wherein it has been held that: -
“Assuming for a while that the appellants did not act with due diligence by prosecuting their remedy in a wrong forum, nonetheless, they, before it was too late, could be put on the right track by the learned District Judge, The day the memorandum of appeal was presented before him. This is what preliminary hearing stands for. In any case when it was entertained and even admitted by the learned Judge without adverting to its competency on account of his pecuniary jurisdiction, all the time so consumed from its entertainment to its return in his court, cannot be debited in the account of the appellants, and thus they cannot be allowed to suffer for the act of the Court. Had it been returned on the first date of hearing the appellants could have presented it in this court well within time. Since the time was consumed due to the act of the Court, it will certainly constitute a sufficient cause for condonation of delay as according to the principle enshrined in the maxim actus curiae neminem gavabit, an act of the court shall prejudice none.''
This settled principle has been consistently upheld and annunciated in the subsequent decisions of the August Supreme Court of Pakistan in Mst. Razia Jafar's case (2007 SCMR 1256) and Akbar Shah's case(2010 SCMR 1408). While dealing with an act of the Court, the Privy Council, in the case of Jai Berhrm v. Kedar Nath (AIR 1922 P.C. 269) made the following observation: -
"One of the first and highest duties of all Courts is to take care that the act of the Court does not cause injury to any of the suitors and when the expression “the act of the Court”, is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of Appeal, but the act of the Court as a whole from the lowest Court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case."
In case this Tribunal entertains the instant appeal, it would virtually deprive the appellant of one remedy of appeal and the ancillary relief of stay against recovery proceedings. The appellant’s right of appeal u/s 46 remains intact if he/it files first appeal to the Commissioner (Appeals) u/s 45B.
8. That being the legal position, the instant appeal is returned to the registered person for filing the same before the concerned Commissioner Inland Revenue (Appeals) within minimum possible time who shall decide the appeal of the registered person after giving proper opportunity of being heard to both the parties in accordance with law and may condone the delay in exercise of his inherent powers enshrined under the proviso to sub-section (1) of section 45B.
9. The appeal is disposed of in the above terms. This order consists of (08) pages and each page bears my signature.
Sd/-
(M. M. AKRAM)
JUDICIAL MEMBER
Sd/-
(NADIR MUMTAZ WARRAICH)
ACCOUNTANT MEMBER
CERTIFICATE U/S 5 OF THE LAW REPORT ACT
This case is fit for reporting as it settles the principles highlighted above.
(M. M. AKRAM)
JUDICIAL MEMBER
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