APPELLATE TRIBUNAL
INLAND REVENUE, DIVISIONAL BENCH,
ISLAMABAD
STA No.313/IB/2013
MA (AG) No.113/IB/2019
(Tax
Periods March, 2001 to April, 2002)
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M/s Dewan & CO. H. No.218 B,
Street No.02, judicial Colony, Airport Road, Rawalpindi |
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Appellant |
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VS |
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Commissioner Inland Revenue,
RTO, Rawalpindi |
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Respondent |
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Appellant by |
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Mirza Saqib Siddeeq, Advocate |
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Respondent by |
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Mr. Muhammad Akram, DR |
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Date of hearing |
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05.12.2019 |
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Date of order |
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05.12.2019 |
M. M. AKRAM (Judicial Member): The
titled sales tax appeal has been filed by the appellant/registered person
against Order No.48/2013 dated 09.10.2013 passed by the Learned CIR
(Appeals-III), Islamabad for the tax periods March 2001 to April, 2002 on the
grounds as set forth in the memo of appeal. Subsequently, the appellant also
filed the additional grounds in the titled appeal.
2. Briefly facts culled out from the record are that the
Deputy Director, Intelligence and Investigation, (Customs, Central Excise and
Sales Tax) Range Office, Rawalpindi that M/s Dewan and Company, Khurram Colony
Muslim Town, Sadiqabad, Rawalpindi holding Sales Tax Registration
No.07-02-2202-015-19, received taxable beverages of different brands valuing
Rs.107,431,807/- from M/s Islamabad Distributors, Islamabad (the Sole
Distributor of M/s Haideri Beverages) and then supplied the same to the
unregistered retailers/persons during the period from March, 2001 to April,
2002 but failed to pay further tax amounting to Rs.2,647,602/- as required under
section 3(1A) of the Sales Tax Act, 1990 (“the Act”). In the light of the
foregoing facts, M/s Dewan and Co have not only violated sections 3(1A), 6, 7,
11, 22, 23, 26, and 34 of the Act but also evaded further tax Rs.2,647,602/-
which is recoverable from them under section 36 along with additional tax under
sections 34 and penalty u/s 33 of the Act. The assessing officer ultimately
passed an order in original No.08/2004 dated 14.04.2004 against the appellant.
Felt aggrieved, the appellant filed an appeal before the learned CIR
(Appeals-III), Islamabad who vide order dated 09.10.2013 rejected the appeal on
the sole ground that the same was hopelessly time-barred. Being aggrieved, the
appellant has now come up before this forum and has assailed the impugned order
on a number of grounds.
3. The titled appeal came
up for hearing on 05.12.2019. The learned AR vehemently contends that the order
in original was not properly served upon the appellant and therefore, after
getting the certified copy from Officer Inland Revenue, RTO, Rawalpindi on
17.06.2013 preferred the appeal before the learned CIR(A) on 20.06.2013 which
is well within the prescribed time. Further submits that the show cause notice
in the instant case was issued on 31.07.2003 and the order in original was passed
on 14.04.2004 after the expiry of the statutory period of ninety days as
prescribed in sub-section (3) of section 36 of the Sales Tax Act, 1990. Thus
the order in original is illegal and void ab-initio, the supper structure-based
thereon automatically falls to the ground. To support his contention, the
learned AR relied upon the judgment of the Hon’ble Supreme Court of Pakistan
titled as Collector of Sales Tax Vs Super Asia Muhammad Din (2017 PTD 1756).
The learned AR further contends that the basic order being void ab-initio
having been passed after expiry of ninety days, therefore, the limitation does
not attract against void order. Reliance was placed on 2019 SCMR 648. To sum up, his arguments the learned AR
lastly contends that the appellant has been treated discriminately as in such
like circumstances, the department had accepted the plea of the registered
person on the basis of the judgment of the Hon’ble Peshawar High Court reported
as 2004 PTD 2267 wherein it
was held that further tax under section 3(1A) of the Act could not be charged
on Third Schedule items. Copy of order in original No.14/2009 dated 03.06.2009
is placed on file.
4. The learned DR
appearing on behalf of the department has contended that the show cause notice
issued by the Additional Collector and in consequence thereof passing the order
in original is in accordance with law and therefore, there is no infirmity in
the impugned order. He, therefore, prays for the rejection of the appeal.
5. We have heard both the
parties, considered the submissions, and also perused the relevant material on
record. We have also carefully gone through the judicial pronouncements cited
by the learned AR, the question that arises out of the order-in-original is as
to whether the Additional Collector (Adjudication) could have passed the order
after the expiry of ninety days from the date of issuance of show cause notice
as prescribed in sub-section (3) of section 36 of the Sales Tax Act, 1990? To answer
the said question, we will agree with the learned AR that the time prescribed
for making an order in sub-section (3) of section 36 is mandatory and has
already been decided by the Hon’ble Supreme Court of Pakistan in the case
titled as Collector of Sales Tax Vs Super Asia Muhammad Din (2017 PTD 1756)
wherein it has been held that:
9. Another aspect of the matter is that when a statute
requires that a thing should be done in a particular manner or form, it has to
be done in such a manner. But if such provision is a directory, the act done in
breach thereof would not be void, even though non-compliance may entail penal
consequences. However, non-compliance
with a mandatory provision would invalidate such an act. In this context,
reference may be made to the case of Rubber House v. Excellisor Needle
Industries Pvt. Ltd. (AIR 1989 SC 1160). Thus, having held the first proviso to
section 36(3) supra to be mandatory, the natural corollary of non-compliance
with its terms would be that any order passed beyond the stipulated time period
would be invalid.” (Emphasis supplied)
The above judgment of the Hon’ble Supreme Court of Pakistan makes it
clear that the first proviso to section 36(3) of the Sales Tax Act, 1990 is
mandatory. Thus, the assessing officer has to pass an order within the
statutory period of ninety days at the relevant time and non-compliance
thereof, the order would be invalid. In the instant case, the show cause notice
was issued on 31.07.2003 and the order in original was passed on 14.04.2004
after the expiry of ninety days as prescribed at the relevant time in section
36(3) of the Sales Tax Act, 1990. Therefore, in the light of the judgment cited
supra, the basic order is void. The contention of the learned AR that the
limitation does not attract against void ab-initio order is also tenable.
Reliance in this regard may be placed on the recent judgment of the Apex Court
titled Qazi Munir Ahmed Vs Rawalpindi Medical College and Allied Hospital 2019
SCMR 648. In the said judgment it has been held that: -
“6. We have heard the learned counsel for the parties and
carefully examined the record. There is no denial of the fact that the appeal
filed by the RMC was within time. As such, even if the appeal filed by the
Government of Punjab was barred by time, the learned Division Bench had legal
basis and lawful justification to entertain and decide both appeals on merits. Even otherwise, the order of the petitioner's
appointment was found to be void. Further, in terms of the law laid down by
this Court in the judgment reported as Yousaf Ali v. Muhammad Aslam Zia (PLD
1958 SC 104), no period of limitation runs against a void order.”
(Emphasis supplied)
Further,
the careful perusal of the impugned appellate order shows that the learned
CIR(A) has only observed that the order in original was issued on 09.06.2004
but there is nothing on record to show that it was properly served on the
appellant and therefore, keeping in view the judgment titled as Hussain
Foods Multan vs CIT (2003 PTD 1516), it cannot be presumed that the
service of order was proper and in accordance with law. Section 56 of the Sales
Tax Act, 1990 requires that a notice, the order shall be served by sending it
by registered post acknowledgment due or courier service to the person for whom
it is intended. Further, in a revenue/tax matter, the Hon’ble High Court in the
case titled Saleem Akhtar v. CIT Sargodha Zone-A (2002 PTD 1035) has
held that:-
“3. In a recent judgment in C.A. No. 323 of 2001 we have examined the issue of limitation in revenue matters. For various reasons stated in that order, this Court expressed the view that unless an assessee was contumacious a prayer for condonation of delay in filing appeals should be considered objectively. Particularly for the reason that by delaying an appeal an assessee does not stand to gain anything nor a delay on his part gives rise to or creates a valuable right in favour of the Revenue. Therefore, we directed that the delay of 43 days in filing of the appeal before the Customs, Excise, and Sales Appellate Tribunal under section 46 of the Sales Tax Act, 1990 ought to have been condoned. In the course of that order, we referred to the observations of M.P. Thakkar, J. in re: Controller Land Acquisition v. Mst. Katiji and others (1987) 56 Tax 130 (SC India), Speaking for the Court the Hon'ble Judge observed that:-
(i)
Ordinarily,
a litigant does not stand to benefit by lodging an appeal late.
(ii)
Refusing to
condone delay can result in a meritorious matter being thrown out at the very
threshold and cause of justice being defeated. As against this, when the delay
is condoned, the highest that can happen is that a case would be decided on
merits after hearing the parties.
(iii)
“Every day's
delay must be explained'' does not mean that a pedantic approach should be
made. Why not every hour's delay, every second's delay? The doctrine must be
applied in a rational, common sense, and pragmatic manner.
(iv)
When
substantial justice and technical considerations are pitted against each other,
the cause of substantial justice deserves to be preferred for the other side
cannot claim to have vested right injustice being done because of a
non-deliberate delay.
(v)
There is no
presumption that delay is occasioned deliberately, or on account of culpable
negligence, or on account of mala fides. A litigant does not stand to benefit
by resorting to delay. In fact, he runs a serious risk.
(vi) It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so.
5. To the above list, we added our own views expressed earlier that in revenue matters prayer for condonation by an assessee/citizen should all the more be considered sympathetically.”
Therefore, keeping in view of the aforesaid, the issue raised in
this appeal has already been decided by the Hon’ble Supreme Court of Pakistan,
this Tribunal is bound to follow the judgments supra. In the circumstances,
this appeal is accepted on the same terms as the law enunciated and articulated
in cited judgments. Consequently, the orders passed by the lower authorities
are annulled.
6. The appeal is disposed of in the manner indicated
above. This order consists of (05) pages and each page bears my signature.
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Sd/- (M.M. AKRAM) JUDICIAL
MEMBER |
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Sd/- (NADIR
MUMTAZ WARRAICH) ACCOUNTANT
MEMBER |
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CERTIFICATE
U/S 5 OF THE LAW REPORT ACT
This case
is fit for reporting as it settles the principles highlighted above.
JUDICIAL
MEMBER
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