APPELLATE TRIBUNAL INLAND REVENUE (PAKISTAN)
KARACHI
BENCH, KARACHI
STA
No. 429/KB of 2019
M/s. Steel Zone,
Plot No.115/5, Abigal Road,
Ghanchi Para, Siddique Wahab Road,
Karachi. ……..……………………………
Appellant
V e r s u s
The Commissioner Inland Revenue,
Zone-I, CRTO, Karachi. ……….…………………… Respondent
Appellant by : Mr. Mushtaque Husain Qazi, Advocate.
Respondent by : Mr. Ashfaq Awan, DR
Date of hearing : 11.03.2021
Date of order : 11.03.2021
O R D E R
2. Brief facts culled out from the record are
that the Senior Auditor, E&C Unit-02, Zone-I, CRTO, Karachi reported to the
DCIR, E&C Unit-02, Zone-1, CRTO, Karachi that during scrutiny of
appellant’s sales tax record, the following discrepancies were observed:-
i. Sales tax
returns for the tax periods December 2016, January 2017 and March 2017 has
revealed declaration of taxable goods worth Rs.150,113,296/-, Rs.78,449,114/-
and Rs.11,204,132/- respectively to un-registered persons against which the
appellant was liable to pay further tax of Rs.3,002,266/- and Rs.224,083/- (@2%
of value of supplies) respectively in terms of section 3 (1A) of the Sale Tax
Act, 1990 (“the Act”) but the
appellant failed to deposit the due tax into Government treasury.
ii. During
the tax periods July, 2014 to June, 2015 and July, 2015 to June, 2016 appellant
had claimed inadmissible input tax adjustment at Rs.2,231,703/- and 6,573,914/-
respectively as the same was not excluded from the purview of sub-section (1)
of section 8B of the Act read with SRO 647(I)/2007 dated 27.06.2007 by
declaring appellant’s status as a “Commercial Importer” therefore, being a part
manufacturer, input tax adjustment amounting to Rs.8,805,617 was inadmissible.
iii. In the sales tax returns from July, 2014 to June, 2016, the appellant has claimed exclusion from payment of sales tax in terms of section 8B of the Act being a commercial importer. Accordingly, appellant was required to pay minimum value addition @ 3% of value of imports amounting to Rs.3,118,479/- and Rs.16,076,497/- respectively which was not paid, therefore, the same is liable to be charged and recovered from the appellant.
3. On the basis of the forgoing discrepancies,
a show cause notice was issued by the Assessing Officer on 31.07.2017 to the
appellant for compliance on 07.08.2017. In response thereto, the appellant’s AR
sought adjournments only and did not furnish any record/explanation etc to
explain/contest the allegations leveled in the show cause notice. On account of
non-submission of relevant details/evidence/record etc the order in original
dated 30.11.2017 was passed by the Assessing Officer and the appellant was
directed to pay further tax under section 3(1A) of the Act on account of sales
of imported goods to unregistered persons at Rs.4,795,331/- and value addition
@ 3% on the value of imports amounting to Rs.3,188,479/- and 16,076,497/-
respectively for the tax periods from July, 2014 to June, 2016 on account of
claiming exclusion from payment of sales tax under section 8B of the Act.
Accordingly, sales tax amounting to Rs.23,990,305/- was ordered to be
recovered.
4. On receipt of the order-in-original, the
appellant went to choose the remedy provided under section 57 of the Act and
forgo the remedy of appeal provided in section 45B of the Act against the said
order. The applications for rectification were rejected by the Assessing
Officer through orders dated 19.01.2018 and 06.02.2018. It is pertinent to
mention here that statute does not provide the right of appeal to the
registered person against the order passed under section 57 of the Act.
Nevertheless, on receipt of last rejection of rectification order, the
appellant decided to file the appeal before the learned CIR(A) and assailed all
the orders passed by the Assessing officer under section 11 and 57 of the Act on
a number of grounds. The learned CIR(A) vide order dated 24.09.2019 rejected
the appeal on the sole ground that the same had become barred by time after the
expiry of statutory period of thirty (30) days prescribed in section 45B(1) of
the Act. Felt aggrieved with the order, the appellant has now come up before
this Tribunal and assailed the impugned appellate order on a number of
grounds.
5. This case came up for hearing on
11.03.2021. At the very out set the learned A.R. apprised that he did not want
to press the grounds numbers 2 to 4. However, he argued that the learned CIR(A)
was not justified in rejecting the appeal of the appellant on the ground of
limitation. He explained that the DCIR, E&C, Zone-1, CRTO, Karachi has
badly erred and blatantly transgressed the jurisdiction/powers/authority vested
in him by the Commissioner IR, Zone-1, CRTO, Karachi vide jurisdiction order
dated 25.10.2017. Thus, the order-in-original is void ab-initio and it is
settled law that the limitation does not attract against void order. He
therefore, pleaded that the appeal be accepted and decided on its own merits.
6. On the other hand, the learned DR vehemently opposed the
contentions of the learned AR and contended that the appellant could not avail
two remedies simultaneous or one after the other under the law. He explained
that after choosing the remedy provided in section 57 of the Act, the other
remedy of appeal provided in terms of section 45B of the Act stands automatically
waived off. Further, contended that it was an obligation on the part of the
appellant to first make an application for condonation of delay along with the
appeal and thereafter contest the issue as to whether the order in original was
void ab-initio and without jurisdiction. Admittedly, nothing has been done on
the part of the appellant. He therefore, submits that the learned CIR(A) has
rightly passed the order against the appellant. It has been stated by the
learned DR that the order passed by the DCIR, E & C Unit-02, CRTO, Karachi was
well within his jurisdiction vested in him by the Commissioner Inland Revenue
Zone-1, CRTO, Karachi. The learned DR argued that the order passed by the
learned CIR(A) is a speaking order and there is no infirmity in the impugned
order. The learned CIR (Appeals) has thoroughly discussed the assertions of the
appellant according to the facts and circumstances of the case. He therefore,
prayed for rejection of appeal.
7. We have heard the learned representatives
from both the sides and perused the orders of the authorities below. The
following questions emerge from the record for determination by this Tribunal:-
i). Whether the appellant is entitled under the law to avail two
remedies simultaneous or one after the other against the same cause?
ii). Whether the learned CIR(A) has rightly dismissed the appeal of
the appellant having become barred by time after the expiry of statutory period
of thirty (30) days as prescribed in section 45B of the Sales Tax Act, 1990?
8. Now,
we turn to question no.(i), although the Appellant registered person at least
had two concurrent remedies, i.e. appeal and rectification application under
section 45B and 57 of the Act respectively to assail the order of the Assessing
Officer and one does not exclude the other, but it was open to it to choose
either of the two and the moment remedy of rectification application was
availed, the doors of the CIR(A) to receive/entertain the appeal under section 45B
ibid were closed to decide both the remedies simultaneously or one after the
other. If duplication is allowed, then there would be no end of litigation,
which may also cause conflicting judgments and would be sheer abuse of process
of law. The Apex Court while dealing with a similar proposition in a case
titled as Mrs. Amina Bibi vs. Nasrullah[1],
had discussed the remedies and panorama available to the litigant for his
redressal against an ex-parte decree and Para 7 thereof being relevant is given
below: -
“Where a suit has been decreed ex-parte, various remedies are available to an aggrieved person for redress of his grievance. Firstly, an application under Order IX rule 13 CPC; secondly, an appeal from the ex-parte decree under section 96 (2), CPC; a petition for review under section 114 read with Order XLVII and a civil suit on the ground of fraud and want of jurisdiction. The latter remedy is now substituted by section 12 (2) CPC. Here, the petitioner has exhausted her remedies by filing an application under Order IX rule 13 CPC and, therefore, on the same ground she cannot be permitted to re-agitate the same issue by means of a fresh petition under section 12 (2) CPC.”
The Apex Court rendered a comprehensive
judgment and his Lordship Mr. Justice Mushir Alam, speaking for it in the case
reported as Trading Corporation of Pakistan Vs. Devan Sugar Mills Limited and
others[2],
discussed the doctrine of election in depth and finally held that once
the litigant opted to avail one out of the provided remedies, then it generally
could not be permitted to initiate the other one. The relevant part of his
lordship’s conclusion being squarely applicable to the facts of the case in
hand is reproduced hereunder:
“…. …The moment suitor intends to commence
any legal action to enforce any right and or invoke a remedy to set right a
wrong or to vindicate an injury, he has to elect and or choose from amongst
host of actions or remedies available under the law. The choice to initiate and
pursue one out of host of available concurrent or co-existent
proceedings/actions or remedy from a forum of competent jurisdiction vest with
the suitor. Once choice is exercised and election is made then a suitor is
prohibited from launching another proceeding to seek a relief or remedy
contrary to what could be claimed and or achieved by adopting other
proceeding/action and or remedy, which in legal parlance is recognized as
doctrine of election, which doctrine is culled by the courts of law from the
well-recognized principles of waiver and or abandonment of a known right, claim
privilege or relief as contained in Order II, rule (2) C.P.C., principles of
estoppel as embodied in Article 114 of the Qanun-e-Shahadat Order 1984 and
principles of res-judicata as articulated in section 11, C.P.C. and its
explanations. Doctrine of election apply both to the original
proceedings/action as well as defences and so also to challenge the outcome on
culmination of such original proceedings/action, in the form of order or
judgment/decree C.R.No.1339/2017 10 (for illustration it may be noted that
multiple remedies are available against possible outcome in the form of an
order/judgment/decree etc. emanating from proceedings of civil nature, which
could be challenged/defended under Order IX, rule 13 (if proceedings are
ex-parte), section 47 objection to execution), section 114(by way of review of
an order), section 115 (revision), under Order XXI, rules 99 to 103 C.P.C. and
section 96 C.P.C. (appeal against the order/judgment) etc. Though there is no
bar to concurrently invoke more than one remedy at the same time against an
ex-parte order/judgment. However, once election or choice from amongst two or
more available remedy is made an exhausted, judgment debtor cannot ordinarily
be permitted subsequently to venture into other concurrently or coexisting
available remedies. With more certainty it was further concluded that:- Giving
choice to elect remedy from amongst several coexistent and or concurrent
remedies does not frustrate or deny right of a person to choose any remedy,
which best suits under the given circumstances but to prevent recourse to
multiple or successive redressal of a singular wrong or impugned action before
the competent forum/court of original and or appellate jurisdiction, such rule
of prudence has been evolved by courts of law to curb multiplicity of
proceedings. As long as a party does not avail of the remedy before a Court of
competent jurisdiction all such remedies remain open to be invoked. Once the
election is made then the party generally, cannot be allowed to hop cover and
shop for one after another coexistent remedies. In an illustrative case this
court in the case of Mst. Fehmida Begum v. Muhammad Khalid and others (1992
SCMR 1908) encapsulated the doctrine of election as follows:-
“However, it is one thing to concede a power
to the statutory forum to recall an order obtained from it by fraud, but
another to hold that such power of adjudication or jurisdiction or jurisdiction
is exclusive so as to hold that a suit filed in a civil Court of general
jurisdiction is barred. I am therefore in agreement with my brother that a
stranger to the proceedings, in a case of this nature has two remedies open to
him. He can either go to the special forum with an application to recall or
review the order, or file a separate suit. Once he acts to invoke either of the
remedies, he will, on the general principles to avoid a conflict of decisions,
ultimately before the higher appellate forums, be deemed to have given up and
forfeited his right to the other remedy, unless as held in Mir Salah-ud-Din v.
Qazi Zaheer-ud-Din PLD 1988 SC 221, the order passed by the hierarchy of forums
under the Sindh Rented Premises Ordinance, leaves scope for approaching the
Civil Court.”
The ratio of the above stated case has also
recently been applied by the Division Bench of the Hon’ble Lahore High in the
case titled as Daan Khan (deceased) through legal heirs Vs Assistant Collector
(Notified)[3].
In this case while deciding the Intra Court Appeal, it was observed that:
“Now a question arises as to whether after
availing the remedy for restoration of earlier constitutional petition, the
appellants could resort to the other remedy provided in Rule 4 of Order IX CPC.
Answer to this question is available in a recent judgment handed down by the
Hon’ble Supreme Court of Pakistan in the case of “Trading Corporation of
Pakistan versus Devan Sugar Mills Limited and others” (PLD 2018 Supreme Court
828) wherein it has been held that “……………………..” On the basis of said precedent
the conclusion is that the appellant’s second constitutional petition i.e.
W.P.No.104-R of 2010, giving rise to instant appeal, was not competent.”
Similarly, recently the Hon’ble Islamabad
High Court in the case titled as Rani Waseem Prop:S.S.Enterprises Vs The
Appellate Tribunal Inland Revenue etc bearing W.P.No.3319 of 2014
vide order dated 16.09.2020 it observed as follows:-
“4…….
The petitioner company by availing the remedy provided under the Ordinance of
2001 filed separate tax reference i.e Tax Reference nos.128/2014, 129/2014 and
130/2014. The said references are pending this Court. The impugned order, dated
29.01.2014, was passed by the learned Tribunal and the petition filed for
seeking rectification under section 221 of the Ordinance, 2001 was dismissed. Firstly, the rectification under section
221 of the Ordinance, 2001 could not have been filed and entertained when
remedy before this court had already been availed and secondly, since
the petition seeking rectification was dismissed, therefore, consolidated
judgment dated 02.10.2013, passed by the learned Tribunal remained unaffected.”
(Emphasis supplied”)
The aforesaid principle has also been applied
over the years in the Indian jurisdiction as well. Some of the leading cases in
this regard are discussed hereunder: -
In the case of Jai
Singh Vs Union of India and others[4],
the Apex Court held that the appellant cannot pursue two parallel remedies in
respect of the same matter at the same time. Similarly, in the case tiled as Chemech Engineers Pvt. Ltd. vs The
Director Of Industries And others[5],
observed as follows:-
"It has also been
brought in our notice that after the dismissal of the writ petition by the High
Court, the appellant has filed a suit, in which he has agitated the same
question which is the subject matter of the writ petition. In our opinion, the
appellant cannot pursue two parallel remedies in respect of the same matter at
the same time."
Keeping in view the judicial consensus on the
issue at hand, it would be safe to conclude that the appellant at the most
could select one of the remedies provided by the Statute, but it was not its
choice to avail/press one after the other or simultaneously. Thus, the answer
to the question no.(i) is in negative against the appellant.
9. As far as the second question is
concerned, we have perused the record with the assistance of the learned DR,
after due consideration, we find that no exception can be taken the treatment
as accorded by the learned CIR(A) which is found to be fair and reasonable in
the ambient circumstances of the case. The order-in-original was issued on
30.11.2017 and accordingly served upon the appellant whereas the appellant
preferred the appeal before the learned CIR(A) on 06.03.2018, more than three
months late from the date of passing the order. The learned CIR(A) has rightly
rejected the appeal on the point of limitation by observing that:-
“5. Impugned
order was passed on 30.11.2017 and instant appeal was filed on 06.03.2018 which
is very late. The AR cited the reasons for late filing appeal that
rectification applications u/s 57 of the Sales Tax Act, 1990 were moved to the
DCIR concerned which were disposed off vide letter dated 19.01.2018 and
06.02.2018 respectively, therefore, the appeal is filed against the rejection
of rectification application as well as order in original dated 30.11.2017. The
arguments advanced by the AR is not tenable judicious, under the facts &
circumstances of the case, since appeal against 2nd letter dated
06.02.2018 can only be filed for rejection of rectification application, as the
same is within the time of 30 days i.e filed on 06.03.2018. In order to ensure
maintainability of appeal against order in original dated 30.11.2017, the
appellant was required to submit an application for condoning the delay at the
time of filing the appeal to the Commissioner (Appeals) on respect of ONO and
request to entertain the appeal after expiry of period of limitation of thirty
(30) days. The application for condoning the delay, explaining the cause of
delay, should have been supported with an affidavit (a statement on oath), from
the appellant. Nothing has been done in this case, therefore, the appellant’s
appeal against order in original dated 30.11.2017 could not be accepted being
barred by time.”
It
is settled law that as far as the limitation is concerned, it does create a right
in favour of the other side and if the appeal or proceedings are time barred it
becomes the duty of the person who has approached the Court at least to submit
an application or make an explanation but in the instant case admittedly no
such effort was made knowing well by the appellant that the appeal was
hopelessly barred by time. Reliance may be placed in the case tiled as M/s
Nida-e-Millat, Lahore Vs Commissioner Income Tax[6],
relevant part of the said judgment is reproduced hereunder:-
“5. It
is to be noted that admittedly no application was moved before the Commissioner
of Income Tax for the purpose of condoning the delay. Surprisingly for the
first time before this Court an application has been filed seeking condonation
of delay, relevant para, therefrom is reproduced herein below: -
“That through the appeal
before the Commissioner of Income Tax, was within time and cannot be declared
time-barred. Still by way of abundant caution, the petitioner is submitting
this application for condonation of delay of alleged one day before the
Commissioner of Income Tax (Appeals). Although an affidavit was filed for
explaining all the circumstances and showing that the appeal is within
time.''
6. Filing of the above application at the stage itself goes to
indicate that the appeal filed before the Commissioner of Income Tax was barred
by time, therefore, the petitioner had an obligation to make an application
before the said forum and at this stage this Court in exercise of jurisdiction
under Article 185(3) of the Constitution cannot condone the delay which has
occurred in filing of the appeal before the Commissioner. Besides as far as the limitation is concerned,
it does create a right in favour of the other side and if the appeal or
proceedings are time-barred it becomes the duty of the person who has
approached the Court at least to submit an application or make an explanation
but in the instant case admittedly no such effort was made knowing well by the
petitioner that the appeal was barred by time. Therefore under these
circumstances, we are of the opinion that the High Court has rightly declined
relief to the petitioner.” (Emphasis supplied)
Under
the circumstance, the appellant had an obligation to first make an application
before the learned CIR(A) along with filing of appeal and thereafter, he could take
an alternative plea, according to him, that the order passed by the DCIR was
void ab-initio and without jurisdiction and therefore, limitation does not
attract against void order. Admittedly, nothing has been done in this case,
therefore, we find no reason to disturb the order passed by the learned CIR(A).
Thus, the answer to the second question is also in negative and against the
appellant.
10. For complete justice, we have also considered
the contention of the learned AR that according to him, the order in original
passed by the Assessing Officer is void ab-initio and without jurisdiction and therefore,
limitation does not attract against void order. This ground is misconceived and
not tenable. Firstly, we have seen the jurisdiction order dated 25.10.2017
issued by the Commissioner Inland Revenue, Zone-I, CRTO, Karachi according to
which the case of the appellant squarely falls within the jurisdiction of the
DCIR, E&C Unit-02, Zone-I who has issued the show cause notice and passed
the order in original. Thus, the order in original was passed well within the
jurisdiction of the Assessing Officer and there is no infirmity in the said
order. Notwithstanding the aforesaid, the contention of the learned AR that
limitation does not attract against void order is also flawed. The dissension
and divergence of opinion between different Benches of the Hon’ble Supreme
Court of Pakistan has been laid to rest by a fourteen member Bench of the
Hon’ble Supreme Court of Pakistan in a case reported as Gen.(R.) Parvez Musharraf
versus Nadeem Ahmed (Advocate) and another.[7]
It has emphatically been laid down by the Supreme Court of Pakistan that
limitation runs against void orders, too, and did not endorse the view that
void orders are free from the shackles of law of limitation. It was held that:-
“The contention that the delay be
condoned since the petitioner was not heard or that the judgment on that count
is void ab initio and that no limitation runs against a void order is not
tenable because even against a void order, limitation would run and would be
computed from the date of knowledge. In Muhammad Raz Khan v. Government of
N.W.F.P. (PLD 1997 SC 397), this Court specifically adverted to the question
whether a party can be extended indulgence which pleads that the order was not
challenged in time as it was void. In Messrs Blue Star Spinning Mills v.
Collector of Sales Tax (2013 SCMR 587), this Court clearly held that the rule
that no limitation runs against a void order is not an inflexible rule that a
party cannot sleep over to challenge such an order; that it is bound to do so
within the stipulated/prescribed period of limitation from the date of
knowledge before the appropriate forum. It has never been petitioner’s plea
that he did not have the knowledge of the impugned judgment. Even otherwise it
has been admitted by petitioner’s learned counsel that one Maulvi Iqbal Haider
had filed a constitution petition bearing No.454 of 2010 wherein he had sought
trial of the petitioner in view of the judgment of this Court in Sindh High
Court Bar Supra. But the said petition was disposed of with a direction that
the petitioner should approach this Court. Maulvi Iqbal Haider thereafter filed
Civil Petition No.2255 of 2010 before this Court. It remained pending for2-1/2
years and no order was passed for trial of the petitioner and eventually on
03.07.2013 a Bench of three Judges disposed of the petition whereafter Special
Tribunal was constituted to try the petitioner. For two to three years, the
question of petitioner’s trial in the light of the judgment of this Court in
Sindh High Court Bar Supra remained pending either before the High Court of
Sindh or before this Court but petitioner never filed any application for
review of the judgment. This conduct is reflective of an element of contumacy
which does not warrant indulgence in review jurisdiction. The reliance of
learned counsel for the petitioner on two judgments of this Court wherein
limitation of many years was condoned would be of no avail as the facts and
circumstances of those cases are distinct. In Federation of Pakistan, v. Mian
Muhammad Nawaz Sharif (PLD 2009 SC 644), petitioner Muhammad Nawaz Sharif had
sought review of a three member judgment of this Court whereby he was
disqualified to contest the elections without hearing him. While condoning the
delay in filing the review petitions, the Court had taken note of the
circumstances under which initially the said review petitioner was restrained
from returning to this country and thereafter on account of removal of Judges
of the Supreme Court and High Courts pursuant to imposition of State of
Emergency 2007, he and those of his party men who were contesting General
Elections of 2008 had made a public Oath that they would not appear before the
Supreme Court till the lawful judiciary was restored.”
We
are bound by the larger bench judgment of the Supreme Court of Pakistan as the
laying down the law, on the issue in hand.
11.
For what has been discussed above, the
appeal of the appellant is dismissed being devoid of merits.
12. This order consists of (15) pages and each
page bears my signature.
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