APPELLATE TRIBUNAL INLAND
REVENUE, DIVISIONAL BENCH,
ISLAMABAD
STA No.482/IB/2021
(Tax Periods Jan. 2014 to Dec. 2015)
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M/s Warid Telecom (Pvt) Ltd. 1-A, IBC Building,
F-8 Markaz, Islamabad. |
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Appellant
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VS |
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Commissioner Inland Revenue LTO, Islamabad. |
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Respondent |
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Appellant
by: |
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Mr. Mansoor Saeed, FCA |
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Respondent
by: |
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Mr. Imran Shah, DR |
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Date
of hearing: |
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28.02.2022 |
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Date
of order: |
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04.03.2022 |
O R D E R
M. M.
AKRAM (Judicial Member): - The titled sales tax
appeal has been filed by the appellant/registered person against the Sales Tax
Order in Appeal No.03/2021 dated 29.10.2021 passed by the Learned Commissioner
Inland Revenue (Appeals-I), Islamabad for the tax periods January 2014 to
December 2015 on the grounds as set forth in the memo of appeal.
2. Briefly
facts culled out from the record are that as per the audit observation of
DGRRA, the appellant made a Sale of Fixed Assets aggregating Rs.965,365,000/-[T.Y
2016 Rs.502,761,000, T.Y 2015 Rs.462,604,000] as per cash flow statement filed
for the tax years 2015 and 2016. According to section 3(1) of the Sales Tax
Act, 1990 (“the Act”) read with the decision of the Supreme Court of
Pakistan dated 5th March 2007, (PTCL 2007 CL 565) sales tax
amounting to Rs.164,112,050/-(17% of Rs.965,365,000) was recoverable from the
appellant registered person on account of the disposal of fixed assets. On the
aforesaid basis, a show-cause notice dated 10.06.2019 was issued to the
appellant and culminated by passing the Order-in-Original No.05/102/2019 dated
21.10.2019. Feeling aggrieved of the assessment of the adjudicating authority,
the appellant preferred the appeal before the Commissioner IR (Appeals-1),
Islamabad wherein it was contended that the adjudged demand of sales tax
against the disposal of fixed assets also includes supplies that are exempt
from sales tax. A further certain amount of sales tax has already been
deposited vide sales tax returns against proceeds from the disposal of fixed assets.
Considering the submissions and record, the appellate authority, therefore, had
remanded the case to the assessing officer vide order-in-appeal No.19/2019
dated 26.12.2019 with the following directions: -
“
….. the case is remanded back with the direction to obtain the relevant
evidence from the appellant and on the basis of facts so ascertained action be
taken as per law.”
In
consequence of and to give effect to the directions given by the appellate
authority, the assessing officer issued the notices to the appellant and after
considering the submissions of the appellant, relying upon the judgment of the
Hon’ble Supreme Court reported as PTCL 1997 565 on the issue, passed
a speaking order creating thereby a tax demand of Rs.139,061,976/- besides
penalty and default surcharge vide order dated 12.06.2021. Felt aggrieved, the
appellant registered person filed an appeal before the learned Commission Inland
Revenue (Appeals-I), Islamabad who decided the appeal of the registered person
vide Sales Tax Order in Appeal No.03/2021 dated 29.10.2021. Being aggrieved,
the appellant registered person has now come up before this forum and assailed
the impugned order on a number of grounds.
3. The titled appeal came up for hearing on
28.02.2022. Learned AR reiterated the contentions already submitted in the
grounds of appeal as set forth in the memo of appeal. Almost all these grounds
are duly incorporated in the impugned appellate order. On the other hand, the learned DR opposed the
appeal on the ground that the learned Commissioner (Appeals) has passed a
speaking order and there is no illegality or lacuna in his order.
4. We have considered
the rival submissions carefully and have gone through the relevant material on
record. Admittedly, the original assessment order was
passed on 21.10.2019 under section 11 of the Act. Aggrieved with this order,
the appellant registered person preferred the appeal before the first appellate
authority who vide Order-in-Appeal No.19/2019 dated 26.12.2019 remanded the
case back to the assessing officer with the following directions: -
“
….. the case is remanded back with the direction to obtain the relevant
evidence from the appellant and on the basis of facts so ascertained action be
taken as per law.”
Although,
in terms of subsection (3) of section 45B of the Act, the Commissioner Inland
Revenue (Appeals) has no power to remand the case for de novo
consideration yet admittedly both the parties have not filed the appeal before
this Tribunal against the aforesaid appellate order. Therefore, the order
passed by the first appellate authority has attained finality. Consequently, to
give effect to the direction given by the learned CIR(A), the assessing officer
passed the appeal effect order dated 12.06.2021 which was the subject matter of
appeal before the learned CIR(A) and now before this tribunal along with the
impugned appellate order. After considering the grounds of appeal and the
arguments advanced by the parties, the following question emerges from the
record for determination: -
i.
Whether the order dated 12.06.2021
passed by the Assessing Officer in consequence of or to give effect to the
direction given by the learned CIR(A) come within the ambit of sections 11(2)
or 11B of the Sales Tax Act, 1990?
If
the answer to the above question is that the order passed by the assessing officer
falls in the ambit of section 11B of the Act then:
ii.
Whether the appeal lies
against the order passed under section 11B of the Sales Tax Act, 1990 before
the Commissioner IR (Appeals) under section 45B of the Sales Tax act,
1990?
5. We find that before the insertion
of section 11B of the Act through Finance Act, 2018, no particular procedure
was available in the Act or Rules to carry out the appeal effect. Wherever no
particular procedure has been given in the Act or Rules then naturally the
authorities have to adopt a procedure or practice, which is practical, adheres
to well-settled legal principles, and does not cause prejudice to the
registered person/taxpayer or the Government. We think, to render justice one
of the basic principles in the administration of justice in our country where the
hierarchy of Courts is existing, it is mandatory on the subordinate Tribunals
or authorities to carry out the directions given to them by the superior
authorities or Tribunals in the exercise of appellate powers. Failing to do so
will result in chaos in the administration of justice. No doubt to carry out
the instructions of the superior authorities there has to be the existence of
valid order by superior authorities giving unambiguous direction to the
inferior authorities. However, a significant change was brought in the statute
by insertion of section 11B of the Act vide Finance Act, 2018 that contemplates two scenarios viz., (i) where, in consequence of,
giving effect to, any finding or direction in any order made under Chapter-VIII
by the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court
order of assessment is to be issued and (ii) making of a new order of assessment
pursuant to appellate orders that have been remanded wholly or partly by the
Appellate Tribunal, High Court or Supreme Court. For
convenience, sections 11(2) and 11B of the Act are reproduced below: -
“11. Assessment of Tax & Recovery of Tax not levied or short
levied or erroneously refunded.– (1) ………………..
(2) Where a person has not paid the tax due on supplies made by him
or has made short payment or has claimed input tax credit or refund which is
not admissible under this Act for reasons other than those specified in
sub-section (1), an officer of Inland Revenue shall after a notice to show
cause to such person, make an order for assessment of tax actually payable by
that person or determine the amount of tax credit or tax refund which he has
unlawfully claimed and shall impose a penalty and charge default surcharge in
accordance with sections 33 and 34.
11B. Assessment giving effect to an
order.– (1) Except where subsection (2) applies, where,
in consequence of, or to give effect to, any finding or direction in any order
made under Chapter-VIII by the Commissioner (Appeals), Appellate
Tribunal, High Court or Supreme Court an order of assessment of tax is to be
issued to any registered person, the Commissioner or an officer of Inland Revenue
empowered in this behalf shall issue the order within one year from the end of
the financial year in which the order of the Commissioner (Appeals), Appellate
Tribunal, High Court or Supreme Court, as the case may be, was served on the
Commissioner or officer of Inland Revenue.
(2) Where, by an order made under
Chapter-VIII by the Appellate Tribunal, High Court or Supreme Court, an order
of assessment is remanded wholly or partly and the Commissioner or Commissioner
(Appeals) or officer of Inland Revenue, as the case may be, is directed to pass
a new order of assessment, the Commissioner or Commissioner (Appeals) or
officer of Inland Revenue, as the case may be, shall pass the new order within
one year from the end of the financial year in which the Commissioner or
Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is
served with the order:
Provided that limitation under this
subsection shall not apply if an appeal or reference has been preferred against
the order passed by Appellate Tribunal or a High Court.” (Emphasis supplied)
It can be seen from the bare reading of the above provisions of the law
in a juxtaposition, particularly subsection (1) of section 11B of the Act, it
clearly suggests that the case of the appellant squarely covers in section
11B(1) ibid. Thus, the assessing officer had rightly in consequence of and to
give effect to the findings of the learned CIR(A) vide order dated 26.12.2019, initiated the proceedings and ultimately passed the appeal effect order
under section 11B of the Act within the stipulated time. We have noted that the
assessing officer while passing the appeal effect order has wrongly mentioned
section 11(2) of the Act. However, it is settled law that wrong mentioning of
the section does not vitiate the proceedings. For the foregoing reasons, the
answer to question No. (i) is that the order
passed by the assessing officer falls in the ambit of section 11B of the Act.
6. Now, we turn to the second
question, to have an effective appreciation and analysis on
the subject matter, it will be better to have a survey of the relevant
provisions in the Act and the Rules. Section 45B of the Act provides the right
of appeal to the aggrieved person which read as under: -
“45B. Appeals: - (1) Any person, other than the Sales Tax Department,
aggrieved by any
decision or order passed under sections 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): …………………….”(Emphasis
supplied)
It
can be seen from the plain reading of the above provisions of law that any
decision or order passed under a specific provision
stipulated in sub-section (1) of section 45B of the Act are appealable
before the Commissioner Inland Revenue (Appeals) and the right of appeal to the
person is available to such extent only and not more than that. Section 11B
does not find mentioned in the sub-section (1) of section 45B ibid and
therefore, the legislature in its own wisdom has not provided the remedy to the
person against the order passed by the Assessing Officer under section 11B of
the Act. It is an immutable principle of law that appeal cannot be claimed as a
right unless provided by the statute. Language of sub-section (1) of section
45B of the Act clearly and expressly excludes the right of appeal to the
taxpayer. The Hon'ble Supreme Court of Pakistan in its judgment titled Mughal
Surgical (Pvt.) Ltd. and others v. Presiding Officer, Punjab Labour Court No.7
and other (2006 SCMR 590) has held that appeal is not a natural or
an inherent right of litigants but is a statutory right granted by different
laws by different enactments. In Muzaffar Ali v. Muhammad Shafi (PLD
1981 SC 94) it is held that the right of appeal can only be availed if it
is granted by law. In a judgment cited as Malik Umar Aslam v. Mrs. Sumaira Aslam
and others (2014 SCMR 45), the Apex Court has re-emphasis the
principle that “appeal is a statutory
right that can only be exercised if the statute has provided so as a matter of
right.”
7. In the
instant case, as discussed above, the appeal effect order was passed on 12.06.2021
by the Assessing Officer under section 11B of the Act which was subsequently
assailed by the appellant before the learned CIR(A) under section 45B of the
Act. As stated above, no statutory right of appeal was available to the
appellant under the aforesaid provisions of law and as such the learned CIR (A)
has erred in law in entertaining and deciding the appeal of the registered
person under section 45B ibid. Therefore, the order passed by the learned
CIR(A) is annulled and the order passed by the assessing officer under section
11B of the Act is restored. As a result, the appeal of the appellant is
dismissed being not maintainable under the law. Accordingly, the answer to
question No. (ii) is in the negative.
8. This order consists of (07) pages and each
page bears my signature.
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Sd/- (M. M. AKRAM) JUDICIAL
MEMBER |
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Sd/- (MUHAMMAD IMTIAZ) 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.
(M. M. AKRAM)
JUDICIAL
MEMBER
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