MESSRS EVICRETE LIMITED VS CUSTOMS, CENTRAL EXCISE AND SALES TAX APPELLATE TRIBUNAL (KARACHI BENCH)
2002 P T D 403
[Karachi High Court]
Before Dr. Ghous Muhammad and Mushir Alam, JJ
Messrs EVICRETE LIMITED through Chairman
versus
CUSTOMS, CENTRAL EXCISE AND SALES TAX APPELLATE TRIBUNAL (KARACHI BENCH) and others
Constitutional Petition No.817 of 1999, decided on 03/05/1999.
Sales Tax Act (VII of 1990)---
----S.46(4)---Constitution of Pakistan (1973), Art. 199(4A)-- Constitutional petition---Recovery of revenue---Interim order passed by person other than the High Court---Provision of Art.199(4A) of the Constitution of Pakistan (1973)---Applicability---Constitutional provision contained in Art.199(4A) is only attracted when an interim order is passed by the High Court in its jurisdiction under Art.199 inter alia, in revenue matters and has no application to the interim orders by any other forum.
Makhdoom Ali Khan for Petitioner.
Naim-ur-Rehman, Deputy Attorney-General for Respondents.
Date of hearing: 3rd May, 1999.
JUDGMENT
DR. GHOUS MUHAMMAD, J.---The petitioner has prayed in this Constitutional Petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 for the following reliefs:---
"(1) Quash the order, dated 15=5-1999 passed by the respondent No. l to the extent that it calls upon the petitioner to pay 50% of the principal amount and subjects the lifting of the embargo to the payment of such amounts as well as the order dated 6-4-1998 passed by the respondent No.4 and declare that the order dated 18-9-1998 passed by the respondent No. l is valid and subsisting.
(2)Grant such other relief which this Hon'ble Court deems just and proper in the circumstances of the case.
(3)Grant costs."
The petitioner had received show-cause notice on 2nd June, 1999 issued by the Additional Collector-II Collectorate of Sale Tax (East). It would be advantageous to reproduce the following observations in the said show-cause notice:---
"Whereas the aforesaid SRO (SRO 846(1)/94) being time bound was applicable only for the financial year 1994-95 and thus had no legal effect after 30-6-1995. The registered person was therefore, required to switch over to the standard rate of sales tax which remained 15% of the sales value till 30-6-1996 and increased to 18% with effect from 1-7-1996 to March, 1997 and then reduced to 12.5 % with effect from April, 1997 to date. They were required to issue proper sales tax invoices prescribed under section 23 of the Sales Tax Act, 1990, against sales of their goods. On the other hand they unlawfully. continued the practice of paying fixed amount of sales tax invoices prescribed tinder section 23 of the Sales Tax Act 1990."
The petitioner submitted reply to the said notice on 22-6-1998and it was brought to the notice of the respondents that SRO No.846(1)/94 was not rescinded and the same was still valid. It was further pointed out that contrary to the allegation in the show-cause notice SRO 846(1)/94 is not a timebound notification. According to the petitioner the said notification clearly provides that the rate fixed in the table therein will be applicable during the year 1994-95 to such person who had paid Sales Tart up to Rs.45,000.00 during the year 1993-94 under the fixed tax scheme. However, allegedly by order in Original No.26/1998, dated 27-6-1998, the respondent No-3 (Additional Collector-11) Government of Pakistan Collectorate of Sales Tax East enforced the demand of Rs.2,15,40,003 additional tax amounting to Rs.1,9,10,341 surcharge of Rs.3,29,935 and a penalty of Rs.1,00,000.
In these circumstances, the petitioner preferred an appeal against the aforesaid order before the respondent No.2 on 13-7-1998. However this Appeal (No.542/98) was dismissed by the said respondent on August 26, 1998. Since the respondent No.1 the (Appellate Tribunal) was not functioning at the relevant time when the appeal was filed, the petitioner filed an application before the Customs, Excise and Sales Tax, Appellate Tribunal (Lahore Bench) and obtained stay order on 18' September, 1998. Subsequently the stay application as well as the main appeal were heard, but so far no final order has been passed. However vide letter dated 27-3-1999, the Recovery Officer, Office of the Assistant Collector, Enforcement and Collection, informed the petitioner that the interim order had expired by virtue of Article 199(4A) of the Constitution of Pakistan, 1973, read with the judgment of the Hon'ble Supreme Court dated March, 1999 passed in C.A. No.702/99, and the petitioner was asked to pay up the alleged demand. It would be advantageous to reproduce the letter of the Recovery Officer, which reads as under:
GOVERNMENT OF PAKISTAN
OFFICE OF THE ASSISTANT COLLECTOR,
ENFORCEMENT & COLL. A-40, AKHTAR
PLAZA BLOCK 7 & KCHS
KARACHI
No.6(686) Envt/Circle-II/98Dated the 27th March, 1999.
Messrs Envicrete Limited,
F1-10, World Trade Centre,
Khayaban-e-Roomi,
K.D.A. Scheme No.5.
Clifton, Karachi.
Sub:Recovery of outstanding arrears of Rs.27
Whereas Messrs Envicrete Limited filed an appeal against the Order-in-Appeal with the Appellate Tribunal and whereas the Appellate Tribunal vide order, dated 18-9-1998 stayed the recovery proceedings till the Karazhi Bench disposes of the interim application. The interim stay order has expired with the afflux of six months in Revenue matters under the provisions of Clause (4A) Article 199 of the Constitution of Islamic Republic of Pakistan read with judgment, dated 18-3-1999 passed by the Honourable Supreme Court of Pakistan in Civil Appeal No.702 of 1995 and several other civil appeals relating to the operation of Article 199(4A) of the Constitution.
Messrs Envicrete limited, are, therefore, relied to make payment of the abovementioned amount forthwith in view of the Constitutional provisions read with judgment; dated 18-3-1999 passed by the Honourable Supreme Court of Pakistan, failing which necessary legal action as provided under the Sales Tax Act, 1990, read with Recovery Rules, 1992 shall be initiated without any further notice.
(KHALIL YUSUFANI),
RECOVERY OFFICER.
The petitioner sent reply on April 1, 1999 through their Consultant to the Recovery Officer pointing out that orders passed by the Appellate Tribunal under subsection (4) of section 46 of the Sales Tax Act, 1990, do not fall within the purview of proceedings/cases decided by the Hon'ble Supreme Court, and Article 199(4A) of the Constitution was applicable to stays granted by the High Court in its writ jurisdiction in, inter alia, Revenue matters. This was followed by hearing of appeal as well as stay application by a Bench comprising two Members (Judicial and Technical) and" the matter was listed for hearing the final arguments. But again the matter was adjourned for further arguments. On April 6, 1999 the petitioner was served with notice under section 48 of the Sales Tax Act, 1990 by the respondent No.4 imposing embargo on the clearance of goods from the petitioner's factory with further directions not to sell, mortgage, charge, lease or otherwise deal with all movable and immovable properties owned by it. Ultimately on May 15, 1999 the part heard appeal came up for hearing and-instead of disposing of the entire appeal the respondent No.1 passed the following order:
"By order separately written and filed the appellant is directed to pay 50% of the principal amount in three equal instalments and furnish the indemnity bond for the remaining amount to the satisfaction of the Collector concerned. In the mean while the case be referred to Central Board of Revenue for processing under section 65 of the Sales Tax Act, 1990. The C.B.R. is directed to decide the matter under section 65 within three months without fail. The embargo is lifted subject to payment of first instalment shall be paid on the 30th day from the payment .of second instalment. Order accordingly.
The appeal to come for the date in office."
It is the case of the petitioner that it was not in a position t : pay the aforesaid amount, therefore the order imposing the embargo, 4;assed by the respondent No.4 is unlawful and without jurisdiction.
We heard learned counsel for the petitioner, the learned D.A.-G. and perused the record. It was frankly conceded by the learned D.A.-G. that Article 199(4A) of the Constitution has no application to the interim orders passed by the Appellate Tribunal: This Constitutional provision is only attracted when the interim order is passed by the High Court in its jurisdiction in, inter alia, the Revenue matters. Therefore it is declared that the order, dated March 27, 1999 of the respondent No .4 is void. It is reiterated that the judgment passed by the Hon'ble Supreme Court does not relate to the interim order passed by any forum, other than the High Court in its writ jurisdiction. In the order, dated 15-5-1999 (supra) passed by the respondent No. 1 in the opening lines, it is mentioned "by order separately written and filed the appellant is directed". When we inquired from the learned D.A.-G. about the separate order, he on instructions made statement that the order is still being prepared although from a plain reading of the above lines it appears that separate order was written and filed and then this order was passed regarding payment of 50% of the assessed amount in three equal instalments etc. In these circumstances, the short order is set aside and by consent it is ordered that the respondent No.1 should dispose of the appeal within a month from the receipt of this order after giving reasonable chance of hearing to the parties. With these observations this petition stands disposed of.
H.B.T./E-12/K Order accordingly.