DEPUTY COLLECTOR SALES TAX VS COLLECTOR, EXCISE AND SALES TAX, 2002 PTD-LAHORE-HIGH-COURT-LAHORE 2570 (2002)

(a) Sales Tax Act (VII of 1990)---

----Ss.1(2) & 46---Customs Act (IV of 1969), S.194C(5)---Central Excises Act (I of 1944), Ss. 35B & 35D---Appellate Tribunal-- Difference of opinion between Members of the Appellate Tribunal-- Procedure---Provisions of S.194C(5) of the Customs Act, 1969 provided that a reference to Chairman of the Tribunal for referring the matter to a third Member could not have been made by the Member without recording the point or points on which they differed---Such points were required to be formulated in order to identify the exact nature and extent of difference of opinion between the Members---Formulation of these points were in the nature of issues framed in civil suits bringing out the material proposition of law or fact on which the Members had differed---On formulation of all these points which had to be by agreement of the Members and signed by them the matter was to be submitted to the Chairman "for hearing on such point or points by one or more of the other Members of the Tribunal"---Once this had been done and the third Member had heard the parties and expressed his opinion the point or points were to be decided in accordance with the opinion of the majority---Final result or decision in accordance with opinion of the majority was to be recorded and signed by all the members who had heard the case.

(b) Sales Tax Act (VII of 1990)---

----Ss.1(2) & 46---Customs Act (IV of 1969), S.194C(5)---Central Excises Act (I of 1944), Ss.35B & 35D---Appellate Tribunal- Difference of opinion between Members of the Appellate Tribunal-- Recording of order by the Chairman without hearing the .parties-- Validity---Reference was made to the Chairman for appointment of a third Member to hear the case without stating the points which was not in accordance with law---Third Member had recorded his agreement on certain points on which he believed that his colleagues had differed---Order of the Tribunal ought to have been signed by the three Members---Chairman who had not heard the parties at any stage could not record the order of the Tribunal---Recording of order of the Tribunal by Chairman alone and particularly when he had spot heard the parties was alien to the practice and procedure of any judicial forum comprising more than one Member---Chairman of Tribunal was primus interpares which means first amongst equals---Except for his privilege to constitute Benches he was simply another Member of the Tribunal and had no precedence over any other Member in that capacity---While being a Member of Bench his judgment or decision was only that of a Member and nothing more---Member of the Tribunal who had not heard the parties could not subscribe a single word to the judgment muchless recording the order of the Tribunal without participation of the Members who had in fact heard the parties---In view of S.194C(5) of the Customs Act, 1969, the failure on the part of the Members to formulate points resulted in a material irregularity---After recording of opinion by the third Member the recording of order of the Tribunal by the Chairman had rendered the order to be non-existent in law---Order was set aside by the High Court with the direction that appeal shall be deemed pending before the Tribunal which will proceed from the stage the Judicial Member and Member (Technical) differed---Said Members will formulate the point or points on which they differed and send the case to Chairman for referring the matter to a third Member (including the Chairman himself as a Member (Judicial))---After the three Members have recorded their opinion an order of the Tribunal shall be formulated and signed by all the three Members who had heard the parties.

Ch. Muhammad Hussain for Appellant.

M. M. Akram for Respondent.

ORDER

NASEEM SIKANDAR, J.---Section 194 of the Customs Act, 1969 provides for constitution of an Appellate Tribunal by the Federal Government to be called the Customs, Excise and Sales Tax Appellate Tribunal. Section 194-A contains provisions for appeal to the Tribunal while section 194-C states its procedure.

The Tribunal is also an appellate forum under section 46 of the Sales Tax Act, 1990 read with definition of the `Appellate Tribunal" as contained in subsection (1) of section 2 thereof. Likewise section 35-B of the Central Excises Act, 1944 provides for appeal to the Tribunal while section 35-D prescribes the procedure of the Tribunal. The procedure prescribed in the Customs Act, 1969 as also the Central Excises Act, 1944 is identical when the Members of a Bench differ in the opinion.

2. The Sales Tax Act, 1990 does not by itself contain any provision with regard to the procedure of the Tribunal. However, the appeal provisions read with subsection (2) of section 1 of the Sales Tax Act. 1990 make it clear that the Appellate Tribunal in matters of Sales Tax Act, 1990 as well will be the one constituted under section 194 of the Customs Act. As a natural corollary the Tribunal constituted under that section will follow the procedure contained in section 194-C in the Customs Act.

3. In case of difference of opinion between the Members sub -section (5) of section 194-C provides as under:--

"If the members of a Bench differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, but if the members are equally divided. they shall state the point or points on which they differ and the case shall be referred by the Chairman for hearing on such point or points by one or more of the other members of the Appellate Tribunal, and such point or points shall be decided according to the opinion of the majority of the members of the Appellate Tribunal who have heard the case including those who first hear it:

Provided that where the members of a Special Bench are equally divided the points on which they differ shall be decided by the Chairman. " (Emphasis supplied).

4. In the case in hand an appeal filed by Messrs Pioneer Cement Limited, Chanki, District Khushab was heard by Mr. Zafar ul Majeed, Member (Technical) and Mian Abdul Qayyum, Member (Judicial). The order was initiated by Member (Technical) who proposed the dismissal of the appeal. However, the learned Member (Judicial) disagreed and added his note proposing that the appeal should be accepted and the impugned order should be set aside. Thereafter without recording the point or points on which they differed the learned members sent the case to learned Chairman who referred the matter to Mr. Masud Ahmad Daher, Member (Technical). The referee member appears to have agreed with the learned Member (Judicial) holding that the appellants were liable to pay sales tax only on "sales" which actually took place and not on the payment/receipts on any advance amount. Thereafter the learned Chairman on 22-10-2001 recorded the "final order of the -ribunal" as under: --

"Vide order dated 6-10-2001 I had referred this appeal to Mr. Masood A. Daher, learned Member (Technical) of Islamabad Bench-II of this Tribunal for his third and decisive opinion to resolve difference of opinion between Member (Judicial) and Member (Technical) of Lahore Bench-II.

(2)Mr.Masood A. Daher, Member (Technical) of Islamabad Bench-II, has vide his judgment, dated 15-10-2001 agreed with the views of Member (Judicial) of Lahore Bench-II, who in his dissenting note, dated 5-10-2001 suggested the acceptance of appeal and setting aside the impugned order as against the findings of the learned Member (Judicial), who in his proposed judgment suggested the dismissal of appeal, I in view of the majority opinion direct that the appeal is accepted and the impugned order of the latter forum is set aside." (Emphasis supplied).

(3) In the light of provisions of subsection (5) of section 194-C of the Customs Act, 1969 a reference to learned Chairman for referring the matter to a third Member could not have been made by the learned Member without recording the point or points on which they differed. These points are required to be formulated in order to identify the exact nature and extent of difference of opinion between the Members. The formulation of these points is in the nature of issues framed in civil suits bringing out the material proposition of law or fact on which the learned Members had differed.

On formulation of all these points which has to be by agreement of the Members and signed by them the matter is submitted to the learned Chairman "for hearing on such point or points by one or more of the other Members of the Tribunal". Once this has been done and the third Member has heard the parties and expressed his opinion the point or points are to be decided in accordance with the opinion of the majority. The final result or decision in accordance with the opinion of the majority is to be recorded and signed by all the Members who had heard the case.

(4) In, the present case, as noted above, a reference was made to the Chairman for appointment of a third Member to hear the case without stating the points which was not in accordance with law. Secondly, after the third Member had recorded his agreement on certain points on which he believed that his colleagues had differed the order of the Tribunal ought to have been stated by the three Members. The learned Chairman who had not heard the parties at any stage could not record the order of the Tribunal. The recording of order of the Tribunal by Chairman alone and particularly when he had not heard the parties is alien to the practice and procedure of any judicial forum comprising more than one Benches. The Chairman of Tribunal is primus interpares which means first amongst equals. Except for his privilege to constitute Benches he is simply another member of the Tribunal and has no precedence over any other Member in that capacity. While being a Member of a Bench his judgment or decision is only that of a Member and nothing more. A Member of the Tribunal who has not heard the parties cannot subscribe a single word to the judgment much less to say of recording the order of the Tribunal without participation of the members who had in fact heard the parties. "

5. In view of the provisions of subsection (5) of section 194-C, the failure on the part of the learned members to formulate points resulted in a material irregularity. However, after recording of opinion by the third Member the recording of order of the Tribunal by the learned Chairman had rendered the order to be non-existent in law:

6. Accordingly for this reason alone, the impugned order is set aside. The appeal shall be deemed pending before the Tribunal which will proceed from the stage the learned Judicial Member and Member (Technical) differed. They will formulate the point or points on which they differed and send the case to learned Chairman for referring the matter to a third Member (including the Chairman himself as a Member (Judicial)), After the three Members have recorded their opinion an order of the Tribunal shall be formulated and signed by all the three Members who have heard the parties.

7. Appeal disposed of in the above terms.

C.M.A./M.A.K./D-36/L

Appeal disposed of.