COLLECTOR OF SALES TAX, FAISALABAD VS Messrs COCA COLA BEVERAGES PAKISTAN LTD., FAISALABAD, 2005 PTD-LAHORE-HIGH-COURT-LAHORE 1984 (2005)

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

---S. 47(1)-Appeal to High Court---Tribunal maintaining charges against registered person for reasons earlier weighed with Adjudicating Authority---Absence of solid reasons to challenge such findings---No case was made out for interference.

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

----S. 47(1)---Appeal to High Court---Plea not raised before_, Tribunal could not be entertained by High Court.

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

----S. 47(1)---Appeal to High Court---Plea raised before High Court based upon consideration of evidence---Such plea neither ruled upon by Tribunal nor agitated by registered person---Effect---No question of law in such regard could be said to have arisen out of impugned order of Tribunal.

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

----S. 47(1)---Appeal to High Court---Issue pertaining to factual aspects of case---Validity---No question of law would arise therefrom.

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

----Ss. 33, 34 & 46---Power of Appellate Tribunal to remit, reduce or delete amount of penalty and additional tax---Scope---Tribunal had jurisdiction to waive or remit additional tax or penalty in the face of provisions of S.34 of Sales Tax Act, 1990 even after amendment and insertion of word "shall" in subsection (1) thereof---Provisions of S.46 of Sales Tax Act, 1990 were neither governed nor controlled by provisions of Ss. 33 and 34 thereof---Imposition of penalty and additional tax with reference to such provisions would not at all be sacrosanct for appellate forums including Tribunal---Principles.

Messrs Millat Tractors Ltd., Lahore v. Collector of Sales Tax and Central Excise Lahore 2000 PTD 1445 fol.

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

----Ss. 33 & 34---Penalty or additional tax should not invariably be imposed only for the reason that it is legal to do so.

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

----S. 47(1)---Appeal to High Court---Exercise of discretion by Tribunal for valid reasons to remit additional tax and penalty---Validity---No question of law could be said to have arisen out of impugned order.

A. Karim Malik for Appellant.

Nemo for Respondent.

Date of hearing: 30th March, 2005.

JUDGMENT

NASIM SIKANDAR, J.---These cross appeals (C.A. 568 of 2002 & S.T.A. 56 of 2003) respectively filed by the Revenue as well as Messrs Coca Cola Beverages Pakistan Limited, Faisalabad, a registered person engaged in bottling of Coca Cola brand of soft drinks assail an order recorded by the Customs, Excise and Sales Tax Appellate Tribunal, dated 16-9-2002.

2. Messrs Coca Cola, appellant in S.T.A. No.56 of 2003 and respondent in C.A. No.568 of 2002, was served with a show-cause notice on alleged excess consumption of concentrate, free of costs supplies/samples, supplies of store items without payment of sales tax, short payment of sales tax at the rate less than retail price, incorrect adjustment of input tax on utility bills, input tax adjustment of a wrong period, claim of input tax twice, claim of input tax without invoice and difference in stock as per excise record. In the adjudication proceedings that followed Deputy Collector (Adjudication), Faisalabad found the manufacturer/registered person to be liable on various counts, summarized by the learned Tribunal in the impugned order as under:

"(1) Without specifying the period assessed wastage of concentrates in preparation of soft drinks at 2% and calculated the appellants' tax liability at Rs.131395 along with additional tax.

(2) Disbelieving the plea of the appellants that they had returned 20665 cases of beverages to Lahore and Gujranwala bottlers, which they had taken on loan from them and did not charge sales tax for that reason, asked them to pay the evaded sales tax of Rs.574034 along with additional tax.

(3) Disapproved supply of juice below the fixed retail price after adjusting input tax at the higher value and asked the appellants to pay Rs.136003 as evaded amount of sales tax along with additional tax.

(4) On their failure to produce electricity and gas bills from June, 1999 to April, 2000 the appellants were disallowed adjustment of the amount of input tax of this period and they were asked to pay Rs.569186 as evaded sales tax along with additional tax.

(5) Accepting input tax adjustment out of the tax period as procedural error on the basis of a decision of this Tribunal, he imposed on the appellants only a penalty of Rs.9800.

(6) For claiming adjustment twice of the same input tax amount the appellants were asked to pay an amount of Rs.4053 to the department along with additional tax.

(7) For discrepancy of closing stock in the stock register and central excise record the appellants were asked to pay Rs.19010 along with additional tax."

3. By way of the impugned order the learned Tribunal found that the Adjudicating Officer was not justified in assessing the liability of the registered person, on the basis of wastage ratio of the concentrate at 2%. Accordingly his findings to that extent were set aside. Rest of the six charges as enumerated in the impugned order and reproduced above were upheld. Also the liability of the manufacturer/registered person of paying additional tax on various counts was remitted beyond 1/4 while the penalties were remitted in toto.

4. Feeling dissatisfied with the impugned order both the Revenue as well as the registered person have filed cross-appeals, The manufacturer/registered person complains against maintaining of six charges by the Tribunal while the Revenue asserts that the learned Tribunal was not justified in reducing the additional tax liability of the manufacturer/registered person while it had earlier maintained its liability to pay sales tax to the extent of Rs.13,02,276. The remission of penalties is also agitated. It is also alleged, that the learned Tribunal committed an error in law to remit the liability of the respondent/ registered person to pay sales tax on the basis of wastage ratio at 2%.

5. After hearing the learned counsel for the Revenue, we will refuse to interfere with the impugned order for any of them. The learned members of the Tribunal having maintained six charges against the manufacturer/registered person for the reasons earlier weighed with the Adjudicating Authority, no case for interference is made out in absence of solid reasons to challenge these findings. The assertion of the manufacturer/registered person that free of costs supplies of samples did not constitute supply cannot be entertained inasmuch as no such assertion was put forth before the learned Tribunal. As far supply of juices bellow price rate is concerned, again there is nothing on record to support the assertion that only 5000 cases of juices were sold by the manufacturer at a price lower than the price fixed by the manufacturer of juices. Even otherwise since the assertion necessarily based upon consideration of evidence, which was also not ruled upon by the Tribunal nor apparently it was required to do so by the manufacturer/registered person, no question of law in that regard can be said to have arisen out of the impugned order of the Tribunal. As far incorrect claim of input tax of Sui Gas and Electricity Bills is concerned, we are of the view that the issue predominantly pertains to factual aspects of the case and therefore, no question of law arises therefrom.

6. Also we are not persuaded to interfere for the Revenue. It is not correct that in view of the provisions of sections 33 and 34 of the Act the Tribunal cannot remit, reduce or delete additional tax or penalty. That issue recently came up for consideration before this Court in S.T.A. No.3 of 2002 decided on 27-1-2005. In that case the argument that under the provisions of section 34 of the Act or happening of any one of the commissions and omissions mentioned therein on the part of the tax payer, the levy of additional tax and prescribed penalties would be a consequence mandated by law and its waiver by the Tribunal would be an apparent illegality was rejected. On consideration of various judgments of the Hon'ble Supreme Court as well as of this Court we found that the Tribunal had the jurisdiction to wave or remit additional tax or penalty in the face of provisions of section 34 of the Act even after amendment and insertion of the word ^"shall" in subsection (1) of section 34 of the Act. By making a reference to an earlier judgment of this Court in re. Messrs Millat Tractors Ltd., Lahore v. Collector of Sales Tax and Central Excise Lahore (2000 PTD 1445) it was opined that provisions of section 46 (Appeals to Appellate Tribunal) were neither governed nor controlled by the provisions of sections 33 and 34 of the E Act. It was further observed that in a number of cases on Income Tax and Wealth Tax side in identical situation this Court expressed the view that the fixed amounts of penalties or those imposed with reference to a certain amount leviable for default per day were relevant only in the assessment proceedings. Further that imposition of penalties or additional tax with reference to such provisions was not at all sacrosanct for the appellate forums including the Tribunal. It was further noted that in case the departmental interpretation was accepted then the appeal provisions and the powers of the Tribunal to allow relief with regard to the penalties and additional tax will become redundant and that the same could never be the intention of the legislature. Also we were of the view that the additional tax or penalty should not invariably be. imposed for the only reason that it is legal to do so. The learned members of the Tribunal having exercised their discretion to remit additional tax as well as penalty for the reasons, which are apparently valid and sustainable. No question of law can be said to have arisen out of their order.

7. Therefore, these cross-appeals shall be dismissed.

S.A.K./C-83/L???????????????????????????????????????????????????????????????????????? Appeals dismissed.