Messrs CHANAR SUGAR MILLS LTD. VS COLLECTOR (SALES TAX), 2005 PTD-SUPREME-COURT 2139 (2005)

(On appeal against the judgments dated 21-11-2001 passed by the Lahore High Court in Appeals Nos.171, 173 and 183-185, 196 and 198 of 2001, dated 27-11-2001 in Appeal No. 362 . of 2001 dated 14-1-2002 in Appeals Nos.39, 40 of 2001 78 of 2002, dated 20-3-2002 in Appeals Nos.46 and 47 of 2002, dated 1-4-2002 in Appeal No.77 of 2002, dated 8-4-2002 in Appeals Nos. 48, 49 of 2002 dated 1-8-2002 in Appeals Nos. 379, 380 of 2002, dated 19-3-2002 in Appeal No.480 of 2002 and dated 24-3-2003 in Appeal No.2 of 2003).

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

----S. 46---S.R.O. vires of---Jurisdiction of Appellate Tribunal---Scope---Appellate Tribunal in its limited jurisdiction could not declare any S.R.O. ultra vires of the Constitution---Principals elaborated.

F. B. Ali v. State PLD 1975 SC 506 rel.

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

----Ss. 46 & 47---Constitution of Pakistan (1973), Art.185(3)---Appeal to High Court---Non-decision of case on merits by Tribunal--High Court non-suited appellant on merits---Validity---Party could not be non-suited on a point on which lower forum had not given its decision---Findings of Tribunal on merits was necessary, so that High Court might take its benefit while deciding appeal---High Court instead of non-suiting appellant on merits should have remanded case to Tribunal for sake of justice---Supreme Court set aside impugned judgment and remanded case to Tribunal for its decision on merits.

(c) Administration of justice---

----Party cannot be non-suited on a point on which lower forum has not given its decision.

Imtiaz Rashid Siddiqui, Advocate Supreme Court and Sh. Salahuddin, Advocate-on-Record for Appellant (in C.As. Nos.142 and 146 of 2002).

Shahid Karim, Advocate Supreme Court, Mehmood-ul-Islam, Advocate-on-Record and Ch. Muhammad Akram, Advocate-on-Record for Appellants (in C.As. Nos. 143, 148, 149, 153, 722 to 724, 823, 824, 1205, 1704 to 1706 of 2002, 1184 of 2003 and C.P. No. 1320-L of 2002).

Ali Sibtain Fazli, Advocate Supreme Court for Appellant (in C.A. No.144 of 2002).

Syed Mansoor Ali Shah, Advocate Supreme Court for Appellants (in C. As. Nos. 150 to 152 and 725 of 2002).

M. Rafiq Rajwana, Advocate Supreme Court for Appellant (in C.A. No.674 of 2002).

Sh. Salahuddin, Advocate-on-Record for Appellant (in C.A. No.675 of 2002).

Respondents Nos.l, 2 and 4: Ex parte (in C.A. 142 of 2002).

A. Karim Malik, Senior Advocate Supreme Court for Respondent No.3 (in C.As. Nos. 142, 143, (R.No.1), 144 to 152, 722, 1205, 1704 of 2002).

Respondent No.2 (in C.A. 143 of 2002): Ex parte.

Dr. Sohail Akhtar, Advocate Supreme Court for Respondents (in C.As. Nos. 144, 153, 1205 of 2002 and 1183 of 2003).

Ch. Saghir Ahmed, Advocate Supreme Court for Respondents (in C.As. Nos.674 to 675, 723 to 724, 823 to 824 and 1706 of 2002).

Nemo. for Respondents (in C.As. Nos.674, 675, 723, 724, 823, 824 and 1706 of 2002).

Date of hearing: 18th January, 2005.

JUDGMENT

IFTIKHAR MUHAMMAD CHAUDHRY, J.--- By this common judgment we intend to dispose of listed-appeals/petitions filed against the judgment passed by the Lahore High Court.

2. Precisely stating facts necessary for disposal of appeals are that appellants being dissatisfied from the original orders passed by the Collector adjudication holding that they are not entitled for exemption of further Tax which has been levied under section 3(1-A) added in the Sales Tax Act vide Finance Act, 1998 as the benefit of exemption as per S.R.O. No.207(I)/98, issued by the Central Board of Revenue and S.R.O. No.208(I)/98 dated 31st March, 1998 issued by the Federal Government is not available to them. As such they approached to the Customs. Excise and Sales Tax Appellate Tribunal, Lahore for redressal of their grievance.

3. Incidentally the Tribunal instead of dilating upon the merits of the case proceeded to examine the vires of S.R.Os. As such learned High Court vide impugned judgment concluded that the Tribunal in its limited jurisdiction had no authority to declare S.R.Os. ultra vires to the Constitution. Relevant para. therefrom reads as under:---

"The Customs, Excise and Sales Tax Appellate Tribunal herein referred as Tribunal is constituted under section 194 of the Customs Act and is conferred the Appellate jurisdiction under section 46 of the Sales Tax Act, 1990 for dealing with the matters relating to the appeals under Sales Tax Act, 1990. Under section 46 an appeal is competent before the Tribunal from any decision or order passed by the Collector of Sales Tax or by Officer of Sales Tax. The Scheme of Sales Tax Act reveals that the Collector passes an order after-adjudication under section 45 in respect of cases falling under section 36 and section 11(2). Going down the ladder section 36 contemplates cases involving recovery of tax not levied or short-levied or erroneously refunded and section 11(2) deals with the assessment made by the Sales Tax Officer under the Act. It is by now well-settled principle of law that the appeal is a continuation of the original lis. An appeal is a right of entering superior Court and invoking its aid and interposition to redress the error of the Court below. The conception of Appellate Authority is that it examines the original order for determining whether it ought to have been passed in accordance with law that was applicable or that the subordinate Court committed an error in determining the question of fact as well as of law. The Court sitting in appeal cannot claim higher jurisdiction than the original Court. It was so held by the Supreme Court in case F.B. Ali v. State reported as PLD 1975 SC 506. We therefore, do not find any difficulty in holding that the Tribunal as forum of appeal possesses the powers which are exercising their jurisdiction under sections 36 and 11(2) of the Sales Tax Act. A close analysis to the provisions of sections 36 and 11(2) read with section 46(4) of the Sales Tax Act, 1990, shows that the powers of the Tribunal are limited and these powers confined, as an appellate powers, in respect of matters, falling within the parameter of sections 36 and 11(2) of the Act. These powers inter alia do not include the powers of judicial review as are available to the Civil Court in exercise of their plenary jurisdiction and the High Court or Supreme Court in exercise of their Constitutional jurisdiction. We therefore, accordingly hold that powers of judicial review as available to the superior Courts under the Constitution and the Civil Court under their plenary jurisdiction are not available to the Tribunal. In the parameter of their limited jurisdiction as an Appellate Tribunal the Tribunal could not examine the vires of S.R.O.207(I)/98 and S.R.O.751(I)/2000. Both the S.R.Os. were issued by the Central Board of Revenue in exercise of the jurisdiction vested in them under section 2(46) of the Sales Tax Act, 1990. The Tribunal was not vested with any power to call into question the vires of these S.R.Os. and strike down the same being ultra vires, hence we find that the Tribunal exceeded its jurisdiction in deciding the question of vires of the relevant S.R.Os. On this score the judgment of the Tribunal is, therefore, not sustainable in the eye of law and we accordingly hold as such."

Simultaneously learned High Court also decided the cases on merits concluding thereby that appellants are not entitled for the benefit of the exemption qua further tax as it was levied under amended section 3(1-A) as such instant proceedings are instituted.

4. We have heard learned counsel for parties and have also gone through the impugned judgment, judgment of the Tribunal as well as law on the subject. Initially we were of the opinion to dispose of the appeals finally without taking into consideration the effect and non-decision of cases on merits by the Tribunal but during hearing when the learned counsel for appellants expressed his grievance that the Tribunal had not decided the cases on merits, therefore, learned High Court instead of non-suiting them on merits in the interest of justice should have remanded the cases to the Tribunal for sake of justice. Besides if we have also noticed that the findings of the Tribunal on merits are necessary, so that the learned High Court may take its benefit while deciding the cases. Even otherwise it is consistent practice of the judicial C forums that a party cannot be non-suited on the point on which the lower forum had not given its decision, therefore, we have decided to remand the cases to the Tribunal for decision of appeals on merits within a period of three months.

5. Needless to observe that appellants shall be at liberty to pray for interim relief before the Tribunal and if such request is made it shall be considered according to law.

Thus, for the foregoing reasons impugned judgment is modified to the extent as observed hereinabove and cases are remanded to the Tribunal for decision. Parties are left to bear their own costs.

S.A.K./C-35/SCase remanded.