COLLECTOR OF SALES TAX AND CENTRAL EXCISE, (ENFORCEMENT), KARACHI VS Messrs HAMDARD SUPPLIES, KARACHI and others, 2006 PTD-KARACHI-HIGH-COURT-SINDH 2558 (2006)

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

----S. 47---Question raised in appeal to High Court neither raised before Tribunal or was thereon finding of Tribunal---Validity---Such question would not arise out of order of Tribunal---High Court dismissed appeal.

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

----S. 47-Appeal to High Court---Appeal filed in the name of Collector was signed by Assistant Collector--Application by Collector after more than seven months for permission to sign memo. of appeal alleging same to have been signed by his subordinate official inadvertently---Collector signed 'memo. of appeal after granting of permission---Validity---Appeal was not maintainable in law for having been signed by official not competent 'in law to file same---High Court dismissed the appeal.

Director, Directorate General of Intelligence and Investigation v. Messrs Al-Faiz Industries (Pvt.) Ltd. 2006 SCMR 129 fol.

Raja Muhammad Iqbal for Appellant.

Malik A.R. Arshad for Respondents.

Date of hearing: 13th April, 2006.

JUDGMENT

MUHAMMAD MUJEEBULLAH SIDDIQUI, J. - All the above appeals arise out of the same consolidated order passed by the learned Customs, Excise and Sales Tax Appellate Tribunal Bench-III, Karachi in Sales Tax Appeals Nos.291 of 2003, K-285/2003 and K-288/2003. As the facts and circumstances in all the three appeals are common and they arise out of the single order of the Tribunal, therefore, all the three appeals have been heard together and are disposed of by this common judgment:

All the three appeals were admitted to regular hearing to consider the following questions of law:

"(1) Whether the Appellate' Tribunal has rightly given the benefit of S.R.O. No.500(I)/2003, dated 7-6-2004?

(2) Whether the Tribunal has given the benefit of S.R.O. No.500(I)/2003, dated 7-6-2003 to the appellant by ignoring the ruling of the Central Board of Revenue issued vide Sales Tax Instruction No.16 of 2003, dated 21-6-2003 to the effect that the benefit of S.R.O. shall not be admissible to the unit against whom Audit observation stood issued?

Heard Mr. Raja Muhammad Iqbal, learned counsel for the Department and Mr. Malik A.R. Arshad, learned counsel for the respondents.

Mr. Raja M. Iqbal contended that as a result of scrutiny/audit conducted by the sales-tax official's tax fraud was detected and therefore, show-cause notices were issued. The respondents took plea that they have availed the amnesty scheme introduced through S.R.O. 500(I)/2003, dated 7-6-2003 but the said concession was not available to the respondents on account of a ruling given by the Central Board of Revenue, issued by Sales Tax Instruction No. 16 of 2003, dated 21-6-2003 and 'therefore, the Adjudicating Officer vide order-in-original, dated 22-11-2003 held that the evaded amount of sales-tax along with the additional tax and penalty may be recovered from the respondents. He has further submitted that the learned Tribunal while granting relief has not properly appreciated the facts. He further submitted that the amnesty scheme was announced on 7-6-2003 and respondents got themselves registered on 16-6-2003 for the purpose of availing the amnesty. The tax fraud was already detected on the audit conducted by sales tax officials on 2-6-2003 and the observations were forwarded to the respondents on the same day. A notice was issued to the respondents on 22-5-2003 under section 38 of the Sales Tax Act and the premises was visited on 23-5-2003. The show-cause notice was issued on 10-9-2003. He has submitted that the amnesty available under S.R.O. 500(I)/2003, dated 7-6-2003 was available subject to the condition that no case of tax fraud or evasion was already framed against a registered person. Mr. Raja M. Iqbal submitted that although the show-cause notice was issued on 10-9-2003 but the case was framed with the issuance of audit observations on 2-6-2003. Mr. Raja M. Iqbal was asked to elaborate his contention and substantiate the same with the relevant provisions of law. Mr. Raja M. Iqbal was not able to do it but merely contended that while communicating the audit observations the respondents were called upon to furnish their explanation and therefore, the case would be deemed to have been frayed. Mr. Raja M. Iqbal was then asked to furnish the observations which were allegedly communicated on 2-6-2003, which were denied by the respondents, as according to them they received the audit observations on 18-6-2003 only, after they had already availed the amnesty scheme. Mr. Raja M. Iqbal stated that he had asked the tax officials to furnish the audit observations but in spite of repeated request and reminder the sales-tax officials have not cooperated with him and had not supplied the relevant documents therefore he is not able to produce the same .in Court and is not able to assist this Court on the point that the respondents were already confronted with the instance of evasion of tax and were also called to show cause thereby framing a case against the respondents.

On the other hand, Mr. Malik A.R. Arshad, learned counsel for the respondents has submitted that the respondents got themselves registered on 16-6-2003 as required under the amnesty scheme and availed it, on the same date by paying tax under the amnesty scheme and thereafter they are regularly paying the taxes. He has submitted that if the audit observations were available with the department on 16-6-2003 and as alleged the case was already framed, the sales-tax officials could refuse the request for availing the amnesty scheme, which was not done. He has submitted that the availing of amnesty scheme by the respondents on 16-6-2003 in pursuance of the scheme, dated 7-6-2003, with the permission of tax officials shows that neither any audit observation was available with the sales-tax officials nor any case of tax fraud was framed, otherwise they would not have allowed the respondent to avail the amnesty scheme.

Mr. Raja M. Iqbal has no answer to the contentions raised by Mr. Malik A.R. Arshad, learned counsel for the respondents.

In the above circumstances, we are of the opinion that the learned Tribunal has rightly held that no case was framed against the respondents either on 7-6-2003 when the amnesty scheme was announced or on 16-6-2003 when the amnesty scheme was availed by the respondents with the permission of the tax officials. It is admitted position that the show-cause notice was issued on 10-9-2003.

After careful consideration of the facts, we are persuaded to agree with the contentions of Mr. Malik A.R. Arshad Advocate. The question No.1, is answered in affirmative. So far the question No.2 is concerned the learned counsel for the Department has failed to produce the relevant material before us and therefore, it is not possible for us to give any opinion in respect thereof. Additionally, the question No.2 does not arise out of the order of Tribunal as there is no such finding in the order of Tribunal for the reason that the issue pertaining to the ruling of C.B.R. was never raised before the Tribunal.

Consequent to the above findings, the appeals at the instance of Department are liable to be dismissed.

In addition to the findings on merits we find that all the three appeals are not maintainable in law as well, because these appeals were filed on 23-9-2004 in the name of Collector Sales Tax and Central Excise but actually by Assistant Collector (Law) Collectorate of Enforcement, Sales Tax and Central Excise, Karachi, who signed the memo. of Appeal and the verification. Subsequently Department realized that the appeal was not maintainable and therefore, an application was tiled by the Collector on 5-3-2005, seeking permission to sign the memo. of Appeal contending that it was inadvertently signed by the subordinate official of the Collector. The permission was granted on 13-4-2005, am the memo. of Appeals were signed by the Collector. While considering similar issue in respect of the appeals arising under the Customs Act and Central Excise Act, in the case of Director, Directorate General o Intelligence and Investigation v. Messrs Al-Faiz Industries (Pvt.) Ltd. 2006 SCMR 129, the Hon'ble Supreme Court has held that the appeal could be filed by Collector only and none else. It was further held that an appeal purported to have been filed by the Collector as the nomenclature of the appellant appeared as Collector of Customs but not signed by him and instead of signed or verified either by Deputy Collector or Assistant Collector would be deemed not to have been filed in accordance with the law. It was further held that even if the memo. of Appeals were signed by Collector after expiry of period of limitation, the appeal would be barred by time. The ratio of the above judgment of Hon'ble Supreme Court is fully attracted to the present appeals and therefore, the appeals are not maintainable in law. All the three appeals are therefore, dismissed on merits, as well as on the ground that they are not maintainable in law, having been filed by the official who was not competent in law to file the same.

After hearing learned Advocates for the parties on 13-4-2006 the appeals were 'dismissed by a short order. These are the detailed reasons in support thereof.

S.A.K./C-21/KAppeals dismissed.