Messrs KARSS PAINTS AND ALLIED INDUSTRIES, FAISALABAD through Director VS COLLECTOR OF SALES TAX, FAISALABAD, 2006 PTD-LAHORE-HIGH-COURT-LAHORE 2482 (2006)

Sales Tax Act (VII of 1990)---

----S. 47---Remand of case by the Tribunal---Validity---Appellant had challenged in his appeal order of the Customs, Excise and Sales Tax Appellate Tribunal, whereby the impugned order-in-original was set aside and case was remanded to Adjudicating Officer for a fresh decision---Remand order by the Tribunal was against established principles of appeal proceedings in revenue matters, which were; firstly, that a remand order should not be made as a matter of course to, allow a party or an Authority to fill in the lacunas; secondly, that adjudication and the proceedings in appeal in revenue matters must confine to the facts stated in the show-cause notice; and thirdly; that in absence of a cross-appeal, appellant in a revenue matter could not be pushed to a position worse than the one at which he was placed at the time of filing of appeal---Impugned remand order was totally unjustified and unwarranted, in circumstances.

Chairman WAPDA, Lahore and another v. Gulbat Khan 1996 SCMR 230 and Chaudhry Muhammad Sadiq v. Income Tax Officer and others 1988 PTD 1014 ref.

Shahbaz Butt for Appellant.

Sarfaraz Ahmad Cheema for Revenue.

Mian Muhammad Khalid, Advocate on behalf of A. Karim Malik for Revenue.

ORDER

This further appeal under section 47 of the Sales Tax Act, 1990 seeks to challenge an order of the Customs, Excise and Sales Tax Appellate Tribunal, Lahore, dated 15-2-2002 whereby the impugned Order-in-Original, dated 24-9-2001 was set aside and the case was remanded to the Adjudicating Officer for a fresh decision. It is claimed that the impugned order of the Tribunal gives rise to the following questions of law.

(i) Whether on the facts and in the circumstances of the case the learned Tribunal can justifiably remand the case to the respondent No.2 on an issue which was neither the subject-matter of appeal before them nor was objected by the adjudicating authority?

(ii) Whether on the facts and in the circumstances of the case, the learned Tribunal could remand the case on the basis of its own extraneous consideration?

2. The appellant Messrs Karss Paints and Allied Industries, Faisalabad as a registered person was served with a show-cause notice by Deputy Collector. Faisalabad on 2-8-2001. In the notice the appellant was inter alia, confronted with the allegation that as a registered person it had not shown the details of discount in the Sales Tax Invoices. Therefore, a sum of Rs.895,594 along with additional tax of Rs.448,512 was recoverable from it. In the adjudication proceedings that followed Deputy Collector Adjudication Faisalabad on 25-9-2001 found the said confronted amounts to be due from the appellant for the following reasons:--

"In the next observation, it has been observed that the respondents have reduced their value of supply by 10% to 15% as compared to their value of supply for sales tax as in the central excise record. This reduction in value of supply has been attributed to allowance of trade discounts by the respondents. However it has been observed that there is no mention of discount on the invoices issued by the respondents. In view of the provisions of section 2(46b) of the Sales Tax Act, 1990, it is confirmed that a registered person can allow discount to his customers provided the same is entered on the sales tax invoice and it is in accordance with normal business practice. The respondents do not fulfil one of the conditions. The details of discount have not been mentioned on the invoice, therefore the discount provided to its customers is not admissible in the eyes of law. The amount detected on this account is therefore recoverable from the respondents."

3. On further appeal a Division Bench of the Tribunal by way of the impugned order disagreed with the adjudicating authority. In the view of the learned members none of the provisions of section 23 (Tax Invoices) read with the definition of "value of supply" as contained in section 2(46) of the Sales Tax Act required the appellant to indicate the amount of discount separately in the tax invoices. However, it was observed that the adjudicating officer has not adverted to in the impugned order if the discount allowed by the appellant was in conformity with the normal business practice. In the view of the learned members that aspect of the case needed to be examined by the adjudicating authority and hence the remand of the case as noted above.

4. After hearing the learned counsel for the parties we will readily agree with the appellant that the fact if the discount allowed by the petitioner was in conformity with the normal business practice as contemplated in section 2(46) of the Act was never the issue before the adjudicating authority. As the findings of the adjudicating officer on the issue as re-produced above indicate the respondent/registered person was found not to have fulfilled one of the two conditions. The unfulfilled condition, according to the adjudicating authority was the failure on the part of the registered person to mention the amount of discount in the invoices issued by it. It also needs to be noted that earlier in the show-cause notice the detecting agency had charged the registered person only with its alleged failure to mention the amount of discount in the invoices. The factum of the discount to be in conformity with the normal business practices was neither mentioned in the show-cause notice nor it was stated as a reason to raise the aforesaid demand.

5. The remand order of the Tribunal when seen in this perspective is against the following established principles of appeal proceedings in revenue matters:--

First, That a remand order should not be made as a matter of course to allow a party or an authority to fill in lacunas. If an authority is needed, a reference can be made to the ratio settled in re. Chairman, WAPDA, Lahore and another v. Gulbat Khan (1996 SCMR 230).

Second, that the adjudication and the proceedings in appeal in revenue matters must confine to the facts confronted in the show-cause notice. And,

Third, that in absence of a cross-appeal the appellant in a revenue matter may not be pushed to a position worse than the one at which he was placed at the time of filing of an appeal. In re. Chaudhry Muhammad Sadiq v. Income Tax Officer and others (1988 PTD 1014) a remand by the Income Tax Tribunal which was found likely to expose the assessee to another round of cumbersome proceedings and unnecessary harassment was struck down by this Court in exercise of constitutional jurisdiction.

6. In the case in hand, as noted earlier, the factum of the discount being in conformity with the normal business practices or otherwise was neither mentioned in the show-cause notice nor in the Order-in-Original it was dilated upon in any manner. Even before the Tribunal it' does not appear to have been argued by the Revenue to support the demand created. Therefore, the impugned remand order was totally unjustified and unwarranted.

7. For these reasons our answer to both questions is in the affirmative.

8. Appeal accepted.

H.B.T./K-54/LAppeal accepted.