FAUJI SUGAR MILL through Ijaz Ahmad Awan VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2008 P T D 1397
[Federal Tax Ombudsman]
Before Justice (Retd.) Munir A. Shaikh, Federal Tax Ombudsman
FAUJI SUGAR MILL through Ijaz Ahmad Awan Advocate
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.298-L of 2006, decided on 16/05/2006.
(a) Sales Tax Act (VII of 1990)---
----Ss. l1(4) & 7---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Assessment of tax---Limitation---Refund---Complainant contended that Order-in-Original was passed after the expiry of mandatory period of ninety days prescribed under S.11(4) of the Sales Tax Act, 1990---Department contended that bar of limitation of S.11(4) of the Sales Tax Act, 1990 would not be attracted as it was not a case where after allowing the amount of refund to the complainant who had already received the same, it was being recovered having been paid through mistake or otherwise and it was the case where the application of the complainant claiming refund had been dismissed on merits, therefore, S.11(4) of the Sales Tax Act, 1990 could not be pressed into service---Validity--Bar of limitation under S.11(4) of the Sales Tax Act, 1990 or otherwise-was not attracted in the case therefore, the contention of the complainant in this regard was repelled and overruled by the Federal Tax Ombudsman.
(b) Sales Tax Act (VII of 1990)---
----S.45-B---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Appeal---Appeal and complaint---Complainant contended that fair opportunity was not granted to substantiate by production of necessary documentary evidence that burden of the sales tax was not passed on to the consumer---Validity--. Appeal had been filed against the Order-in-Original before the First Appellate Authority in which all these points had been raised---Collector (Appeals) shall take into consideration the contentions raised that it had evidence to prove that burden had not been shifted to the consumer if an opportunity was given to it to do so---In appeal, entire case was reopened and the appellate forum had all the powers while deciding an appeal to grant opportunity to the appellant if the circumstances of the case according to its finding so justified to produce evidence in respect of any matter in controversy---Order-in-Original was based on the only ground that complainant did not produce evidence to prove that burden of sales tax paid was not shifted to the consumer, therefore, it would be all the more very material for the appellate forum to consider whether the case should be decided without giving opportunity to the complainant to produce evidence in these respects to do complete justice---Though the appeal before the Collector was filed later than the institution of complaint and for that matter, jurisdiction of Federal Tax Ombudsman was not barred as the matter was not pending on the date of filing of complaint but Federal Tax Ombudsman recommended that Collector (Appeals) should decide the appeal on merits after hearing, the complainant and giving due consideration to the contentions raised by it and in case, the complainant would feel aggrieved against the decision to be made by the Collector (Appeals), it will be open to it to seek further remedy before the higher forum under the law or bring fresh complaint as the case may be which shall be decided on its own merits.
Ijaz Ahmad Awan and Nauruan Mushtaq Awan for the Complainant.
Dr. Irfan Wahid, Deputy Collector Customs.
DECISION/FINDNGS
JUSTICE (RETD.) MUNIR A. SHAIKH, FEDERAL TAX OMBUDSMAN.---Through this complaint, maladministration has been alleged in respect of Order-in-Original No.3 of 2006 passed by Deputy Collector Sales Tax through which application made by the complainant for refund of the amount of sales tax has been rejected.
2. I have heard the learned counsel for the complainant and Dr. Irfan Wahid who has appeared to represent the Revenue Division. The main grievance of the complainant was:
(a) That Order-in-Original impugned in this complaint was passed after the expiry of mandatory period of ninety days prescribed under section 11(4) of the Sales Tax Act, 1990.
(b) That fair opportunity was not granted to the complainant to substantiate by production of necessary documentary evidence that burden of the sales tax in question was not passed on to the consumer.
4(sic). As against this, the DR submitted that bar of limitation of section 11(4) of the Sales Tax Act would not be attracted in this case, for it is not a case where after allowing the amount of refund to the complainant who had already received the same, it was being recovered having been paid through mistake or otherwise. It is a case where the application of the complainant claiming refund had been dismissed on merits, therefore, section 11(4) ibid could not be pressed into service.
5. This argument has considerable force. Bar of limitation in this case under section 11(4) of the Act or otherwise is not attracted, therefore, the contention of the learned counsel for the complainant in this regard is hereby repelled and overruled.
6. As regards grant of opportunity to produce evidence, the DR submitted that in this case, as many as seven hearings took place but the complainant did not produce any evidence to prove that the burden had not been shifted to the consumer. Learned counsel for the complainant says that the dates of hearing which were fixed in the case were not for the purpose of production of evidence but were fixed for formal proceedings and, the case was decided on the date for which notice of final hearing was given to the complainant. The complainant before the concerned officer raised the point that the Department should submit and produce documents on the basis of which the show-cause notice was issued to it for rejection of the refund claim. The DR admitted that no documents were produced by the Revenue Division before the officer for the reason that the show-cause notice had been issued on the basis of claim of refund and the documents attached by the complainant itself and not on the basis of any document prepared by the department.
7. Learned counsel for the complainant submitted that after these formalities had been completed, final notice of hearing for 4-2-2006 was given on which date the case was also decided there-fore, no opportunity at all was given to the complainant to produce evidence in support of its plea that it had not shifted the burden to the consumer.
8. The contention of learned counsel for the complainant as to grant of fair opportunity of hearing and production of evidence in the circumstances of this case relates to the merits of the case. It has been brought to my notice that an appeal has been filed by the complainant against the impugned Order-in-Original before the Collector Appeals in which all these points have been raised.
9. The Collector Appeals shall take into consideration the contentions raised by the complainant and the complainant's plea that it has evidence to prove that burden had not been shifted to the consumer if an opportunity is given to it to do so. In appeal, according to established law, the entire case is reopened and the appellate forum has all the powers while deciding and appeal to grant opportunity to the appellant if the circumstances of the case according to its finding so justified to produce evidence in respect of any matter in controversy. Needless to say that the impugned Order-in-Original is based on the only ground that the complainant did not produce evidence to prove that burden of sales tax paid was not shifted to the consumer, therefore, it would he all the more very material for the appellate forum to consider whether the case should be decided without giving opportunity to the complainant to produce evidence in this respect to do complete justice. Though the said appeal before the Collector was filed later than the institution of this complaint and for that matter, jurisdiction of this office is not barred as the matter was not pending on the date of filing of the complainant but in view of the above mentioned circumstances, I would like that the Collector Appeals should decide the appeal on merits after hearing the complainant and giving due consideration to the contentions raised by it and in case, the complainant would feel aggrieved against the decision to be made by the Collector Appeals, it will be open to it to seek further remedy before the higher forum under the law or bring fresh complaint as the case may be which shall be decided on its own merits.
10. Before parting with this decision, it may be mentioned that DR submitted that claim of refund was raised in this case on the basis of findings given by Sindh High Court in its judgment passed in C.P. Nos.1457, 1476, 1477, 1629, 1630, 1698, 1699, 1932 and 1937 of 1999 which has been set aside by the Supreme Court vide judgment dated 1-3-2006 passed in C.A. Nos.307-316 of 2001. I would refrain from expressing any opinion on this aspect of the case, for learned counsel for the complainant wants to challenge the correctness of this contention that claim of refund is based on the judgment of the Sindh High Court alone. This aspect of the case if raised before the Collector Appeals by the Department, shall also be taken into account and a decision made by giving express findings.
11. Subject to observations made above, this complaint is hereby disposed of.
C.M.A./120/FTOOrder accordingly.