FEDERAL BOARD OF REVENUE VS SIDDIQSONS DENIM MILLS LTD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1800 (2008)

Sales Tax Act (VII of 1990)---

----S.11(4), Proviso---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Preamble---Assessment of tax---Limitation---Admittedly order was passed after expiry of period of 180 days of the date of show-cause notice---If the contention raised by the Department that period could be extended after expiry of the original period of 90 days was accepted, even then the order was passed two days after the expiry of the period of 180 days and therefore, the show-cause notice became ineffective and no proceedings thereafter could be continued---Order passed therefore, was nullity being superstructure raised on void proceedings---Federal Tax Ombudsman recommended, in addition to the recommendations already made, that Federal Board of Revenue should reopen the case under S.54-A of the Sales Tax Act, 1990 and cancel the order-in-original which had been held to be void and close the proceedings so far as show-cause notice was concerned.

PLD 1958 SC 104 rel.

Muhammad Afzal Awan for the Complainant.

S.A. Sajjad Rizvi, Deputy Collector Sales Tax.

ORDER

JUSTICE (RETD.) MUNIR A. SHEIKH, FEDERAL TAX OMBUDSMAN.---This application has been moved by the Revenue Division seeking review of decision, dated 8-4-2008 passed in this complaint by which recommendation was made for cancellation of show-cause notice, dated 9-10-2007 for the concerned officer had failed to pass order within 90 days period prescribed under section 11 of the Sales Tax Act, 1990.

2. The Review has been sought on the following grounds, that the. Collector in exercise of his power conferred under section 11 passed an order on 23-2-2008 by which the said period was extended for further period of 90 days as such departmental officer was vested power to decide the case within 180 days from the date of issue of show-cause notice, dated 9-10-2007. According to Mr. S.A. Sajjad Rizvi, Deputy Collector Sales Tax who has appeared in support of this application stated that order was passed on 7-4-2008 which according to him was within the total period of 180 days, and that this office is not vested with the power to interpret the law. He however, admitted the order-in- original was framed during the pendency of this complaint which was directed against the said show-cause notice on the ground that further proceedings could not be continued after the expiry of period of 90 days.

3. As regard objection that this office was not vested with the power to interpret law it may be mentioned here that in this case no question of interpretation had arisen for it was a case of application of law i.e. period within which proceedings should have been concluded.

4. As regard objection of jurisdiction it is not tenable for it is to be decided whether the case was decided within the period originally prescribed, and if extended within period of total 180 days from the date of show-cause notice.

5. The show-cause notice was admittedly issued in this case on 9-10-2007. The last date of original period of 90 days was 5-10-2007. Even if extended period of 90 days is added the department could pass order upto the 5th April, 2008, as the 5th of April was last date of period of 180 days. It was admittedly passed on 7-4-2008 which was after expiry of period of 180 days of the date of show-cause notice. Even if the contention raised on behalf of the Revenue Department that period could be extended after expiry of the original period of 90 days is accepted, even then the order was passed two days after the expiry of the period of 180 days and therefore, the said show-cause notice became ineffective and no proceedings thereafter, in the same could be continued or order passed therefore, the said Order-in-Original No.19 of 2008, dated 7-4-2008 is nullity being superstructure raised on void proceedings. This view is in accord with the law declared by the Supreme Court of Pakistan in the case reported as PLD 1958 SC 104.

6. For these reasons this Review Application has no merits which is accordingly rejected.

7. In the changed circumstances in addition to the recommendations made in the decision, dated 8-4-2008, the Federal Board of Revenue is also recommended to reopen the case under section 45-A, the Sales Tax Act, 1990 and cancel the order-in-original, dated 7-4-2008 which has been held to be void and no close the proceedings so far as show-cause notice, dated 9-10-2007 is concerned.

C.M.A./74/FTOOrder accordingly.