NAZIR AHMAD VS The FEDERATION OF PAKISTAN, 2017 PTD-LAHORE-HIGH-COURT-LAHORE 1402 (2017)

Sales Tax Act (VII of 1990)---

----Ss. 74 & 45---General Clauses Act (X of 1897), S. 24-A---Adjudication of claims by Sales Tax authorities---Statutory limitation---Condonation---"Speaking order"---Scope---Petitioner/taxpayer impugned order of Commissioner Inland Revenue, whereby its claim for refund was denied on ground that petitioner's/taxpayer's claim was time-barred and delay of each and every day was not explained by taxpayer/ petitioner Validity----Authorities were required to pass reasoned and "speaking orders" under S.24-A of the General Clauses Act, 1897 and impugned order was not a "speaking order"---Impugned order was set aside and Department was directed to decide the matter through a "speaking order"---Constitutional petition was disposed of, accordingly.

Messrs Pfizer Laboratories Limited v. Federation of Pakistan and others PLD 1998 SC 64; Shahtaj Sugar Mills Ltd. v. Additional Secretary Government of Pakistan, Ministry of Finance Karachi and others 2009 PTD 1544 and Colony Thal Textile Mills's case PLD 1980 Lah. 377 ref.

Waheed Shahzad Butt for Petitioner.

Sarfraz Ahmad Cheema for Respondents.

ORDER

SHAHID JAMIL KHAN, J.---Petitioner is aggrieved of order dated 03.11.2016 passed by FBR (respondent No.1). Operative part of the impugned order is reproduced hereunder:--

"2. It has been observed that the reasons put forth by the RP are occasional happening occurring inadvertently which cannot be construed as justified reasons for such a long delay. The Honourable Supreme Court of Pakistan in the case reported as (1980) 42 Tax 140 (S.C.Pak.) titled Commissioner of Sales Tax, Zone-A, Lahore v. Chenab Textile Mills Ltd. Lahore has held that "where a matter is barred by limitation, each and every day's delay must be explained before it can be condoned". Also the Honourable FTO in Complaint No.326/LHR/ST(71)/627/ 2012 has been pleased to hold that "the delay should not unduly protracted and some plausible explanation should be offered for the delay. In the complainant case, there was considerable delay in approaching the Commissioner, Inland Revenue and then when the delay was not condoned by him, there was a further period of inexplicable, extended delay in approaching FBR for condonation". Reliance is also placed on the ratio of judgments in the cases of M/s Shahtaj Sugar Mills Ltd. v. Additional Secretary, Government of Pakistan, Ministry of Finance, Karachi (2009 PTD 1544) and Complaint No.359/KHI/ ST(177)/1242/2013 decided by the Honourable FTO.

3. As the delay has not been substantiated with plausible reason/explanation and relying on the judgments of the Honourable Supreme Court of Pakistan and Honourable FTO that substantive reasons of each and every day must be given before delay can be condoned, the request for condonation under section 74 of the Sales Tax Act, 1990 is hereby rejected."

2.Learned counsel for the petitioner submits that petitioner is manufacturer-cum-exporter, therefore, refund of the tax paid at exported consignment is claimed and allowed by the respondents. In this case, the claimed refund was rejected through impugned order for the reason that each and every day is not explained. Learned counsel for the petitioner submits that petitioner's case squarely falls within the law laid down in judgment Messrs Pfizer Laboratories Limited v. Federation of Pakistan and others (PLD 1998 SC 64). Further submits that facts of decision in Shahtaj Sugar Mills Ltd. v. Additional Secretary Government of Pakistan, Ministry of Finance Karachi and others (2009 PTD 1544) were distinguishable from the facts of petitioner, therefore, it was wrongly relied upon.

3.Learned counsel for the respondents has opposed the petition and submits that judgment in Shahtaj's case was rightly applied in this case.

4.Heard. Record perused.

5.Perusal of the reproduced part of impugned order shows that facts of petitioner's case as well as Shahtaj's case were not compared in the impugned order. Examination of Shahtaj's case shows that registered person has deposited the tax voluntarily and refund was claimed after passing of judgment in Colony Thal Textile Mills (PLD 1980 Lahore 377). Hon'ble Supreme Court in this backdrop of facts decided against the registered person after discussing Pfizer Laboratores Ltd. 's case. Relevant part of the judgment is reproduced hereunder:--

"8. This Court had passed a judgment in case of Pfizer Laboratories Ltd. v. Federation of Pakistan (PTCL 1998 CL 354) involving the same question. Learned counsel forcefully stressed that in view of the judgment of this Court in Messrs Pfizer Laboratories Ltd., supra, the petitioner was also entitled for refund of the Regulatory duty deposited by it. It is pertinent to note that in that case the petitioner from the very first day objected the payment of the duty and resorted to remedies available under the law upto this court but the facts in the case in hand are distinguishable. The petitioner in the instant case for the first time approached the competent authority after the judgment passed by this Court in Colony Textile Mills, supra and as observed in the preceding paragraph, a specific period has been provided for the purpose of claim of refund of the excess duty, charges etc., in the relevant laws and a specific period of one year, has been provided for claiming the same under Rule 11 of the Central Excise Rules, 1944. The petitioner after the expiry of the said period had initiated the proceedings for the first time in 1981. It is a settled proposition law that the judgment of this Court would be operated from the date of its pronouncement and would not be effective retrospectively "

6.Needless to say that authorities are required to pass reasoned and speaking order under Section 24-A of the General Clauses Act, 1897. The impugned order in Court's opinion is not speaking. Learned counsel for the respondents is also confronted to show whether the impugned order is appealable, he has read sections 45B and 46 of the Sales Tax Act, 1990 to substantiate that order passed under Section 74 of the Sales Tax Act, 1990 is not appealable.

7.Under the circumstances, the impugned order is set aside and matter is remanded to respondent No.1, who shall decide the matter through speaking order, after discussing facts of petitioner's case and law laid down in above noted judgments.

Disposed of.

KMZ/N-13/L Order accordingly.