ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

C.P. No.D-2286/2011

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Order with signature of Judge

1. For orders on Misc. No.10416/2011.

2. For orders on Misc. No.10417/2011.

3. For Katcha Peshi.

4. For orders on Misc. No.10418/11.

30.06.2011

Mr. Makhdoom Ali, advocate for the petitioner.

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1. Urgency application is granted.

2. Exemption application is granted subject to all just exceptions.

3. This petition has been filed impugning the notice under Section 14 of the Federal Excise Act, 2005 bearing No.DCIR/A.Unit-1/Audit Zone-1/RTO/2010-11/745 dated 10.06.2011 issued by Deputy Commissioner Inland Revenue, Audit Unit-01, Zone-1, Regional Tax Office, Karachi, whereby petitioner was informed that Federal Excise Duty, for the tax period relevant to January 2009 to December, 2009, under Section 3 read with Entry No.8 of Table II of First Schedule to Federal Excise Duty Act 2005 and Rule 40A of the Federal Excise Rules, 2005, amounting to Rs.438,342/- has not been paid by them and was asked Show Cause why the said amount mentioned in the show cause notice may not be recovered from him together with default surcharge in terms of the Federal Excise Act, 2005.

Mr. Muhammad Ashraf Mughal, learned DAG present in Court waives notice.

The main contention of the learned counsel is that the petitioner is basically an asset management company and the services rendered by him do not fall within the definition of services as defined in sub-section (23) of Section 2 of the Federal Excise Act, 2005, read with Entry No.8 of Table II of First Schedule to Federal Excise Duty Act, 2005 and HS Code 98.13 of the Customs Act, as the services of the assets management companies have not been included in this definition. This Court in earlier similar petition has already directed the petitioner to submit explanation before the officer, who has issued the impugned show cause notice, and further directed the relevant officer to pass appropriate orders as per law, whereas, in the meantime respondent has been directed not to take any coercive action against the petitioner on the basis of impugned notice. Since, learned counsel for the petitioner has not been able to point out to us that the controversy raised through instant petition i.e. petitioner does not fall within the definition of services, can not be decided by the Adjudicating Officer or the Commissioner Inland Revenue (Appeals) or the Appellate Tribunal as provided in the hierarchy of authorities in the Act, therefore, we are not inclined to interfere in the departmental proceedings at this stage. However, by consent, we are disposing of this petition in the following manner:-

1. The petitioner shall on the date granted by the respective officer, file his explanation and also appear before the said officer, who will give opportunity of being heard and after considering his explanation and hearing his arguments shall pass an elaborate and speaking order giving findings on all the points raised by the petitioner including his contention that his services do not fall within the definition of services as provided under Federal Excise Act, 2005 and if he does not agree with the petitioner then cogent reason for such disagreement should be given.

2. This order shall be immediately served upon the petitioner giving him a minimum period of 30 days from the date of service on the petitioner for payment of impugned demand.

3. The petitioner, if aggrieved with such order, may file the appeal before the Commissioner Inland Revenue and if any stay application has been filed by the petitioner, the Commissioner Inland Revenue will hear the application within 3 days of the filing of the appeal and will decide the same by a speaking order within 3 days from the date of hearing of such application.

4. If the learned Commissioner Inland Revenue fails to abide by these directions it will be considered as violation of this Court's order which may entail adverse consequences.

5. If the order of the Commissioner on stay application is against the petitioner, he will be granted 7 days time to seek appropriate order from the Tribunal and the Tribunal has already been directed that they will hear the stay application within 3 days whereafter an order has to be passed thereon within 3 days of the hearing. These instructions are being repeated and reiterated in this case also.

6. The recovery of the Federal Excise Duty shall be initiated only after passing of 30 days from the date of reply of the original order or 14 days time provided for the Commissioner Inland Revenue and the learned Tribunal to pass appropriate order which ever is later. However, the petitioner is directed to ensure that the appeal and the stay application if any are filed within 10 days of the receipt of order.

7. If any violation of the order has been pointed out by filing application in this case then appropriate order will be passed for defiance of Court's order.

The petition is disposed of in the above manner alongwith listed applications.

JUDGE

Nadeem