Spl. S.T.R.A. Nos.03, 04 and 05 of 2010
Present
Mr. Justice Aqeel Ahmed Abbasi
Mr. Justice Farooq Ali Channa
Date of hearing : 09.08.2012
Date of order : 09.08.2012
Applicant : The Collector of Customs
through Mr. Sohail Muzaffar, advocate
Respondent : M/s FMC United (Pvt) Ltd., through
Mr. Ataullah Khan, advocate
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O R D E R
Aqeel Ahmed Abbasi,J Through instant common order, we intent to dispose of these Special Sales Tax Applications No.03, 04 and 05 of 2010, as the same involved identical questions of law, which are said to have arisen from the order passed by the Customs, Excise and Sales Tax Appellate Tribunal in Sales Tax Appeals Nos. 269, 270 and 271of 2004.
2. Following common questions of law are said to have arisen from the order passed by the Customs, Excise and Sales Tax Appellate Tribunal:
1. Whether the Appellate Tribunal Customs, Excise & Sales Tax had the jurisdiction on 10-11-09 to hear the matter and decide it in view of Ordinance dated 28-10-2009 promulgated by the President of Pakistan by virtue of which Inland Revenue Services (IRS) was formed and Separate Appellate Forum for Sales Tax and Income Tax Appeals have been formed?
2. Whether a Single appeal filed in three matters by the respondent before the Appellate Tribunal, Customs, Excise & Sales Tax was maintainable under the law?
3. Whether the long existing practice classifying the goods of the respondent under wrong heading creates any vested right and prevent the department from classification under the proper heading?
4. Whether classifying the goods under proper heading will in any way prejudice the rights of the respondent?
5. Whether the case of the respondent is covered under Article 25 of the Constitution of Islamic Republic of Pakistan and whether any discrimination has been done in case of the respondent?
6. Whether the provisions of sec 3B of the Sale Tax Act, 1990 are attracted in case of the respondent and whether the respondent can be permitted to make a windfall profit at the cost of the National exchequer?
7. Whether the rejection of respondent’s claim for refund was in accordance with the provisions of Sales Tax Act, 1990?
8. Whether the findings of ADRC in any way binding and can influence the impugned order?
3. It appears that when the matter came-up for hearing at Katcha Peshi on 09.03.2011, learned counsel for the respondent raised objection as to maintainability of the instant reference applications, which according to him were not filed by the competent person. In support of his contention, the learned counsel has readout the amended provisions of law and has also placed on record the copy of an Order C.No. 1(6) IR-Judicial/2009 dated 11th November 2009 to show that even the Federal Board of Revenue has taken cognizance of such amendments and has specified the relevant authority who could competently file a reference under Section 47 of the Sales Tax Act, 1990. Learned counsel for the applicant was directed to satisfy this court on the legal objection raised by the learned counsel for the respondent today.
4. Mr. Sohail Muzaffar while confronted with such objection could not controvert the legal position and submitted that admittedly, instant reference applications have been filed under Section 47 of Sales Tax Act, 1990, after amendments having been introduced by Finance (Amendment) Ordinance, 2009, whereas the same have duly been signed by Collector of Customs, Model Customs Collectorate, Port Muhammad Bin Qasim, Karachi, who was not the competent person to file such reference application. Per learned counsel, an Order No.C.No.1(6) IR-Judicial/2009 dated 11th November 2009 issued by Chief (ST & FE) Revenue Division, Federal Board of Revenue, has further clarified such position according to which, in view of amendments introduced in Sales Tax Act, 1990 through Finance (Amendment) Ordinance, 2009, and in modification of earlier orders on the subject, the powers and functions vested in the authorities mentioned in Column-II of the said order were required to be exercised by the authorities mentioned in Column-III of the Table as mentioned in such order.
5. We have heard both the learned counsel and perused the record as well as the amendments as referred to hereinabove. From perusal of the amendments introduced by Finance (Amendment) Ordinance, 2009 in the Sales Tax Act, 1990, it is noted that several terms appearing in the various sections of the Sales Tax Act, 1990, have duly been substituted. For instance in section 2 of the Sales Tax Act, 1990, the words “Officer of Sales Tax” have been substituted by the words “Officer of Inland Revenue”, the word “Collector” appearing in section 2 and various other sections of the Sales Tax Act, 1990 has been substituted by the word “Commissioner”, whereas the word “Commissioner” has been defined as the Commissioner Inland Revenue appointed under section 30 of the Sales Tax Act, 1990. Similarly, the words “Sales Tax Department” have been substituted by the words “Inland Revenue”, the word “Collector of Sales Tax” has been substituted by the words “Commissioner Inland Revenue”.
6. In addition to above mentioned amendments, section 30 of the Sales Tax Act, 1990 has also been substituted in the following manner:
“30. Appointment of authorities:- (1) For the purposes of this Act, the Board may, by notification in the official Gazette, appoint in relation to any area, any case or any class of cases specified in the notification, any person to be:-
(a) a Chief Commissioner Inland Revenue;
(b) a Commissioner Inland Revenue;
(c) a Commissioner Inland Revenue (Appeals);
(d) an Additional Commissioner Inland Revenue;
(e) a Deputy Commissioner Inland Revenue;
(f) an Assistant Commissioner Inland Revenue;
(g) a Superintendent Inland Revenue;
(h) a Senior Auditor Inland Revenue; and
(i) an officer of Inland Revenue with any other designation.
(2) The Chief Commissioner Inland Revenue and Commissioner Inland Revenue (Appeals) shall be subordinate to the Board and Commissioner Inland Revenue shall be subordinate to the Chief Commissioner Inland Revenue.
(3) Additional Commissioner Inland Revenue, Deputy Commissioners Inland Revenue, Assistant Commissioner Inland Revenue, Superintendent Inland Revenue, Senior Auditor Inland Revenue and officer of Inland Revenue with any other designation shall be subordinate to the Commissioner Inland Revenue.”
7. The effect of the amendments introduced hereinabove was also given in section 47 of the Sales Tax Act, 1990, which provides for filing a reference to High Court against the order of the Appellate Tribunal passed under section 46 of the Sales Tax Act, 1990. Keeping in view the legal objection raised by the learned counsel for the respondent regarding maintainability of the instant reference application, it will be advantageous to reproduce the amended subsection (1) of section 47, which reads as follows:
“47. Reference to High Court.— (1) Within ninety days of the communication of the order of the Appellate Tribunal under sub-section (2) of section 46, the aggrieved person or any officer of Inland Revenue not below the rank of a Deputy Commissioner an Additional Commissioner authorized by the Commissioner may prefer an application in the prescribed form alongwith a statement of the case to the High Court, stating any question of law arising out of such order.”
8. From perusal of substantial amendments introduced in the Sales Tax Act, 1990, it appears that structural changes have been brought in the tax administration by the Federal Board of Revenue, whereas various tax authorities administering Sales Tax Act, have been associated with the income tax authorities administering Income Tax Act. The appellate forums available in the Sales Tax Act including the Appellate Tribunal having now been merged into the appellate authorities provided under the Income Tax, however, with a different nomenclature assigned to such tax authorities and the appellate forums. Pursuant to the amendments introduced in the Sales Tax Act, 1990 by Finance (Amendment) Ordinance, 2009, the Federal Board of Revenue, Revenue Division, Government of Pakistan, issued an order C.No. 1(6) IR-Judicial/2009 dated 11th November 2009, wherein it was ordered that the powers and functions vested in the authorities mentioned in Column-II of the table was directed to be exercised by the authorities mentioned in Column-III of such table, it will be advantageous to reproduce the said order which reads as follows:
“ GOVERNMENT OF PAKISTAN
REVENUE DIVISION
FEDERAL BOARD OF REVENUE
*********
C.No.1(6) IR – Judicial/2009 Islamabad, the 11th November, 2009
ORDER
In pursuance of amendments made in Sales Tax Act, 1990, through Finance (Amendment) Ordinance, 2009, and in modification of earlier orders on the subject, the powers and functions vested in the authorities mentioned in Column-II shall be exercised by the authorities mentioned in Column-III of the Table below:
TABLE
|
I |
II |
III |
|
1. |
Director General |
Chief Commissioner |
|
2. |
Collector of Sales Tax |
Commissioner Inland Revenue |
|
3. |
Collector of Sales Tax (Appeals) |
Commissioner Inland Revenue (Appeals) |
|
4. |
Additional Collector of Sales Tax |
Additional Commissioner Inland Revenue |
|
5. |
Deputy Collector of Sales Tax |
Deputy Commissioner Inland Revenue |
|
6. |
Assistant Collector Sales Tax |
Assistant Commissioner Inland Revenue |
|
7. |
Superintendent of Sales Tax |
Superintendent Inland Revenue |
|
8. |
Senior Auditor of Sales Tax |
Senior Auditor Inland Revenue |
|
9. |
Officer of Sales Tax with any other designation |
Officer of Inland Revenue with any other designation |
2. This order shall take effect from 28.10.2009.
(Abrar Ahmad Khan )
Chief (ST & FE)”
9. Keeping in view the amendments introduced in the Sales Tax Act, 1990 through Finance (Amendment) Ordinance, 2009 and the order issued by the Federal Board of Revenue, as well as the amendments made through Finance Ordinance, 2010, it transpires that during the relevant period when instant reference application was filed, the Commissioner Inland Revenue was the competent person to file reference application against the impugned order passed by the Customs, Excise and Sales Tax Appellate Tribunal, whereas after amendments introduced by Finance (Amendment) Ordinance, 2010 any officer of Inland Revenue not below the rank of a Deputy Commissioner and Additional Commissioner authorized by the Commissioner can file a reference under section 47 of the Sales Tax Act, 1990 before the High Court by stating question of law arising out of the order passed by the Appellate Tribunal.
10. All the aforesaid reference applications have admittedly been filed by the Collector of Customs, Model Customs Collectorate, Karachi and not by Commissioner of Inland Revenue, as required as per amendments introduced in Sales Tax Act, 1990 as well as the order dated 11.11.2009 issued by the Federal Board of Revenue, Government of Pakistan, Revenue Division in this regard. We are of the opinion that an act required to be done by a particular authority in a particular manner, shall be done in the same manner as prescribed by law. Since the competent person as per law in the instant case was the Commissioner Inland Revenue and not the Collector of Customs, therefore, we are of the view that instant reference applications have not been filed by the competent authority as prescribed by law, hence instant reference applications cannot be treated as lawfully instituted proceedings. Accordingly, instant reference applications are hereby dismissed in limine for having been filed by an incompetent person having no valid jurisdiction & authority to file the same.
JUDGE
JUDGE