' NASIM SIKANDAR, J.--The petitioner is a sole proprietorship and a registered person with the Collectorate of Sales Tax and Federal Excise, Lahore as a whole seller. After putting the name of the firm on negative list the Collector served it with a show-cause notice and subsequently conducted two audits. The first audit was conducted for the period February, 2001 to August, 2001 and a liability of Rs,601,811 was created which is claimed to have accordingly been paid.,The name of the petitioner firm was put to negative list for the second time and again an audit was conducted which resulted in creation of a liability of Rs,3,912,041. On the basis of the second audit allegedly a show-cause notice was issued and finally an order-in-original, dated 20-5-2005 was. Recorded which resulted in creation of another demand of Rs,1,033,929. The petitioner claims to have paid that amount On which its name was removed from the negative list.
2. It is alleged that all of a sudden on 10-6-2006 respondent No,2/Collector of Sales Tax and Federal Excise Lahore by way of the impugned order purported to have been issued under section 45-A (Powers .Of the Board (Collector and Collector (Adjudication) to call for records) of the Sales Tax Act, 1990 (for short the Act) proceeded to reopen the said order-in-original and directed his Deputy Collector to pass a fresh order "on completion of legal formalities and providing of hearing to the parties":
3. That re-opening order is sought to be challenged inter alia on the ground that under subsection
(4) of section 45-A of the Sales Tax Act, 1990 a Collector can call or and examine the record of any proceedings to satisfy himself as to the legality or propriety of any decision or order passed by an officer of sales tax subordinate to him. The order-in-original in hand according to the petitioner having been passed by the Deputy Collector (Adjudication), the respondent Collector was not competent to exercise the power contemplated in the aforesaid provisions of the Act. It is also alleged that having exercised the powers under section 45-A a Collector of Customs could not delegate his powers to any subordinate officer for the purpose of recording a fresh order after re- opening of the earlier order. Hence the claim for following relief:-- "Under the circumstances, it is respectfully prayed that the order 64 of 2005, dated 10-6-2006 passed by the Collector Sales Tax, Lahore may kindly be declared illegal, void ab initio and without lawful authority and subsequent proceedings initiated on the basis thereof by respondent No,3 may also be held illegal, void ab initio."
4. The department in their written statement besides taking preliminary objections against maintainability of the petitioner has tried to support the impugned order on the ground of un- natural increase in paid up capital of the firm without a short span of 14 months, that the transactions earlier disclosed to the revenue gave rise to a suspicion that the petitioner was involved in fake and flying invoices, that order-in-original was passed hastily and completely ignoring the factual position. The exercise of power by the respondent Collector under section 45-A is further supported on the ground that the order of re-audit of the unit having been passed by Deputy Collector (Audit), the Collector on executive sides was empowered to make a direction for reopening of the case
5. Learned counsel Mr the petitioner in support of his submissions that at the relevant time the adjudicatory scheme incorporated in the Act by Finance Ordinance, 2006 established a hierarchy for resolution of disputes and the Collectorates exercising the functions of administrating the Act, were two separate and distinct functions of the department has placed reliance upon a judgment recorded by my learned brother Jawwad S. Khawaja, J. In re. Khan Trading Company, Gujranwala v.
Collector of Customs, Excise and Sales Tax (Adjudication), Lahore (PTCL 2001 CL 615). Also refers to an order recorded by me in re.
' Messfs Muskzar Knitwear (Pvt.) Ltd. v. Collector of Sales Tax, Lahore 2004 PTD 714.
6. This petition was admitted for regular hearing on 13-11-2006 with the following note:-- "The issue if the order in original, dated 18-7-2005 relating to A July, 2005 recorded by Addl.
Collector (Adjudication) could be re-opened by Collector exercising his powers on the executive side resorting to the provisions of section 45-A of the Sales Tax Act, 1990, needs consideration."
7. Having heard the learned counsel for the parties I will readily agree with the submissions made at the bar for the petitioner which are fully supported by the ratio settled in the aforesaid two judgments. Following are my reasons:--
(i) The letter of law, in this case provisions of section 45-A (Power's of the Board (Collector and Collector (Adjudication) to call for records) of the Sales Tax Act, 1990 needs to be interpreted giving effect to each and every word used therein. As rightly pointed out by the learned counsel for the petitioner the mentioning of two different Collectors, one on the executive side and the other on the adjudication side, subsection (4) of section 45-A clearly contemplated the flowing of two different streams independent of each other. As found in re. Khan Trading Company Gujranwala, (supra) at the relevant time the Collectorate of Customs exercised the functions by administering the Act and effecting recoveries on executive side was separate and independent of the adjudication limb of the department/ revenue. On the adjudication side, the Collector. (Adjudication) could exercise his revisional powers under section 45-A of the Act in respect of an order passed by an officer subordinate to him while the Collector on the executive side could do the same in respect of a subordinate officer under him functioning on the executive side. If the interpretation of the department as explained in their written reply is accepted, the purpose and intention of mentioning two Collectorates in subsection (4) of section 45-A would clearly be defeated. Since at the relevant time the scheme of the Act provided the establishment of two different hierarchies it was but natural that each one of them was restricted to its own sphere in order to guard against an attempt to transgress the jurisdiction of the other.
(ii) Generally speaking, the title of a section is not relevant in the interpretation of the provisions it contains. However, there are a number of precedents of the superior Courts in the country that at times a resort was made to the title of the section to interpret the provision. The title of section 45-A "Power of the Board (Collector and Collector (Adjudication)) to call for records," makes a clear distinction between a Collector and the Collector (Adjudication). There cannot be two opinions that these provisions confer revisional jurisdiction on the Board and subsection (4) thereof on the Collector and a Collector (Adjudication). This jurisdiction is necessarily supervisory in nature and as a natural corollary can be exercised only by a person or an authority which is assigned with the job of supervising the subordinate authorities and the officers. The revisional jurisdiction now vested in Courts and judicial or quasi juridical authorities in an offshoot of the writ to ',certiorari issued by the Kings of England and then by the King's Bench. It was issued to ensure that a Court or a Tribunal (particularly exercising Criminal jurisdiction) was acting in accordance with law. Its historical background has been given in the Anglo American Heritage by Denial R. Coquillette at page 248 Edition 1999 in the following words:-- "The writ of certiorari from the Latin certiorari ("in form") is used today in the United States as a general vehicle of dictionary appeal. Historically, however, the writ had a much narrower function. It lay only to inferior Courts and only to demand that the record be 'certified' and sent to the King's. Bench to see if that (inferior) Court had exceeded its power in particular cases. It was most frequently used to review criminal indictments and local administrative orders, and was often used to examine the statutory authority for acts of administrative bodies created by statute. "Denial R.
Coquillette. The Anglo American Legal Heritage Page 248(1999)."
Keeping in view the distinction between the office, functions and duties of a Collector and Collector (Adjudication) contemplated in the Sales,Tax Act it can safely be concluded that both of them could operate only in their own line of authority and command. A Collector on executive side could not lay his hands upon any order passed by the adjudication wing and by the same token no Collector (Adjudication) could exercise any executive power in relation to the Collector or his subordinate officers functioning on the executive side.
(iii) At the relevant time the Customs Authorities/Officers assigned the job of adjudication were not excepted to act as Collectors of Revenue and were meant to be independent adjudicators whose decision was subject only to the appellate jurisdiction of the Tribunal or this Court. In re. Khan Trading Company Gujranwala, (supra) my learned brother also held that the term "Collector of Customs" used in section 195 of the Customs Act did not include a Collector acting as an adjudicating authority.
(iv) The impugned order is also bad for the reason that the Collector on executive side could not be allowed to find faults with the order recorded on the adjudication side merely for the reason that a further probe in certain aspects of the case was needed or that the impugned order in original was issued after two months enabling the registered person to sell out stocks to un-registered persons on introduction of zero rating regime in June, 2005. It was only for the Collector (Adjudication) to exercise that jurisdiction although I doubt if he could do that for the reasons mentioned, in the impugned order of the Collector.
(v) The contention of the department that under section 45-A of the Act the department Collector Sales Tax was empowered to call for and examine the record of any departmental proceedings held under the provisions of the Sales Tax Act cannot be accepted as a correct statement of law.
Also the mere fact that in the case in hand the order for re-audit of the unit was passed by a Deputy Collector Customs will not derogate from the fact that the revised order-in-original was passed by the adjudicating authority which was certainly not a department authority or a departmental officer subordinate to him. And,
(vi) the objection made with regard to the lack of jurisdiction of this Court can effectively be rebutted by reference to the ratio settled and the findings recorded by my learned brother in re.
Khan Trading Company Gujranwala (supra).
8. This petition is accordingly allowed and the impugned order, dated 10-6-2006 recorded by Collector, Collectorate of Sales Tax and Federal Excise, Lahore is declared to have been made without lawful authority.