Findings/DECISION JUSTICE (RETD) MUNIR A. SHAIKH, FEDERAL TAX OMBUDSMAN- The complainant is a Manufacturer- Exporter and is registered with the Sales Tax Department. The complaint relates to Sales Tax Order- in-Original (O.I.O.) bearing No. 29 of 2006,. Dated 28.3.2006 which was stated to be barred by time within the meaning of Section 36(3) of the Sales Tax Act, 1990 (the Act)
2. The facts of the case, as stated in the complaint, are enumerated as follows:--
(a) A show-cause notice (S.C.N.), dated 4.11.2004 was issued which alleged that the -invoices through which' in it tax was claimed by the complainant were declared suspicious by the C.B.R.
Another violation pointed out was the non-payment of sales tax on supply of empty bags and paper cones. The complainant was asked to show cause why the sales tax amounting to Rs.
1,970,952/- may not be recovered from them alongwith additional tax.
(b) The Order-in-Original bore the date of 28.3.2006. However, it was dispatched on 19.5.2006 and delivered to the complainant on 20.5.2006.
(c) As the" impugned Order-in-Original was late by 382 days, it was clearly hit by the provisions of Section 36(3) of the Act. in view of the circumstances stated' above, the respondent had committed the offence which fell in the definition of maladministration, it was, therefore, prayed that the Offer-in-Original be declared illegal.
3. The D.C. Sales Tax and Federal Excise, Faisalabad, in his written reply recapitulated the facts of the case. On its merit, following submissions were made:--
(a) it was denied that the Order-in-Original in question was barred by time because the C.B.R, vide its letter C. No. 6(6)S/Adj/2005, dated 12.12.2005 extended the time limit to 31.3.2006 and the Order- in-Original was passed on 28.3.2006. Therefore, it was not barred by time.
(b) The Customs, Sales Tax and Federal Excise Appellate Tribunal had held that the provisions of Section 36(3) of the Act were directory and not mandatory.
(c) The reasons for not adhering to the time limitation under Section 36(3) of the Act and seeking extension of time from the C.B.R, were narrated, it was stated that the Adjudication Collectorate was abolished through Finance Act, 2005 and the case of the complainant was transferred to the Revenue Collectorate, That explained the delay.
(d) It was pointed out that the complainant could file an appeal before the Collector (Appeals).
(e) However, the respondent did not comment on the point raised by the complainant that the Order-in-Original was served on 20.5.2006.
4. Both A.R. And D.R. Attended and the case was discussed with them. The A.R. Presented the envelope through which the Order-in-Original was delivered to the complainant, it clearly showed that it was dispatched on 19.5.2006 and was delivered on 20.5.2006. He contended that the author of the impugned Order-in-Original. Did not adhere even to the extended time given by the C.B.R, as there was no profit that it was passed by 31.3.2006. He, in particular, referred to para. 2 of C.B.R.'s letter quoted above which clearly stated that the extension was subject to the condition that no further extension will be granted and the case should be decided within the extended period.
4.1. Another issue raised by the A.R. Was that the C.B.R, had erred in extending the time period when the original time of 90 days had already expired. Explaining this point he stated that the S.C.N. Was issued on 4.11.2004. The time of 90 days expired on 4.2.2005 whereas the extension by the C.B.R, was granted on 12.12.2005. in support of his argument, he presented a case decided by the Indian Supreme Court cited as PTGL 1983 (G.L.)
46. He also presented a Customs General Order bearing No. 12 of 2002 in which the C.B.R, clearly instructed in subordinate officers that the extension had to be ordered before the expiry of the original time. If the extension was not granted within that time, it would not have any force of law.
5. The D.R. Reiterated the arguments contained in the written reply. Rebutting the arguments of the A.R. That the extension could only be granted before the. Expiry of the original time limit, he presented a decision of the Honourable President of Pakistan in Complaint No. 1133-L of, 2005 conveyed vide Law, Justice and Human Rights Division's letter No. 191/2005-Law (FTO), dated 22.5.2006. Discussion the extension granted by the C.B.R, in exercise of its powers under Section 45 of the Act, it was stated that the said, section empowered the C.B.R, to regulate the system of.
Adjudication including the extension of time in "exceptional circumstances". The question whether the C.B.R, could extend the time limit before the expiry of the statutory period or even thereafter was a question relating to interpretation of law on which the Honourable F.T.O. Ought not to give any decision. With this observation the decision of the Honourable F.T.O. Holding the grant of extension by C.B.R, after the expiry of the original time limit illegal was overruled.
6. Another point raised by the D.R. Was that the Honourable F.T.O. Could not question whether the grant of extension by the C.B.R, was based bn reasonable grounds or not. in this regard, he quoted a decision of the Honourable President of Pakistan in C. No. 904 of 2005 (M/s, paragraphs (Pvt.) Ltd., Islamabad), as conveyed vide Law, Justice and Human Rights Division's letter No. 196 of 2005- Law (FTO), dated 26.5.2006.
7. The arguments of the two parties, both written as well as oral, were given due consideration. First of all the point raised by the D.R. And stated in para. 5 above is taken up. it appears that when the case was placed before the Honourable President of Pakistan, full facts were not brought to his kind notice. The question whether the C.B.R, could extend the time for adjudication before the expiry of the statutory period is not a question of interpretation of law. It is an established principle of law, not only because of the decisions of the higher Courts but also its acceptance by the C.B.R. As pointed out by the A.R., the C.B.R, itself issued clear instructions to its subordinate officers that any extension given after the expiry of the original period did not have any fore of law. By issuing these instructions they acted in conformity with the accepted principle of law. On the other hand, by extending the time period through their letter, dated 12.12.2005 referred to in para. 3(a) above, they contradicted their own instructions issued earlier, it is obvious that this fact was not presented before the Honourable President of Pakistan. The action of the C.B.R, in extending the time period after the expiry of the original time limitation cannot be upheld.
8. Now the objection raised by the D.R. Vide para. 6 supra is taken up. I have carefully gone through the decision of the Hon'ble President of Pakistan on a representation made-against the decision in Complaint No. 90 of 2005 relied upon by the D.R. It may be observed here that every case has its pwn peculiar facts and circumstances, which has to be decided keeping them in view, it appears that when the case was placed before the Hon'ble President of Pakistan for decision, as the decision shows, it was not brought to his notice that the C.B.R., which is another name of the Revenue Division, was as much within the purview of the jurisdiction of the FTO as any other.