ZIA-UD-DIN KHATTAK, J.---(1). The Collector of Sales Tax and Central Excise, Peshawar has filed this Reference under section 36-C of the Central Excise Act, 1944 read with section 47 of the Sales Tax Act, 1990 against the judgment and Order-in-Appeal No,7(46)/CE/IB/2000, dated 30-7-2007 passed by the Customs, Federal Excise and Sales Tax Appellate Tribunal, Peshawar Bench whereby the appeal of Messrs Makk Beverages (Pvt.) Ltd., Peshawar was accepted.
2. Briefly, facts of the case are that during the course of audit of Messrs Makk Beverages (Pvt.) Ltd., Peshawar, respondent the Directorate General Audit Revenue Receipt, Lahore (DRRA) pointed out that according to C.B.R's. Letter No,1(20)-CEB/94, dated 9-10-1994, the minimum retail price of unchilled aerated water of 250m1 bottle inclusive of CE duty and Sales Tax was Rs,4.50 during the period from 1-7-1994 to 9-10-1994, whereas the respondent-unit fixed its retail price of 250m1 bottle at Rs,4.25 due to which omission the government dues of Rs,12,71,745 on account of CE duty, and Sales Tax/Additional Tax was short realized. Accordingly, a show-cause notice. Dated 23-6-1996 was issued to the respondent-unit and after the adjudication proceedings vide order-in-original, the Additional Collector ordered the respondent-unit to pay Rs,3,08,789 as CE duty under Rule 10 of CE Rules, 1944 and Rs,9,62,965 as Sales Tax Additional Sales Tax under section 36 of the Sales Tax Act, 1990. Appeal No,CE/ST-111 of 1999 filed by the respondent unit did not find favour with the learned Collector (Appeals) who vide judgment dated 17-11-1999 dismissed the same. Feeling aggrieved of the order-in-appeal, the respondent-unit filed 2nd Appeal in the Customs, Federal Excise and Sales Tax Appellate Tribunal, Peshawar Bench. The learned Member (Technical) after hearing the parties vide judgment dated 30-7-2007 set aside the order-in-appeal.
3. Dissatisfied with the judgment dated 30-7-2007 of the learned Appellate Tribunal, the Collector of Sales Tax and Federal Excise, Peshawar filed this Reference under section 63-C of Central Excises Act, 1944 read with section 47 of Sales Tax Act, 1990. The following questions of law were formulated:--
(a) Whether an Agreement and decision in between the Pakistan Beverages Manufacturers Association with the Government is binding on the Respondent or not.
(b) Whether letter/decision dated 9-10-1994 is obeyed by the Association and implemented by all the other beverages manufacturers than the Respondent is stopped to call in question the said decision or not.
(c) The All Pakistan Beverages Manufacturers Associations and the Association itself confirmed that none of their manufacturer have fixed retail price of 250m1 bottle (unchilled) less than Rs,4.50 since 1-7-1994 than how can the respondent claim that he has fixed the retail price at Rs,4.25.
4. We have heard Mr. Sharifullah, Law Officer for/on behalf of the petitioner-department and perused the record appended with the petition.
5. The case of petitioner-department solely rests on the audit that was conducted by the Directorate General of Revenue Receipts Audit, Lahore (DRRA). The latter is a branch of Auditor General of Pakistan and its officers are neither sales tax officers under section 30 of the Act nor they are authorized under the Sales Tax Rules, 2005 to have access to premises and accounts of any registered unit. They do not even fall in the cigar of officers mentioned in section 2(28) of the Central Excises Act, 1944. The staff of DRRA is non-existent authority as for private registered units are concerned and they cannot have access to their books of accounts and other record under the sales tax/central excise laws. Their charter of function is given in Notification No,S.R.O. 1195(1)/90, dated 17-12-1990, which reads as under:-- "In exercise of the powers conferred by clauses (a) of subparagraph (2) of Paragraph 11 of the Pakistan (Audit and Account) Order, 1973 (President's Order No,21 of 1973), and in supersession of this Division Notification No,S.R.O.800(I)/87, dated the 6th October, 1987, the President is pleased to require the Auditor-General of Pakistan to audit the receipts of the Federal Government falling under the following Heads, namely:--
(a) 0110000 Taxes on Income (b)0120000 Property and Wealth Tax
(c) 0140000 Capital Gains Tax (d)0160000 Workers Welfare Tax
(e) 0170000 Tax on Professions, Trades and Callings
(f) 0180000 Capital Value Tax (g)0210000 Customs (h)0220000 Sales Tax
(i) 0230000 Federal Excise
(j) 0240000 Federal Excise on Natural Gas (k)0290000 Other Indirect Taxes The results of audit shall be included in the report to be submitted by the Auditor General of Pakistan to the President".
6. It becomes clear from the perusal of above notification that the President of Pakistan has required the Auditor-General of Pakistan to audit the receipt of Federal Government and not the record of the private enterprises/industrial units licensed/registered under the Sales Tax/Central Excise Laws. Thus the whole exercise conducted by the DRRA in this particular case in coram non judice.
7. In the result, this Reference being devoid of merit is dismissed. However, the Federal Excise and Sales Tax Department may conduct fresh audit of the respondent-unit, if so advised and permissible under the law. In case, any contravention is detected, the respondent-unit may be proceeded against in accordance with law.