MAULVI ANWARUL HAQ, J. --- As per facts gleaned from the writ petition and the replies filed by the respondents, the petitioner, a Firm registered in Pakistan, imported about 108 vehicles and got the same registered with respondent No. 1 (Motor Registering Authority) during the period May- June, 19.97. The Deputy Commissioner Wealth Tax (respondent No. 3) assessed Capital Value Tax
(CVT) in terms of Rule 8 of Capital Value Tax Rules, 1990 and collected an amount of Rs.
67,68,994/-. The petitioner feels aggrieved of a notice issued by the respondent No. 1 on 12.4.2005 calling upon it to deposit an amount of Rs. 2,41,031/- within seven days. This is stated to be additional Capital Value Tax at the rate of 15% and has reference to an audit objection raised by respondent No. 02.
2. Learned counsel for the petitioner contends that the respondent No. 1 has no jurisdiction to issue the said notice or to hold the petitioner liable for the additional Capital Value Tax. According to him, under Section 7 of the Finance Act, 1989 as amended from time to time read with Rule 8 of the Capital Value Tax Rules, 1990 only the respondent No. 3 or presently his successor-in-office can pass an order, of course, after a notice to and hearing the petitioner. Further contends that the additional tax was made chargeable through Finance Act, 1997, whereas the vehicles were admittedly imported in May-June, 1997, before the said Act became applicable on 1.7.1997. Learned Additional A.G., on the other hand, contends that as would be apparent from the contents of the impugned notice, the same has been issued because of an audit objection made by respondent No. 2 pointing out that since the Capital Value Tax was paid with a delay on 26.6.2000, additional tax at the rate of 15% per annum was payable, which amount has now been asked to be deposited.
Further explains that notwithstanding the fact that the amendment was made by means of Finance Act, 1997, the Capital Value Tax was due and was paid on 26.6.2000 and as such the penalty for late payment having already been introduced w.e.f. July, 1997, the same is recoverable.
Learned Law Officer, of course, does not question the contention that the jurisdiction in the matter does not vest in the respondent No. 1.
3. I have gone through the file of this case. There is no dispute that the vehicles were imported in May-June, 1997. The Capital Value Tax was not assessed or collected by respondent No. 1 but by respondent No. 3 on 26.6.2000. The provisions relating to the levy of additional tax were added in the Capital Value Tax Rules, 1990, framed by the Central Board of Revenue in exercise of powers conferred by Section 7(9) of the Finance Act, 1989. This has reference to sub-section (7) of Section 7 of the said Finance Act, 1989, as amended by the Finance Act, 1997. Before proceeding further, I may note here that under Section 7(4) of the Finance Act, 1989, the Capital Value Tax is to be collected by the person responsible for registering or attesting the transfer of the asset in respect of which the tax is payable, at the time of registering or attesting the transfer. It is obviously clear that in the case in hand the Capital Value Tax was to be collected by respondent No. 1. It is a matter of record that the Capital Value Tax, in fact, was not collected by respondent No. 1. Section 7(7) of the said Finance Act, 1989, lays down where the Capital Value Tax is not collected from the person liable to pay it, the tax may be collected by an officer designated by the Central Board of Revenue in this behalf from the said person, and the provisions of Section 32 of the Wealth Tax Act, 1963, are to apply to the collection of the Capital Value Tax as these apply to the collection of Wealth Tax. It is admitted that the tax was collected by the respondent No. 3 as a designated officer. Section 7(8) of the said Act, 1989, lays down that where any person fails to collect or having collected fails to pay the Capital Value Tax as required, he shall be personally liable to pay the tax alongwith additional tax at the rate of 15% per annum for the period for which such tax or part thereof remains unpaid.
4. Rule 4 of the Capital Value Tax Rules, 1990, provided that, inter alia, a registration Authority shall require the purchaser or transferee to pay the amount of Capital Value Tax and the tax so collected is to be credited to the Federal Government in the prescribed form. Rule 8 of the said Rules provides that where for any reason, the Capital Value Tax is not collected under Rule 4, the Deputy Commissioner of Wealth Tax appointed under the Wealth Tax Act, 1963, and having jurisdiction over the case of the purchaser or transferee may declare the Registration Authority, manufacturer, purchaser or the transferee, as the assessee in default and proceed to collect the tax as an officer designated under Section 7(7) by the Central Board of Revenue in this behalf. The role of respondent No. 1 in the matter, thus,. Is non-existent once the respondent No. 3 decided to proceed in the matter under the said Rule 8.
5. This matter involves adjudication by a competent Authority i.e. The - successor-in-office of respondent. No. 3. As to determine as to whether additional tax is liable to Be paid, if so by whom- and, of-course, the quantum thereof. No such adjudication ever look place. The writ petition accordingly is allowed inasmuch, as the notice dated 12.4.2005 issued'by respondent No. 1 is declared to be without lawful authority and void and further is disposed of with/the direction, that.
The matter of liability to pay additional lax may. Be. Adjudicated upon the successor-in office of the respondent No. 3. After giving an opportunity of hearing to the petitioner as well as respondent No. T and the person who collected the Capital Value Tax, as observed above. No orders as to costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.