' Vide this appeal, the department has assailed the order of the learned Collector (Adjudication)
Customs, Sales Tax and Central Excise, Faisalabad, Camp at Multan Order-in-Original No,236 of 2004 dated 104-2004.
2. Both the learned representatives appearing at the bar have been heard and record perused.
3. I Facts giving rise to the instant case are that on receipt of information that Messrs Naeem Corporation Chowk Shah Abbas, Multan was involved in the supply of cotton -lint/cotton waste of different textile mills without charging sales tax as well as other irregularities. To probe factual position of the case, the Revenue issued show-cause notice vide C.No,781/2003/Adj/ST/Co11/4377 dated 5-12-2003 wherein certain allegations were imposed against the appellant-respondent. On account of investigation, it was detected an Account No,0501-27847 titled Mr.Abdul Wahab from PICIC Commercial Bank, Multan where the huge amounts were received during the last two years.
The revenue further added that the observation revealed that all the amounts deposited in the bank account of Mr.Abdul Wahab were sent either by textile mills or whole seller engaged in the business of cotton lint/cotton waste. In continuation, the department prepared a contravention report and forward the same before the Collector (Adjudication) for the necessary action. On the basis of the facts mentioned supra, Messrs Naeem Corporation Chowk Shah Abbas, Multan were charged with violation of provisions of sections 2(9), (37), 3, 3-1A, 23, 26, 37(C) and 71 of the Sales Tax Act, 1990 read with S.R.O.1271(I)/96 dated 10-11-1996 and were called upon to show cause under section .11 ibid as to why evaded sales tax amounting to Rs,1,32,40,738 along with additional tax under sections 36(1)(2) and 34 of the Sales Tax Act, 1990 may not be recovered from them and why penal action under section 33 of the Sales Tax Act, 1990 be not taken against them. After receiving the show cause notice, the appellant-respondent submitted his written reply whereby he rebutted the facts and stated that the impugned show-cause, notice is misconceived, prejudicial, against the facts and based on erroneous interpretation of legal provision contained in the Act. Thereafter, the learned Collector after going through the facts and scrutinizing the relevant record concluded that the case has been prepared on the basis of hypothetical presumptions. The charges as enumerated in the show-cause notice issued under Endt.C.No,781/2003/Adj/ST/Co11/4377 dated 5- 12-2003 have not been established which is hereby vacated. Hence, the department has come up in appeal before the learned Appellate Tribunal on the following grounds:--
(I) That the impugned order is arbitrary, whimsical, without any reason and rhyme, against law and facts of the case.
(II) The respondent No,2 was involved in un-booked supply of cotton lint and concealed the supply, the receipts against these supplies were received in the account of Mr. Abdul Wahab who is the employee in Messrs Naeem Corporation.
(III) The instruments discussed above in the appeal memo confirm that the amounts deposited in the bank account of Mr.Abdul Wahab were sent either by textile mills or whole seller engaged in the business of cotton lint/cotton waste. Therefore, Mr.Naeem Ahmed owner of Messrs Naeem Corporation opened the bank account in the name of his accountant for receipt of sale proceeds in respect of supply of cotton lint which has not been declared in the sales tax record.
(IV) That while passing the orders the learned Collector (Adjudication) stated that the respondent No,2 provided record of exempt supplies whereas the record of exempt supplies was not provided to the appellant for verification of exempt supplies valuing Rs,73,559,655.
(V) The respondent No,2 deliberately avoided to produce the details of amount debited and credited in the bank Account No,0501- 00278470010, which is evident that receipts amounting to Rs,73,559,655 against the taxable supplies i,e,, cotton lint and cotton waste. Further the respondent No,1 also ignored the same.
4. The learned counsel Mian Abdul Basit, Advocate is appearing on behest of the assessee- respondent and supported the order of the Collector (Adjudication) and strongly opposed the objections/contentions raised by the Sales Tax Department being totally against the facts of the case as well as law. Further contended that the present appeal has been filed by the Assistant Collector Audit while in terms of section 46 of the Sales Tax Act, 1990 he is not competent to file the appeal on behalf of the department. In support of his contention he relied upon a case-law cited as 2007 PTD (Trib.) 2494 and also submitted a latest judgment of this Tribunal vide S.T.A.
No,1429/LB/2009 dated 15-6-2010. Further agitated that whenever the department issued show cause notice to the assessee-respondent, at that time the issue of consumption of electricity was not mentioned in the show-cause notice. Strength in this regard has also been acquired by the learned counsel for the assessee-respondent from a case-taw cited as 1987 SCM R 1840. Also contended that the department initiated the proceedings against the assessee on receipt of the information and detected an Account No,0501-0027847 from the PICIC Commercial Bank, Multan in the name of Mr. Abdul Wahab which is totally against the facts of the case. In this regard, the learned counsel submitted a case law of the Hon'ble High Court Karachi which is cited as 2004 PTD 868.
5. We have given anxious thought to the averments advanced by rival parties and perused the available record as well as the case-laws referred to by the learned counsel for the respondent.
After giving due consideration to the facts of the case in its entirety, we are of the considered view that the contentions raised by learned D.R. Have no substance. On the contrary, the learned counsel for the appellant-respondent has rightly knock down with the submission that the titled appeal has not been filed in accordance with law because the Assistant Collector has not empowered to file appeal at this forum. On the issue of appeal filing, we have also gone through the reported judgment cited as 2007 PTD (Trib.) 2494 as well as the latest judgment of Hon'ble Appellate Tribunal Inland Revenue vide S.T.A. No,1429/L of 2009 dated 15-6-2010 whereby the departmental appeal was dismissed.
6. Coming to the other issue relating to consumption of electricity the learned counsel has also rightly pointed out that the issue which was not raised in the show-cause notice that cannot be taken during the course of court proceedings. In this regard, we have also gone through the reported judgment submitted by the learned counsel for the respondent cited as 1987 SCM R 1840 in re: The Collector Central Excise and Land Customs and others v. Rahm Din and to reach the final conclusion relevant portion of the judgment is being reproduced hereunder:-- However, we are of the opinion that it is not necessary to determine this question of law in the facts of the present case as this petition can be disposed of on the short ground that the order of adjudication being ultimately based on a ground which was not mentioned in the show case notice, the order was palpably illegal and void on the face of it.
Respectfully following the ratio decidendi in the case-law cited supra we have no option except to dismiss the departmental appeal on this ground as well.
7. Coming to the third objection raised by the learned counsel for the respondent which relates to detecting an Account No,0501-0027847 from the PICIC Commercial Bank, Multan in the name of Mr. Abdul Wahad by the revenue. In support of his contention, the learned counsel for the respondent also provides a case law cited as 2004 PTD 868 whereby the learned High Court has resolved this issue. Relevant context of the case-law cited supra is being reproduced hereunder for ready reference.
Sales tax could not be assessed/imposed solely on the basis of Bank statement of the registered person without any evidence of corresponding taxable supply made in the course of taxable activity---Cash-credits appearing in the account book for which no satisfactory explanation was furnished could not be treated as the amount received on account of taxable supplies or in furtherance of taxable activity---Any Bank account of a registered person without any nexus to taxable supplies, could not be treated as amount received from such "supplies" and liable to sales tax.
8. Having taken regard to the submissions made by the rival parties as well as the case-law furnished by the learned counsel, we are of the considered opinion that the learned Collector (Adjudication) has rightly decided the matter. Further we observed that the account detected by the revenue is in the name of Abdul Wahad instead of Naeem Corporation which certainly rejects the departmental plea. Keeping in view the aforementioned discussion as well as in presence of the reported judgment cited supra, we have no ambiguity in our mind to dismiss the departmental appeal on the issue raised by the learned counsel for the respondent.
9. As a result, the departmental appeal is dismissed being bereft of any merits.