' Titled appeal has been filed at the instance of the registered person against the impugned order dated 21-7-2010, passed by the Commissioner Inland Revenue (Appeals), Gujranwala. A number of objections have been raised by the appellant through grounds of appeal, however, at the time of hearing the learned AR raised a preliminary objection that proceedings initiated on the basis of audit conducted by DRRA, is not an authority figuring in the hierarchy of taxation authorities as provided by the Sales Tax Act, proceedings, initiated on the basis of such audit could not be considered legally valid, hence, unsustainable in the eye of law.
2. Both the parties have been heard and relevant orders perused. At the outset the learned AR has invited our attention to the issue in hand on the legal plain. He has contended that proceedings initiated on the basis of audit report made by the DRRA are illegal. He argued that the aforesaid agency is neither part of the Sales Tax Department nor has got any authority to conduct audit of the registered person. In this regard the learned AR referred to the judgment of the Custom, Excise, Sales Tax Appellate Tribunal reported as 2007 PTD (Trib.) 1600 and subsequently the same was affirmed by the Honourable Peshawar High Court vide judgment reported as 2010 PTD 1355. The operative part of the above mentioned judgment is as under:-- "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 enterprise/industrial units licensed/ registered under the Sales Tax/Central Excise Laws.
Thus the who exercise conducted by the DRRA in this particular case is quorum-non-judice."
3. It is pertinent to mention here that the Revenue filed an appeal before the Supreme Court of Pakistan against the said decision of the honourable High Court which was dismissed as having been withdrawn vide Civil Petition No,1580 of 2008 dated 13-4-2010.
4. The learned DR on the other hand failed to rebut the assertions made by the learned AR.
5. We, therefore, following the ratio settled in the supra cited cases, allow the appeal of the appellant for the reason that proceedings initiated on this basis of audit conducted by DRRA, are coram non judice, hence unsustainable in the eye of law. Resultantly the same is set aside.
6. Since we have decided the instant case on the legal premises, we do not feel the necessity to dilate upon the remaining grounds taken by the appellant.
7. Ordered accordingly.