' JAWAID MASOOD TAHIR BHATTI (JUDICIAL MEMBER).--The appellant through above titled appeal has objected to the Sales Tax Order-in-Appeal No,1485 of 2008 dated 22-2-2008 passed by the learned Collector, Collectorate of Customs, Sales Tax and Federal Excise (Appeals), Faisalabad on the following grounds:
(i) That the impugned Order in appeal and order in original passed by the respondents are arbitrary as has been passed in mechanical manner without application of an independent judicial mind. The learned Collector (Appeals) has failed to properly interpret the law relevant to the case.
(ii) That the appellant is engaged in export of cloth and made-ups. The appellant purchased yarn get it converted into dyed fabrics and made-ups. Sales Tax refund is consistently claimed on purchases against Sales Tax invoices against which Sales Tax is already deposited by the suppliers in Government Treasury. The refund has been claimed on the basis of documents required to be produced by the appellant for a valid refund claim.
(iii) That the fact is that we have submitted reply of the show-cause notice mentioned in the impugned order in original along with all relevant supporting evidences in accordance with the requirements of standing Order No,3 of 2006 dated 2-11-2006 issued by worthy Collector Sales Tax, Faisalabad.
(iv) That the appellant has not violated any provisions of law and there was no mala fide or deliberate attempt to claim and receive inadmissible refund or withhold any payment of tax.
2. Learned counsel representing the appellant has objected to the impugned order rising, two preliminary objections. One is regarding jurisdiction of the adjudicating authority and the second is regarding time limitation. Regarding the jurisdiction issue, learned counsel has referred to section 45 of the Sales Tax Act, 1990 which was relevant at the time of passing the order and according to clause (iii) of subsection (1), the Assistant Collector has jurisdiction regarding the cases falling under subsection (2) of section 11 and section 36 provided that the amount of tax involved or the amount erroneously refunded exceeds ten thousand rupees, but does not exceed one million rupees. He has contended that in this case amount involved is more than one million rupees i,e, Rs,18,27,184.
3. Learned counsel in this regard has placed reliance on a decision dated 5-9-2009 in STAs Nos.94 and 105/LB/2008 whereby the Customs, Federal Excise and Sales Tax Appellate Tribunal while deciding cross appeals in the matter of Messrs A.T. Fabrics held that the adjudicating authority/Assistant Collector could at the relevant time only adjudicate upon the cases involving amount of tax or the amount erroneously refunded not exceeding one million rupees and has transgressed his jurisdiction which is unlawful. In another case referred by the learned Counsel reported as GST 2003 CL 63, the Hon'ble Lahore High Court, Lahore has held that in the cases where the show-cause notice was not issued by a person competent with the jurisdiction to issue the notice the subsequent proceedings including the impugned order were declared to be without lawful basis. The Hon'ble Supreme Court of Pakistan in a case reported as 2008 SCMR 240 has held that if a mandatory condition for the exercise of a jurisdiction before Court, Tribunal or Authority is not fulfilled, then the entire proceedings which follow become illegal and suffer from want of jurisdiction. Any order passed in continuation of these proceedings in appeal or revision equally suffers from illegality and is without jurisdiction. Learned counsel in this regard has also placed the order of this Tribunal dated 3-6-2010 in S.T.A.No,272/LB/2009 in the case of Collector of Sales Tax v.
Messrs Khurshid Spinning Mills Ltd. Wherein the appeal filed by the department has been rejected holding that the Assistant Collector who had no jurisdiction to entertain the case where the amount in question exceeded rupees one million.
4. Regarding the time limitation, learned counsel has contended that under subsection (4) of section 11 as it was applicable at the time of adjudication, it has been said that order under this section shall be made within 45 days of issuance of show-cause notice or within such extended period as an officer of sales tax, may, for reasons to be recorded in writing fix provided that such extended period shall in no case exceed 45 days. Learned Counsel has submitted that in this case, the show-cause notice has been issued on 10-4-2007 while the, order-in-original has been passed on 9-8-2007 which is after more than 100 days and in the order-in-original, no where it has been mentioned that the time of adjudication was in any case extended. Therefore, the order was declared to be having no legal consequences. The learned Counsel in this regard has referred to the decision of the Customs. Excise and Sales Tax Appellate Tribunal reported as [2010 PTD (Trib.)
81] wherein it has been held that in cases where orders were not passed within the time limit provided under the law, it was declared to be as without jurisdiction and was set aside and the show cause in this respect was also vacated. In another case referred to by the learned Counsel of the appellant reported as 2008 PTD 578, the Hon'ble Lahore High Court, Lahore has held that the department having made the order beyond a period of 45 days prescribed by law, the entire proceedings had become time-barred, which had to be set aside as the illegalities were so apparent that one could not agree with the counsel for the department with respect to the status of show-cause notice. The decision being time barred was set aside. In another decision reported as 2009 PTD 2004, the Hon'ble Lahore High Court has held that the order under section 36(3) of the Sales Tax Act, 1990 must be passed within the period prescribed in proviso to section 36(3) of the Sales Tax Act, 1990. Likewise, in another case reported as (2009) 100 Tax 32 (1-LC. Lah.), similar observations regarding limitation were provided in law in terms of section. 11(4) of the Sales Tax Act, 1990.
5. Learned D.R. Is unable to rebut the above decisions.
6. After considering the case-law referred to above and the relevant provisions of law as were applicable at the time of passing the order-in-original, I am of the considered view that the order has been passed by the Assistant Collector who was not having the pecuniary jurisdiction in this regard and the order has not been passed within the time period provided in the law, therefore, the order-in-original being without lawful basis on both counts is, therefore, cancelled. Consequently the impugned order of the learned Collector (Appeals) equally suffers from illegalities being without jurisdiction is also vacated. The appeal is allowed in the above manner.