' M.A. JAVED SHAHEEN (JUDICIAL MEMBER).---Titled appeal has been tiled by the department against the impugned Order-in-Appeal No,613 of 2008 dated 17-3-2008 passed by learned Collectorate of Sales Tax, Federal Excise (Appeal's), Multan whereby a refund claim amounting to Rs,1,283,900 for the tax periods August, 2002 to January, 2004 is involved.
2. Brief facts of the case are that Post Refund Audit Team Sales Tax, Multan received an information from the Collector Customs, Sales Tax and Federal Excise, Multan that Messrs Mugees Textile Mills, Multan bearing Sales Tax Registration No,075209-006-64, got refund on the basis of invoices issued by the suspected/blacklisted units/suppliers and refund of Rs,1,283,900 was erroneously sanctioned as the registered person/appellant claimed the same refund fraudulently on the basis of fake purchase invoices. Subsequently, the Collector, Customs, Sales Tax and Federal Excise, Multan authorized the staff under section 38 of the Sales Tax Act, 1990 and directed to conduct post refund audit to the check authenticity/ admissibility of input tax and export. The audit team asked to provide the requisite record for post refund audit but the appellant informed them that all the relevant record was submitted with the refund claim and their routine audit had already been conducted by the team of DARR and auditors of the department. The department observed that the registered person violated the sections 2(14), 2(37), 7(1), 7(2)(i), 8(1)(d), 10, 21(2), 25, 26(1) and 73 of the Sales Tax Act, 1990 read with Sales Tax Refund Rules, 2002, Chapter V of Sales Tax Rules, 2004, 2005 and 2006 Serial Nos. 30 to 33 of Clause "N" of Part-III of General Order No,3 of 2005 dated 12-6- 2004. On the basis of aforementioned facts, the respondent was called upon to show-cause notice dated 23-6-2007 as to why input tax amounting to Rs,1,283,900 got illegally may not be recovered from them under section 36(1) (deliberate act,) 11(2) and 48 of the Sales Tax Act, 1990 and why penal action under sections 33(4)(a)(c)(f), 33(6A)(a)(b)(c) and 37A of the Sales Tax Act, 1990, 33(9) (a)(b)(c), 33(11)(a)(c), 33(13) and 33(16) of the Sales Tax Act, 1990 (for the period July, 2005 onward) may not be taken against them for violation of the above mentioned sections of the Sales Tax Act, 1990. The adjudication proceedings culminated in passing an Order-in-Original No,462 of 2007 dated 10-9-2007.
3. Being aggrieved with the treatment meted out by the Adjudicating Officer, the registered person/respondent filed an appeal before the first appellate authority who, relying upon the judgments of the superior courts, held that the orders of blacklisting of the suppliers are not applicable to the period of purchase involved in this case and his findings are as under:- "Regarding fulfillment of provisions of section 73 of the Sales Tax Act, 1990, the DR reported that the appellant have provided record regarding compliance of section 73 to the extent of buyer. It is observed that the refund claim against the sales tax invoices issued by the supplier namely Qutab Weaving Industry Multan has also been declared inadmissible. Perusal of record also reveals that on the basis of audit report conducted by the respondent-Collectorate, show-cause notice to the appellant was issued and they were called upon. As to why their input tax of Rs,10,41,750 may not be declared inadmissible as their supplier namely Qutab Weaving Industry was black listed and the appellant failed to comply the provisions of section 73 of the Sales Tax Act, 1990. The case was decided vide Order-in Original No,541 of 2008 dated 24-8-2004. But the respondent Collectorate have again included the amount relating to the suppler namely Qutab Weaving Industry in this case which is duplication of Order-in-Original No,541 of 2004.Thus it is ordered that the amount of Rs,10,41,750 may be excluded from the impugned Order-in-Original being duplicate. Regarding the sales tax involved against the sales tax invoices issued by the supplier namely Fraz Traders and Madni Traders, the appellant purchased the goods prior to suspension/blacklisting of the suppliers thus the orders for blacklisting are not applicable on the purchases made prior to suspension/blacklisting of the suppliers. The DR has already reported that the appellant provided the record regarding compliance of section 73 to the extent buyer. This fact also proves that the appellant fulfilled the requirement of provisions of section 73 of the Sales Tax Act, 1990. In the light of above, it is held that the appellant is also entitled to claim the refund of sales tax on the basis of sales tax invoices issued by the supplier namely Fraz Traders and Messrs Madni Traders."
4. The AR of the registered person/respondent has contended that refund claimed related during the tax period from August, 2002 to January, 2004 while the units were blacklisted in 2007 'while the adjudication order was passed on 10-9-2007. It was contended by the learned AR that there was no violation of any section of the Sales Tax Act at the time of sale/purchase of goods between the registered person and blacklisted units. To substantiate his argument with regard to said issue, the learned AR relied upon reported and unreported judgment of this Tribunal as well as apex Court of the country cited as 2005 SCM R 492, 2010 PTD (Trib.) 163, 2010 PTD (Trib.) 1675 and S.T.A. No,1796/LB of 2009.
5. I have heard both the rival parties at length and have also gone through the relevant record and case-law cited at the Bar. After hearing the assertions made by learned counsel for the respective parties, I have noted that the period involved in the instant show-cause notice is related to the years August. 2002 to January, 2004 and during the period the said suppliers were operative. The said units were subsequently declared as blacklisted, if so, in the year 2007 after more than three years span and hence this order of blacklisting should not be operative retrospectively as is held by the superior courts of the country. The honourable Supreme Court of Pakistan has held in a case of Messrs Ellahi Cotton Mills Limited and others v. Federation of Pakistan reported in PLD 1997 SC 582 as under:- '....... Notification Executive order/notification, which is detrimental or prejudicial to the interest of a person, cannot operative retrospectively---Beneficial Executive Order/ notification, issued by an executive functionary can be givcn retrospective effect.
' Scanning of various judgments relied upon by the learned AR for the registered person in support of his contention also substantiate the view point urged by the learned A.R. Reliance in this behalf can safely be placed on the reported judgment of the honourable Supreme Court of Pakistan cited as 2005 SCM R 492 wherein it was held that:-- "Retrospectively -------------- Requirement Executive orders or notifications, which confer right and are beneficial, would be given retrospective effect and those which adversely affect or invade upon vested right cannot be applied with retrospective effect . ---"
6. In this view of the matter, the learned Collector (Appeals), relying upon the reported and unreported judgments of apex courts of the country as well .As this Tribunal, has passed the well- reasoned, sound footings and justified order. Therefore there is no error or lacuna in the impugned order which is upheld and maintained.
7. The departmental appeal is dismissed being devoid of any merit.