' Through this order, we intend to dispose of above captioned appeal which has been filed at the instance of taxpayer/registered person, arising out of Order-in-Appeal No,146 of 2010 dated 29-7- 2010, passed by the learned Commissioner (Appeals), Inland Revenue, Faisalabad.
2. Briefly stated, the fact of the case as recapitulated from the available record are that the audit staff of Collectorate of Sales Tax Faisalabad conducted an audit of the appellant's record for the period November, 2000 to June, 2002 whereupon, a show-cause notice bearing C. No, 125 dated 2- 4-2003 confronting sales tax liability of Rs, 575,916 was issued that as to why sales tax to the above-extent may not be recovered under section 36 of the Sales Tax Act, 1990 along with additional tax and penalty under sections 33 and 34 ibid.
3. After culmination of adjudication proceedings, the case was decided as settled against all observations except against the charge of "refund received against fake and flying invoices" wherein a conditional judgment was passed and recovery of sales tax amounting to Rs,321,030 against invoices of Messrs Saad Textiles, Faisalabad was ordered subject to certain conditions by the learned Additional Collector (Adjudication), Faisalabad vide Order-in-Original No, 143 of 2004 dated 23-4-2004.
4. The registered person feeling aggrieved, and dissatisfied by the treatment given at adjudication stage, assailed the said order by filing of appeal before Commissioner (Appeals) who dismissed the same being time-barred under section 45B of the Sales Tax Act, 1990 as having been preferred after the lapse of 2201 days (6 years and 2 months approximately). Hence, this further appeal tiled before this Tribunal praying for setting aside the orders of the lower fora.
5. We have heard both sides and have perused the available record and also gone through the case-law submitted at bar.
6. Learned AR of the appellant vehemently contented that the first appeal was though preferred at belated stage yet it was not barred by elapse of time as the adjudication order dated 23-4-2004 passed by the Additional Collector is not only illegal, void and defective but also suffered from a lot of illegalities and improprieties hence no time-limitation would run against such kind of orders. In support of his contention, learned Advocate cited a number of judgments of superior Courts of the country.
6. On the other hand, the learned DR appearing on behalf of department although opposed the contentions of the learned AR but failed to put-forth any explanation to justify any deviation from the arguments/judgments advanced by the learned Advocate for registered-person. He has, however, simply supported the impugned orders of lower fora.
7. In fact, maintainability of show-cause notice as well as both orders of the authorities below i,e, order-in-original and order-in-appeal have been challenged on the following three grounds namely:--
(i) Impugned show-cause notice is illegal, invalid and without jurisdiction due to non-citing of relevant subsections of section 36 of the Sales Tax Act, 1990.
(ii) Impugned adjudication order is hit by time limitation in terms of proviso to subsection (3) of section 36 of the Sales Tax Act, 1990.
(iii) Conditional judgment given by the adjudicating authority is not only illegal but also contrary to the provisions of section 36(3) of the Sales Tax Act, 1990.
8. We have paid due consideration over the respective arguments addressed before us by the learned representative for the rival parties and have carefully gone through the record of the instant case as well as orders of authorities below. We have also gone through the case-law cited at the bar.
9. With regard to first ground of appeal, the learned Advocate assailed that the impugned show- cause notice is illegal and invalid as the adjudicating authority while issuing the subject notice has not incorporated the subsections of section 36 of the Act. Here, we deem it appropriate tore- produce the relevant provisions of section 36 of the Act as under:-- ' Section-36.---Recovery of tax not levied or short-levied or erroneously refunded:
(1) Where by reason of some collusion or a deliberate act any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to pay any amount of tax or charge or the amount of refund erroneously made shall be served with a notice, within five years of the relevant date, requiring him to show-cause for payment of the amount specified in the notice.
(2) Where, by reason of any inadvertence, error or misconstruction, any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to pay the amount of tax or charge or the amount of refund erroneously made shall be served with a notice within three years of the relevant date, requiring him to show-cause for payment of the amount specified in the notice."
10. A bare perusal of the provision of law referred to above makes it abundantly clear that the show-cause notice under subsections (1) and (2) of section 36 are two distinct and separate types of notices as different grounds and different period for service of notice in each subsection has been prescribed. Under subsection (1) for non-levy and short levy or erroneous refund, specific allegations of deliberate act or collusion between the assessee and the sales tax department staff has to be leveled with proper particulars in the show-cause notice which has to be issued within five years of the relevant date. Under subsection (2) if non-levy or erroneous refund is done due to inadvertence, error or misconstruction, specific details of such an event have to be entailed in the show-cause notice which has to be issued within three years of the relevant date. The operative part of the show-cause notice reads as under:-- "On the basis of above facts, Messrs Dilpasand Hosiery, Faisalabad are charged with the contravention of the above: mentioned provisions of law and they are called upon to show-cause notice as to why sales tax amounting to Rs, 575,916 may not be recovered from diem along with additional tax under sections 34 and 36 of the Sales Tax Act, 1990 and as to why penal action may not be taken against them under section 33 ibid."
11. From above, it is clear that the adjudicating officer did not invoke the subsections of section 36 of the Sales Tax Act, 1990 thus; the impugned show-cause notice is not only void but also nullity in the eyes of law due to non-citing of subsection (1) or subsection (2) of section 36 of the Act. The tax authority while issuing the subject notice will have to incorporate the grounds and reasons very clearly and explicitly so that it could be ascertained whether recovery of sales tax is made under subsection (1)or subsection (2) of section 36 of the Act. Failure on the part of authority while issuing show-cause notice without mentioning subsections of section 36 would render his order invalid and illegal under law. Non-citation of relevant subsections of section 36 renders the impugned show-cause notice illegal, without jurisdiction and invalid hardly to sustain before the test of judicial scrutiny. It is well-settled principle of law that a thing required by law to be done in certain manner must be done in the same manner as held by law or not at all as held by the Hon'ble Supreme Court of Pakistan in judgment reported as (2001 SCMR 838). We are of the opinion that it is legal right of a taxpayer to know as under what law he is being proceeded against. It is D legal obligation of the assessing authorities to communicate to the taxpayer as under what provisions of section 36 of the Act, he is being required to furnish his explanation. The higher appellate forums have conclusively held that where an assessee is deprived of his right to know about the law being applied to him, the proceedings taken against him will be of no legal consequences. Thus, the show-cause notice to the extent that it failed to invoke the applicable provisions of law is faulty, flawed and legally invalid. Consequently, the impugned order also becomes invalid because the appellant was not confronted with the specific provisions of law under which tax liability was adjudged. The impugned order based on a vague, defective and faulty show-cause notice is, therefore, void and legally not sustainable in the eyes of law. In this regard, reliance is placed on the judgment of Division Bench of Customs, Excise and Sales Tax Appellate Tribunal, Lahore cited as (GST 2004 CL 635) wherein it was held as under:-- "We have heard both the parties, perused the appeal file and considered the judgments referred to by the learned counsel for the appellant. A perusal of the show-cause notice reveals that the learned adjudication officer has not mentioned subsection of section 36 of the Sales Tax Act, 1990.
This is a sufficient ground to accept the appeal and set aside the impugned order, so we while placing reliance on the judgment of Hon'ble Lahore High Court, Multan Bench Multan cited as [2003 PTD 1797] (Messrs D.G. Khan Cement Company Limited v. The Collector of Customs, Sales Tax and Central Excise, Multan) accept the appeal and set aside the impugned order-in-original."
12. In another case cited as (GST 2005 CL 239), the Division Bench of Customs, Excise and Sales Tax Appellate Tribunal, Lahore held that: "From the above, it is clear that the learned adjudicating officer did not invoke the provisions of sections 11 and 36 of the Sales Tax Act, 1990. Six allegations have been leveled against the appellant in the impugned show-cause notice and in almost all the allegations section 36 has been invoked, but subsection of section 36 has not been invoked. We, therefore, placing reliance on judgment cited as (2001 SCMR 838) ,(Messrs Khyber Electric Lamps v. Collector Customs) accept the appeal and set aside the impugned order-in-original being based on defective show-cause notice."
13. We are also convinced by the arguments of the learned AR that no charge-sheet with regard to 'deliberate act or collusion' as envisaged under section 36(1) of the Act was given to appellant. At this juncture, it is not out of place to re-produce the provisions of section 36(1) of the Act which is as follows:-- "Where by reason of some collusion or a deliberate act any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to pay any amount of tax or charge or the amount of refund erroneously made shall be served with a notice, within five years of the relevant date, requiring him to show-cause for payment of the amount specified in the notice."
(Emphasis ours)
14. Bare reading of the said section reveals that no specific charge of 'collusion or deliberate act' was leveled in the subject show-cause notice under section 36(1) of the Act. In absence of any detail or proper allegation regarding 'collusion or deliberate act'; it cannot be said that the notice has been issued under section 36(1) of the Act. The prerequisites for a show-cause notice as required by law have not been served to the appellant; therefore, no straightforward demand notice for payment of sales tax could be issued. It is well-settled principle of law that a person being alleged should be provided a complete and comprehensive charge-sheet with all evidences in the show-cause notice which he could reply and defend. It is necessary under subsection (1) of section 36 of the Act, to show that the appellant had the knowledge or had the reason to believe that his acts are the result of 'collusion or deliberate' otherwise allegation would be vague and would not be in accordance with law. It is also not ascertainable from the grounds and reasons given in impugned show-cause notice whether the appellant knowingly and deliberately received the refund against invoices of the alleged supplier hence, the subject show-cause notice to this extent cannot be termed a valid show-cause notice in its true meanings as such, the same is liable to be vacated on this ground too. The judgment of honourable Lahore High Court in case of Messrs Inam Packages, Lahore v. Appellate Tribunal, Lahore reported as (2007 PTD 2265) is on all fours to the case of the appellant. The dictum laid down by the Court is as under:-- "10. To put it succinctly, show-cause notice can only be served under section 36 ibid,
(a) Any tax or charge has not been levied or has been short-levied or has been erroneously refunded;
(b) Such non-levy, short-levy or erroneous refund has been caused by the reason(s) of "some collusion or a deliberate act" under section (1) of section 36 of the Sales Tax Act or owing to inadvertence or error or misconstruction per subsection (2) thereof; and
(c) Within the period of five years under subsection (1) and three years under subsection (2) of section 36.
' The unarguable conclusion thereto is that mere non-levy, short-levy or erroneous refund of tax or charge cannot be the basis for a show-cause notice. It has to be founded upon non-levy, short- levy or erroneous refund caused by any of the above reasons which being the dominant factor also determine the period of limitation thereto. In the absence of any of the three conditions or the jurisdictional facts, the taxing authorities shall have no power or jurisdiction to serve a show-cause notice under section 36 ibid."
(Emphasis ours)
15. The Honourable Supreme Court of Pakistan in the case of Assistant Collector Customs and others v. Messrs Khyber Electric Lamp and others cited as 2001 SCMR 838 was also pleased to settle the similar provision of law i,e, section 32 of the Customs Act (IV of 1969), by holding that:-- "Show-cause notice under subsections (2) and (3) of section 32 of the Act are two distinct and separate types of notices and different grounds and different period for service of notice in each subsection has been prescribed. Under subsection (2) for non-levy, short-levy or erroneous refund, specific allegation of any collusion between the assessee and the Customs Staff has to be levelled with proper particular in the show-cause notice which has to be "served within three years of the relevant date whereas under subsection (3) if non-levy, short-levy or erroneous refund is done due to inadvertence, errors or misconstruction then show-cause notice to the importer has to be served within six months of the non short levy. If such specific particulars are not stated in the notice the notice would be vague and would not be in consonance with the requirement of subsections (2) and (3) of section 32 of the Act".
' Further that:-- . It is necessary under subsection (1) of section 32 of the Act to show that the declarant had the knowledge or had the reason to believe that declaration or statement made by him was untrue/false and in the absence of such allegation notice would be vague and would not be in accordance with the law. Similarly, notice under subsection (2) of section 32 of the Act must contain the allegation of collusiveness and notice under subsection (3) of section 32 of the Act should speak of inadvertence, error or mis-construction and without such allegation the notices would be defective and against the law."
(emphasis ours)
16. We therefore hold that the show-cause notice served upon the appellant by the adjudicating authority was patently illegal and without lawful authority as neither the allegations as specified under subsections (1) and (2) of section 36 were leveled nor even the subsections (1) and (2) of section 36 itself have been invoked in the operative part of the impugned show-cause notice. As such, all the orders based thereupon are also liable to be set aside. Validity of the show-cause notice is fundamental to the assumption of jurisdiction by the revenue authorities to pass the impugned orders and thus, the impugned show-cause notice and subsequent orders have herein been held to be patently devoid of jurisdiction and lawful authority.
17. With regard to second ground of appeal, the learned AR argued that impugned adjudication, order is hit by time-limitation as provided under proviso to subsection (3) of section 36 of the Act.
After perusal of record, we have observed that in the present case, the show-cause notice was issued on 2-4-2003 and consequent order-in-original was passed on 23-4-2004 after about 386 days instead it should had been passed within 90 days of issuance of show-cause notice or within such extended period as the Collector may 'for reasons' to be recorded in writing, fix provided that such extended period shall in no case exceed 90 days. Any extension for time of adjudication has neither been sought for from competent authority nor its mention was made in the impugned adjudication order. As such original time-limit and extended time-limit for adjudication shall in no case exceed 180 days in to. Contrarily, the impugned order is passed after lapses of 386 days without any lawful authority and legal excuse therefore, action taken therein is hit by time limitation provided under section 36(3) of the Sales Tax Act, 1990. In this regard, we will refer to the judgment of honourable Lahore High Court in case of Messrs Super Asia Muhammad Din Sons (Pvt.) Ltd., v.
The Collector of Sales Tax, Gujranwala reported as 2008 PTD 60. The relevant extract from the said judgment is as under:- "The claim of the revenue that the prescribed limitation of 45 days for completion of adjudication proceedings as provided through Finance Ordinance, 2000 and enhanced to 90 days by Finance Act, 2003 is merely directory cannot be accepted. It is settled law that where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen the prescription of tune is deemed directory. However, where a public functionary is empowered to create liability against a citizen only within the prescribed time, it is mandatory. The acceptance of contention of the revenue in that regard will make a provision of law redundant and nugatory.
Redundancy or superfluity of an Act of Parliament and a provision of law cannot be readily accepted All the more so, when the prescribed limit is beneficial for the citizen and restricts the executive power to touch the pocket of a tax payer thereby creating certainty that after its expiry even if there was a good case for creation of liability he will not be dragged in.
18. In another case, the Hon'ble Lahore High Court, Lahore in case of Messrs Tanveer Weaving Mills v.
Deputy Collector and others reported as (2009 PTD 762) while referring to the above judgment held as under:-- "As is clear from the language of the above proviso, it has limited the scope of the exercising of the jurisdiction after issuance of notice to basically 90 days or such extended period as the Collector after duly recording proper reasons in writing has fixed. However, it is again subject to the limitation in the manner that the said extension also cannot be for more than 90 days. The period for deciding the order-in-original after issuance of a notice under sections 36(1) and (3) thus is maximum 180 days including earlier 90 and extended 90 days. Obviously if the extension has been given by the Collector before the expiry of earlier 90 days."
19. With regard to third ground of appeal, the learned AR urged that adjudicating authority has given his judgment conditionally i,e, "It may be verified by the Collectorate that whether these amount have been paid or adjusted. In case, these are not verified as disputed or withheld then it is recoverable from the registered person under section 36" without determining final liability (if any) against the appellant which is not only illegal but also contrary to the mandatory provisions of subsection (3) of section 36 of the Act. For ease of reference, provisions of section 36(3) are reproduced hereunder: -- "Subsection (3) of section 36 of the Act: "(3). The officer of Sales Tax empowered in this behalf shall, after considering the objections of the person served with a notice to show-cause under subsection (1) or subsection (2), determine the amount of tax or charge payable by him and such person shall pay the amount so determined."
(Emphasis added)
20. It becomes vivid from perusal of provisions of subsection (3) of section 36 of the Act, the authority had to determine actual amount of tax payable by a registered person but in impugned adjudication order, the same has not been determined hence, order of adjudicating authority is vague, illegal and void as it is well-settled principle of natural law that there is no room for any intendment, equity or presumption particularly in fiscal matters.
21. We are fortified in our views that the order of the learned adjudicating authority i,e, Additional Collector is not only illegal, void ab initio but also passed in utter contravention of the mandatory provisions of law therefore, question of time-limitation does not arise against it. In this regard, we would like to refer the judgments of honourable Supreme Court of Pakistan cited as 2005 SCMR 69 and (2007 SCMR 729) wherein it has been laid down that; "No limitation runs against an illegal and void order."
22. If one needed, reference can be made to the judgments of honourable Supreme Court of Pakistan reported as (1987 SCMR 1543) and (2007 SCMR 834). The ratio decadent in the said judgments is as under:-- "Order passed in violation of mandatory provisions of law validity-Limitation-No period of limitation would run for challenging such order.
23. The dictum laid down by the honourable Supreme Court of Pakistan in a judgment reported as (1996 SCMR 856) is also attracted in the instant case which is as follows:-- "Void order and erroneous order-Limitation for setting aside-Bar of limitation can be ignored in respect of voids but not in respect of erroneous orders-Question of limitation would not arise in respect of judgments which were nullity in law, void or ultra vires-Where order was without jurisdiction and void, it need not be formally set aside."
24. We also find ourselves to be in conformity with the argument of the learned Advocate that since the impugned show-cause notice having remained illegal and without lawful authority therefore, all the subsequent proceedings conducted thereon are also illegal and void on the face of it. It is a well settled principle of law that where the foundation is defective, the entire edifice built thereon would fall to the ground. Reliance is placed on the judgment of honourable Supreme Court of Pakistan cited as (2007 SCMR 818) and (2007 SCMR 1835) Wherein their Lordships have laid down as under:-- "It is a settled law that when basic order is without lawful authority then the superstructure built on it would have to fall on the ground automatically."
25. Lastly, the learned AR stated that the law laid down by the Honorable Supreme Court of Pakistan in the above cited cases is binding by virtue of the Article 189 of Constitution of the Islamic Republic of Pakistan, 1973. In this regard, the learned AR has cited a judgment reported as (2007 PTD 1458) in case of Collector of Customs v. Messrs Achak Enterprises wherein it has been laid down as under:-- "It is settled law that once the issues are taken to the Apex Court and the issues are decided at that level then the controversy must be laid to rest. The judgments of honourable Supreme Court are binding on all the judicial and administrative forums in the country".
26. In view of what has been stated/discussed above, particularly in the light of law and judgments cited supra, we are inclined to accept the appeal filed by the taxpayer. Resultantly, the findings recorded by both the authorities below are declared not only against law but also contravening expressed mandatory provisions of the Sales Tax Act, 1990. Hence, the impugned show-cause notice as well as consequent orders of authorities below being illegal, void and without lawful authority, are accordingly set aside. Appeal of the registered taxpayer is succeeded as prayed for and disposed of in the manner and to the extent as dilated supra.
(Sd.)
(RAJA LEHRASSAB KHAN) JUDICIAL MEMBER ADDITIONAL NOTE ' AMJAD IKRAM ALI (ACCOUNTANT MEMBER).---While agreeing with the setting aside of the order of the Additional Collector of Sales Tax, Customs and Central Excise on the ground of being passed after expiry of limitation, I differ on the issue of invalidity of the show-cause notice under section 36.
As a result, the order is set aside on the point being barred by limitation.
2. Before dilation on the issue of validity of show-cause notice, at the outset a fact needs mention that the show-cause notice pertains to audit from June, 2000 to June, 2002 was issued on 2-4- 2003 and thus neither hit by limitation under section 36(1) nor limitation under section 36(2). The show-cause notice has been held to be illegal, thus void by law by my learned brother. In my opinion, despite non specification of subsection (1) or for that matter, subsection (2) does not change the deliberate nature of default specified in the show-cause notice. The show-cause notice goes in sufficient details of identify the deliberate intent, as default under section 33 of the Sales Tax Act has been confronted in all sub-paragraphs. Default under section 33 is leviable in the case of offenses. The opening words of section 33 specify various penalties against various offenses. Reference to section 33 leads to definite conclusion that action is being taken under section 36(1), which pertains to deliberate act and therefore liable to penal action.
3. Further each para in sufficient details dilates on all the nature of deliberate defaults which lead to taxpayer's compliance by way of paying the principal amount on paras pertaining to shortage of stocks, payment of principal amount of sale of paper bags and payment on sale of empty drums.
4. Not only this, the Deputy Collector issued show-cause notice identify sections of offenses. For instance, in the case of Yarn Stock contravention of sections 3, 4, 10 and 26 of the Sales Tax Act was confronted while in the case of sale of PP bags and DOP Drums, offenses under sections 3, 6, 11 and 26 were identified. Lending support to the view that the show-cause notice justifying the area of default would not be illegal is the case reported as 2001 SCMR 838. The Assistant Collector of Customs and others v. Messrs Khyber Electric Lamp wherein it was held as under:-- it is necessary under subsection (1) of section 32 of the Act to show that the declarant had the knowledge or had the reason to believe that declaration or statement made by him was untrue/false and in the absence of such allegation notice would be vague and would not be in accordance with law. Similarly, notice under subsection (2) of section 32 of the Act must contain the allegation of collusiveness and notice under subsection (3) of section 32 of the Act should speak of inadvertence, error or misconstruction and without such allegation the notices would be defective and against the law."
5. This clearly shows that the notice which does not specify the allegations would not be in accordance with law whereas in this case, each allegation was so specific as to lead specific and detailed response by the registered person. All paragraphs confronted resulted in payments except the para pertaining to fake invoices wherein it was contended that the refund had not been received by the registered person or that the specific persons from who goods were purchased were not fake.
6. Regarding the refund received against fake invoices, the Deputy Collector issued show-cause notice which identified the amount of refund received against purchase invoices of fake/suspect units and the taxpayer also responded to each alleged fake invoices. This also shows that the notice under section 36 was un-ambiguous. It would be interesting to refer to apex court's decision reported as 2007 PTD 967 wherein, the issue was that the taxation officer had issued notice under section 56 of the repealed Income Tax Ordinance, 1979 instead of section 65 of the Income Tax Ordinance, 2001. The apex court held issuance of notice under section 56 instead of 65 would not invalidate the entire proceedings by observing as under:- "The above objection was duly considered and examined by the Appellate Tribunal in detail and it was held that though a notice under section 65 of the Ordinance was required to be issued in respect of the income escaping assessment for the previous assessment years and proceedings for bringing the escaped income for the previous assessment years under the tax regime could not have been initiated under section 56 of the Ordinance yet such failure would not render the proceedings taken on the basis of notice under section 56 as illegal, without jurisdiction and void ab initio in view of the fact that by means of notice under section 56 of the Ordinance the Assessing Officer had disclosed his intention in clear and express terms and had brought it to the notice of the respondent that he intended to proceed in respect of his income for the previous assessment years as in his previous assessment they had escaped the previous assessment years under section 65 of the Ordinance, if he is satisfied that there has been escapement of assessment. Thus the fact that the Assessing Officer instead of issuing a notice under section 65, issued a notice under section 56 would neither invalidate the notice issued under section 56 of the Ordinance nor would render the assessments framed in pursuance of such notice as illegal and without jurisdiction."
7. The apex court clearly upheld the action despite wrong mention of section on the ground that the purpose of the law had been achieved.
8. The Tribunal in the case reported as 2007 PTD (Trib.) 307 has upheld the issuance of notice under section 114 of the New Income Tax Ordinance whereas it should have been issued under sections 59/69A, 61/62 of the repealed Income Tax 'Ordinance,1979 with the following observation:- - "In the proposition of the case in hand, -the calling of the return of income through notice under section 114(4) of the new Ordinance, 2001 being a procedural matter for initiation of proceedings in respect of obligations/liabilities created and incurred during the assessment period relevant to old Ordinance, 1979 would not lead to redundancy by calling the notice as illegal notice and the proceedings thereafter to be without any express savings provided in that regard in section 239 of the new Ordinance, 2001. After all the obligations/liabilities created and incurred under the law during the period falling under the old Ordinance, 1979 must be enforced because the provisions of assessm ent under the old Ordinance, 1979 (sections 59 and 59A, 61, 62; 63) have been saved in the new Ordinance, 2001 for computation of total income and for the tax payable in that regard. This position will advance the main principle of interpretation of the statutes that the law is always taken to be legislated for the advancement of its purpose and not for a futile exercise."
9. v Section 36 of the Sales Tax Act, 1990 also a procedural matter and thus since intent is sufficiently' clear it does not become invalid because of non-mention of subsection. In the case reported as 2009 PTD 1392, the Hon'ble Supreme Court held that the respondent, who was trying to take advantage of technicalities must fail. The observation of the apex court is as follows:-- "A perusal of section 65 of the repealed Ordinance shows that a period of five years was provided for issuing notice to an assessee to initiate proceedings for additional assessment in the cases of escapement of income from assessm ent, etc. Time-limit of five years, with certain changes is also envisaged under subsections (2) and (4) of section 122 of the Ordinance within, which power to amend an assessm ent may be exercised. Keeping the former and the present states of law in view, the irresistible conclusion appears to be that the assessments completed under the repealed Ordinance ought to be governed by the old law while the assessments of the post-enforcement period of the Ordinance are to be governed by the new law. This treatment of the two sets of assessm ents would also avert the anomaly that would be created if the assessments of the period up to 30th June, 2003 were excluded from the operation of the previous law on account of its repeal, and not included in the-new law on account of its being prospective in application. It appears that the respondents have been trying to take advantage of the technicalities, but we are afraid, they must fail. If their cases do not fall within the ambit of provisions of section 122 on account of the same being prospective, they cannot exclude their assessment from the purview of section 65 of the repealed Ordinance merely because of the lapse of the draftsman who omitted subsection (1) of section 239 at the amendment stage. Had the provisions of subsection (1) of section 239 of the Ordinance continued on the statute book, there would have been no ambiguity and no difficulty at all. In that eventuality, the assessments up to the period ending on 30th June, 2002 would be governed by the relevant provisions of the repealed Ordinance as if the Ordinance had not come into force."
10. Non-mention of subsection (1) or .(2) was merely a technicality sufficiently cured by dilation of deliberate defaults, narration of penalty provisions and compliance of the registered person.
11. In view this matter, I am of the view that the show-cause notice was validly issued.
(Sd.) AMJAD IKRAM ALI ACCOUNTANT MEMBER