RAJA LEHRASSAB KHAN (JUDICIAL MEMBER).---Through this order, I intend to dispose of above captioned appeal which has been filed by a taxpayer, arises out of order-in-appeal No,3186 of 2008, dated 24-10-2008, for the tax period April 2007.
2. The relevant facts in brief are that the appellant in this case is a manufacturer-cum-exporter engaged in making zero-rated supplies of textile goods. The appellant against its zero-rated supplies, had claimed refund amounting to Rs,2,070,907, for the tax period April, 2007. The department issued show-cause notice calling upon the appellant to show cause as to why their refund claim may not be rejected in terms of section 11(2) of the Sales Tax Act, 1990, read with Rule 37 of the Sales Tax Refund Rules, 2006. The charge levelled in the show-cause notice were vehemently contested by the taxpayer, but the Assistant Collector (Refund) has partly accepted the taxpayer's refund claim, however, an amount of Rs,802,482 was rejected. Being aggrieved, the taxpayer assailed the orders-in-original before the learned Collector (Appeals) who vide impugned order had also partly accepted taxpayer's refund claim and disallowed an amount of Rs,434,460. Hence, this appeal before this Tribunal praying for setting aside of the orders of the lower fora.
3. I have paid due consideration over the respective arguments put-forth before me, have carefully studied the available record and have also perused the evidence brought forward by the rival parties. I have also gone through the case-law cited at the bar.
4. At the very outset, the learned counsel on behalf of taxpayer has taken a legal plea before this Tribunal and contended that impugned show-cause notice dated 1-12-2007 and all subsequent proceedings initiated for rejection of taxpayer's refund claim are illegal and without any lawful jurisdiction. In this regard, it is submitted by the learned AR that order-in-original for rejection of taxpayer's refund claim amounting to Rs,2,070,907, have illegally been passed by the Assistant Collector (Refund) under section 11(2) of the Sales Tax Act, 1990, as the Assistant Collector is not lawfully empowered to adjudicate the cases falling under section 11(2) being beyond the pecuniary limit of one million rupees as specified under clause (iii) of subsection (1) of section 45. To support his above contention, the learned AR relied on certain cases of the higher appellate authorities.
5: The learned AR of the taxpayer has taken a legal stance and challenged the maintainability of the orders of the authorities below on the ground of pecuniary jurisdiction as the amount involved in the instant case was Rs,20,70,907, whereas the Adjudicating Authority i,e, Assistant Collector had jurisdiction up to Rs,10,00,000 in terms of section 45 of the Sales Tax Act, 1990. Here, I deem it necessary to reproduce the relevant provisions of section 45, for ease of ready reference:-- "45. Power of Adjudication.--- (1) In cases involving assessm ent of tax, charging of default surcharge imposition of penalty and recovery of amount erroneously refunded or any other contravention under this Act or the rules made thereunder, the jurisdiction and powers of adjudication of the Sales Tax Officers shall be as follows:--
(i) Additional Collector Cases falling under subsection (2) of section 11 and section 36 without any restriction as to the amount of tax involved or amount erroneously refunded.
(ii)Deputy Collector (a) cases falling under subsection (1) of section 11(b) cases falling under subsection (2) of section 11 and section 36 provided that the amount of tax involved or the amount erroneously refunded exceeds one million rupees, but does not exceed two and half million rupees.
(iii)Assistant Collector 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.
(iv)Superintendent -------------------- (Emphasis ours)
6. From the bare perusal of above referred provision of law, it is crystal clear that the Assistant Collector in the instant case has transgressed his jurisdiction and powers of adjudicating by issuing show-cause notice upon which consequent proceedings were initiated for rejection of refund which is beyond the threshold limit of Rs,10,00,000 as admittedly in the case in hand, the amount of refund involved is Rs,20,70,907. Under section 45(1)(ii), it is the Deputy Collector who should have to issue show-cause notice and to pass consequent order. Therefore, the impugned order-in-original passed by the Assistant Collector (Refund) is illegal and without any lawful jurisdiction. It is a well settled principle of law that a power vested in an authority could only be exercised by that authority and by non-else. Exercise of that authority by any other, would be without jurisdiction. Reliance in this regard was placed on the same point decided by a Division Bench of this Tribunal in S.T.A. No,2728/LB of 2009, dated 3-6-2010, wherein, it was held that:-- "We have heard the learned counsel for both the parties and have gone through the relevant orders. Undoubtedly, the order- in-original in the present case has been made by the Assistant Collector who had no jurisdiction to entertain the case where the amount in question exceeded rupees one million. The learned D.R. Could not rebut the assertions made by the learned AR.
In this view of the fact, we are constrained to observe that this being the legal position, we do not find any legal infirmity in the impugned order, which is hereby maintained. Departmental appeal stands rejected".
7. The same was also followed by a Single Bench of this Tribunal in the case decided in S.T.A. No, 1007/LB of 2009, dated 18-9-2010:-- "And 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"
8. In another case reported as 2010 PTD (Trib.) 1636, it was held that:-- "Power of jurisdiction--Pecuniary jurisdiction--Void order--Assistant Collector, could, at the relevant time, only adjudicate upon the cases involving - amount of tax or the amount erroneously refunded not exceeding Rupees one million-Amount involved in the cases exceeded Rupees one million--Adjudication officer had transgressed his jurisdiction, which was unlawful and there ran no limitation against a void order-- passed by the First Appellate Authority on the ground of limitation was not sustainable in circumstances".
9. Admittedly, the impugned order in question was passed by the Assistant Collector without jurisdiction [maintained by the Collector (Appeals)] was without pecuniary jurisdiction. In the case like the present one, Hon'ble Supreme Court of Pakistan in a case reported as 2001 SCM R 1822, has held that: "Whenever orders are passed by an officer without caring whether jurisdiction vests in his or not, it prima facie reflects on his conduct as well as competency. It is also to be noted that whenever authority is exercised in such a manner then no other inference can be drawn except that the functionary has transgressed his jurisdiction for the consideration other than juridical one and the courts ceased with such order may recommend any action against the said officer because neither the executive authorities nor judicial forums will pass a wrong order because the jurisdiction in both the capacities is conferred upon such authorities to discharge their functions in accordance with law which has bestowed authority upon them to function in the capacity and if there is abuse of power by such officer then no hesitation should be felt in passing stringent structure against officer keeping in view norms of justice."
10. In the same situation, the Hon'ble Sindh High Court in the case reported as 2010 PTD 465, it was held that:-- "The exercise of jurisdiction by an authority is a mandatory requirement and its non-fulfillment would entail the entire proceedings to be coram non judice".
11. The learned DR failed to put-forth any explanation to justify any deviation from the judgments/arguments advanced by the Advocate for appellant. He has, however, pointed out that the appellant did not raise this legal point before the authorities below and even before this Tribunal, therefore, the same cannot be agitated at this belated stage.
12. I am not persuaded with this contention of the learned DR and state that any question of law which goes to the root of the case can be raised for the first time even before highest appellate forum. My view got support from the precedent reported as 2006 SCM R 783 and PLD 1965 SC 90.
13. The order in original passed by the Assistant Collector and upheld by the learned Collector is also not sustainable in the eyes of law. Reliance is placed on the reported judgment cited as 2008 SCM R 240, wherein it has been 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"
14. The learned DR has also pointed out that the powers exercised by the Assistant Collector in this case may be a technical error which cannot affect the whole proceedings. In this regard, the same point was also Agitated before the Sindh High Court in the case reported as 2010 PTD 465, where it was held that "The exercise of jurisdiction by an authority is a mandatory requirement and its non- fulfillment would entail the entire proceedings to be coram non judice.-Any transgression of jurisdiction for not being a technical defect would also render entire exercise of authority to be ab initio void and illegal."
15. To what has been stated/discussed herein above, particularly in the light of law cited above, I am bound to follow the ratio decidendi in the above referred judgments of the Hon'ble Supreme Court, High Courts and the Appellate Tribunal. Resultantly, both the orders of the authorities below being suffering from grave legal infirmities, are declared to be illegal and without jurisdiction and are hereby vacated. Appeal of the taxpayer for the period April, 2007, is succeeded as prayed for and disposed of in the manner and to the extent as dilated supra.
16. Since, I have decided the appeal purely on legal ground and the other grounds have become only academic interest, therefore, no comments are warranted on them.