1. YAHYA AFRIDI, J.---Messrs National Steel Mills and Re-rollers (Pvt.) Ltd. Has instituted the present reference agitating the following questions of law:-- "(I) Whether under the facts and circumstances of the case especially considering the conduct of the respondent, the learned Tribunal justified in entertaining the respondent's time barred appeal which was hit by limitation on many counts.'
(II) Whether under the facts and circumstances in view of amendments (w,e,f, 1st July, 2005) brought by Finance Act, 2005, inter alia, in sections 45-B and 46 of the Sales Tax Act, 1990 the department of sales tax was barred to invoke the jurisdiction under section 45-B ibid of the learned Collector Appeals.
(III) Whether in view of the amendments (w,e,f, 1st July, 2005) brought by Finance Act, 2005, inter alia, in sections 45-B and 46 of the Sales Tax Act, 1990, the department, of sales tax was barred EITHER to invoke the jurisdiction under section 46 ibid of the learned Tribunal for assailing the Order-in-Original passed by the officer below the rank of Collector.
(IV) Whether under the facts and circumstances of the case and in view of the provision of section 46(4) ibid, the learned Tribunal's Order on merit is void ab initio for traversing beyond the scope of appeal wherein only the order-in-appeal was prayed to be set aside which had a sole merit of non-entertainment of their appeal and yet the order-in-original was set aside and it was further directed for recovery of the principal amount of the sales tax along with additional tax under section 34 and 5% penalty under section 33 of the Sales Tax Act, 1990 that is too without issuance a show-cause-notice to the applicant.
(v) Whether under the facts and circumstances of the case, the pleading in Appeal was proper in form and signed by competent Officer.
(VI) Whether under the facts and circumstances of the case, the honorable Tribunal not erred for holding that during July to October, 2004 unit the applicant mode of discharging of tax liability was in violation of sections 3, 7,-A and rule 89(2) of the Special Procedure Rules, 2004 notified vide S.R.0.484(1)/2004."
2. The facts leading to the present Reference are that the Collectorate of Sales Tax and Central Excise, Peshawar ("Department") served a show-cause notice dated 14-5-2005 ("Notice") upon Messrs National Steel Mills and Re-rollers (Pvt.) Ltd., ("Company") for payment of Rs,6.745 million under section 36(1) along with Additional Sales Tax under section 34 and penalty under section 33(2)(cc) of Sales Tax Act, 1990 ("Act") for having illegally adjusted the said amount against its carried forward amount of Rs,12.609 million. This adjustments, the Collectorate alleged in the Notice, was an evasion of sales tax for violating sections 3 and 7-A of the Act and Rules 89(2) of the Special Procedure Rules, 2004 ("Rules"). The Company contested the claim of the Department. The matter was adjudicated and was decided in favour of the Company vide Order-in-Original No,24 of 2005 vide dated 24-6-2005. ("order-in-original"), which was admittedly received by the Department on 1-8-2005.
4. After the passing of the order-in-original and before the same was received by the Department, the Parliament promulgated Act No,VII of 2005 ("Finance Act, 2005") whereby provisions of sections 45-B and 46 of the Act were amended. The true significance thereof can be appreciated, when we compare the said provisions of the Act before and after the said amendment. The particulars of the same are as follows:-- PRIOR AFTER
46. Appeals to Appellate, Tribunal.---(1)
2. Any person46. Appeals to Appellate Tribunal.---(1)
3. Any person PRIOR AFTER Including the Sales Tax Department, aggrieved by--
(a) any decision or order passed By a Collector or an AdditionalCollector of Sales Tax under sections 11, 36 or45;
(b) any order passed by the Collector of Sales Tax (Appeals) under section 45-B; and
(c) any order passed by the Board or the Collector of Sales Tax under section 45 A, may, within sixty days of the receipt of such decision or order, prefer appeal to the Appellate TribunalIncluding the Sales Tax Department, aggrieved by--
(a) any order, passed by the Collector under subsection (4) of section 45A or the Collector of Sales Tax(Appeals) under section 45B; and
(b) any order passed by the Board or the Collector of Sales Tax under section 45-A, may,within sixty days of the receipt of such decision or order, prefer appeal to the Appellate Tribunal.
4. PRIOR AFTER 45-B.---Appeals.---(1) Any person, including the Sales Tax Department, aggrieved by any decision or order passed under sections 10, 11, 46, 45 or 66, by an officer of Sales Tax below in rank to Additional Collector may, within thirty45-B.---(1) Any person, other than the Sales Tax Department, aggrieved by any decision or order passed under sections 10, 11, 36, 45 or 66 by an officer of Sales Tax may, within thirty days of the date of receipt of such decision or order, prefer days of the date of receipt of such decision or order, prefer appeal to the Collector of Sales Tax (Appeals).appeal to the Collector of Sales Tax Appeals.
5. On receiving the order-in-original on 1-8-2005 and feeling aggrieved thereof, the Department instituted an appeal against the same before the Customs, Sales Tax and Central Excise (Appellate) Tribunal ("Tribunal") at Peshawar on 10-9-2005. The said appeal was returned to the Department by the Tribunal vide order dated 13-9-2005 with directions that:-- "This appeal was presented to this Custom Excise and Sales Tax Appellate Tribunal, Peshawar Bench on 10-9-2005 by Collector of Sales Tax and Central Excise, Peshawar through Assistant Collector Legal Division Sales Tax and Central Excise which is returned to the appellants today on 13-9-2005 on the analogy of Order VII, Rule 10 Civil Procedure Code, 1908 for presenting the same to the Collector (Appeals), Peshawar as this Tribunal has got no jurisdiction to entertain it for lack of jurisdiction in view of the amendment made in section 46 of the Sales Tax Act, through Finance Aet; 2005 according to which appeal against the order of Additional Collector Customs (Adjudication)
5. Peshawar lies to the Collector (Appeals) Peshawar and not to this Tribunal."
6. Accordingly, the Department filed an appeal before the Collector (Appeals), Peshawar, which was, along with nineteen other appeals, dismissed vide order dated 4-1-2006 on the ground that the Department was not entitled to file the said appeal under the amended section 45-B of the Act.
7. Aggrieved thereof, the Department moved an appeal before the Tribunal at Peshawar, which too was again returned vide order dated 5-9-2006 with directions that;--- "....Jurisdiction of cases pertaining to sales tax of Hattar Industrial Estate, District Haripur exclusively vests in Bench-I and II, Islamabad vide S.R.O. 1199(1)12005 dated 26-11-2005, therefore, this sale tax appeal by Collector Sales Tax in respect of National Steel Melters and Re-rollers (Pvt.) Ltd., Hattar Industrial Estate is directed to be returned for want of territorial jurisdiction to the appellant for presentation to the proper forum."
8. In compliance with the aforesaid orders of the Tribunal, the Department again moved the appeal before the Tribunal at Islamabad. The Tribunal vide its impugned order dated 15-11-2008 was pleased to declare the appeal to be within time and filed by a competent person. It also held that the Company could not avail the adjustment on the basis of the sale tax returns in view of the special procedure provided under Rule 89(2) of the Rules. It was also stated that the Company could apply for refund, for which, it had to apply under the specific provision provided under the Act. However, the Tribunal, despite rendering afore mentioned findings against the Company, provided it with an opportunity to adjust the carried forward taxes in the following terms:- "it is accordingly ordered that the appellant i,e, the Revenue Department shall provide an opportunity to the respondents to produce documentary evidence i,e, receipt of purchases of raw materials and payments of proceeds exceeding Rs,50,000 through the Banking instruments as per provisions of section 73 of the Sales Tax Act, 1990 and other documentary evidence to prove that their, income tax exceeded the output tax for the financial year 2003-2004 and the carried forward amount of Rs,12609437 had correctly been declared in the month of June, 2004 and allow the adjustment post facto on satisfaction that the declarations made by the respondents through the monthly sales tax returns for the tax period of 2003, 2004 and from July 2004 to October, 2004 were correct and true. In case of failure of the respondents to produce the requisite record and to satisfy the Collector of Sales Tax and Federal Excise about the correct adjustment, the appellant shall be within the right to recover the principal amount of the sales tax of Rs,6745230 along with additional tax under Section 34 and penalty at the rate of 5% under section 33 of the Sales Tax Act, 1990. The Order-in-Appeal No,746-65/205 is set aside to the extent of this appeal which is disposed of in terms of the above orders.
6. Announced. Parties may be informed accordingly." (Emphasis provided)
9. In view of the above directions rendered by the Tribunal, it seems strange for the Company to agitate the present Reference, as the contention of the Company has in fact been substantially accepted by the Tribunal. The Tribunal has essentially, in order to verify the particulars of the input and output tax stated in the returns, directed the Company to provide supporting evidence to the Department.
10. The Company seeks the present Reference on legal issues, which require consideration. Hence, the same are answered, in seriatim:-- Question of Law No .I.
7. "Whether under the facts and circumstances of the case, especially considering the conduct of the respondent, the learned Tribunal justified in entertaining the respondent's time barred appeal which was hit by limitation on many counts.
8. The rights, privileges, advantages and benefits, which accrue to any person under the provisions of a statute prior to any amendment therein would be protected and not affected, in any manner, by any provisions introduced through the same.
9. In the present case, the Department had a right of appeal against an order-in-original provided under section 46 of the Act before the Tribunal. However, the said right of appeal was taken away from the Department through the Finance Act, 2005 promulgated by the Parliament, which received the assent of the President of Pakistan on 29th June, 2005. It was notified and published in the official Gazette on 1st July, 2005. The Finance Act, 2005 expressly provided that the same would take legal effect from 1st July, 2005. In view of the clear provision regarding its applicability, the valuable rights including the right of appeal, which had accrued in favour of the Department prior to the amendment introduced in section 46 of the Act through the Finance Act, 2005 would be protected and remain intact in favour of the Department.
10. The general principles of interpretation of statutes on the matter have been clearly explained in NS Bindra's Interpretation of Statutes (9th Edition), wherein it has been clearly stated that:- "The following propositions are well-established:
(i) The legal proceedings of a remedy,, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding.
(ii) The right of appeal is not a mere matter of procedure but is a substantive right.
(iii) The institution of the suit carried with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit.
(iv) The right of appeal is a vested right and such a right to enter the superior court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of ate suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal.
(v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise."
11. "....There can be no doubt that the right of appeal has been affected by the new provision and in the absence of an express enactment. This amendment cannot apply to proceedings pending at the date when the new amendment came into force. It is true that the appeal may have been filed after the Act came into force but that circumstance is immaterial for the date to be looked into, for, this purpose is the date of the original proceeding which eventually culminated in the appeal."
12. In this regard, the august Supreme Court of Pakistan in Adnan Afzal v. Capt: Sher Afzal (PLD 1969 SC 187) relying on Colonial Sugar Refining Company Ltd. v. Irving (1905 AC 369) held that:-- "...`if the matter in question be a matter of procedure only', the provisions would be retrospective. 'on the other hand, if it be more than a matter of procedure, if it touches a right in existence at the passing of the Act', then 'in accordance with a long line of authorities extending from the time of lord Coke to the present day', the legislation would not operate retrospectively, unless the legislation have either 'by express enactment or by necessary internmentgiven the legislation retroactive effect. "
13. The Supreme Court went on to explain by stating that:- "The principle has been admirably put by Crawford in his Book on Construction of Statutes, 1940 Edition, page 581, as follows:-- "As a general rule, legislation which relates solely to procedure or to legal remedies will not be subject to the rule that statutes should not be given retroactive operation. Similarly, the presumption against retrospective construction is inapplicable. In other words, such statutes constitute an exception to the rule pertaining to statutes generally. Therefore, in the absence of a contrary legislative intention, statutes pertaining solely to procedure or legal remedy may affect a right of action no matter whether it came into existence prior to, or after the enactment of the statute. Similarly, they may be held applicable to proceedings pending or subsequently commenced. In any event, they will, at least, presumptively apply to accrued and pending as well as to future actions."
14. In a more recent case of Khalid Qureshi v. United Bank Limited (2001 SCMR 103) the Hon'ble Supreme Court relying on precedents went on to hold that:- "Thus, a statute purporting to transfer jurisdiction over certain causes of action may operate retroactively. This is what is meant by saying that a change of forum by a law is retroactive being a matter of procedure only. Nevertheless, it must be pointed out that if in this process any existing rights are affected or the giving of retroactive operation cause in convenience or injustice, then the courts will not even in the case of procedural statute, favour an interpretation giving retrospective affect to the statute."
15. The aforementioned proposition of law has been consistently followed by the superior courts in our jurisdiction. Reliance may be placed on Messrs Rais Khan's case (1996 SCMR 83), Pakistan Steel Mill's case (2002 SCMR 1023), Mian Rafiuddin's case (PLD 1971 SC 252), Mirza Mehmood Sharif Baig's case (PLD 1973 Lahore 114), Barkat Ali's case (1980 CLC 713) and Devachand Muljimal and otherscase (PLD 1968 Karachi 107).
16. This takes us to another aspect, peculiar to the present case, regarding the "act of the court", whereby the Tribunal vide its order dated 13-9-2005 returned the appeal to the department for filing the same before the Collector Appeals. The appeal of the Department was returned on three different occasions by the appropriate forums and finally on 12-4-2006, the appeal was filed before the Tribunal at Islamabad and decided. The Department had under the original un-amended provisions of section 46 of the Act, filed the appeal within sixty days from the receipt of the order- in-original, before the proper appellate forum i,e, the Tribunal. Thus for the "act" of the Tribunal, the Department should not "suffer".
17. The settled principle of "actus curiae neminem gravabit" (an act of the Court shall prejudice no person) would surely apply to the present case. In this regard this court relying on celebrated judgments of the august Supreme Court of Pakistan in Mst. Baz Khana's case (PLD 2005 Peshawar 214) held.
18. "Assuming for a while that the appellants did not act with due diligence by prosecuting their remedy in a wrong forum, nonetheless, they, before it was too late, could be put on the right track by the learned District Judge, the day the memorandum of appeal was presented before him. This is what preliminary hearing stands for. In any case when it was entertained and even admitted by the learned Judge without adverting to its competency on account of his pecuniary jurisdiction, all the time so consumed from its entertainment to its return in his court, cannot be debited in the account of the appellants, and thus they cannot be allowed to suffer for the act of the Court. Had it been returned on the first date of hearing the appellants could have presented it in this court well within time. Since the time was consumed due to the act of the Court, it will certainly constitute a sufficient cause for condonation of delay as according to the principle enshrined in the maxim actus curiae neminem gavabit, 'an act of the Court shall prejudice none."
19. This settled principle has been consistently followed and annunciated in the subsequent decisions of the august Supreme Court of Pakistan in Mst.Razia Jafar's case (2007 SCMR 1256) and Akbar Shah's case (2010 SCMR 1408).
20. Accordingly, this court hold that the appeal filed by the Department was within time and was not hit by limitation.
21. Question of Law No.II.
22. Whether under the facts and circumstances in view of amendments (w,e,f, 1st July, 2005) brought by Finance Act, 2005, inter alia, in sections 45-B and 46 of the Sales Tax Act, 1990 the department of sales tax was barred to invoke the jurisdiction under section 45-B ibid of the learned Collector Appeals.
23. For the reasons stated in answer to the Question of law No,1, this Court holds that the provisions of amended sections 45-B and 46 of the Act were prospective in nature and did not affect the right of appeal vested in the Department under the un-amended provisions of the Act.
24. Question of Law No. III.
25. Whether in view of the amendments (w,e,f, 1st July, 2005) brought by Finance Act, 20U5, inter alia, in sections 45-B and 46 of the Sales Tax Act, 1990, the department of sales tax was barred EITHER to invoke the jurisdiction under section 46 ibid of the learned Tribunal for assailing the order-in- original passed by the officer below the rank of Collector.
26. For the reasons stated in answer to the Question of law No,1, this Court holds that the provisions of amended sections 45-B and 46 of the Act were prospective in nature and did not affect the right of appeal vested in the Department under the un-amended provisions of Act. Furthermore, it is also reaffirmed that the condition of filing of the appeal by an officer of the rank of Collector was not provided for in the un-amended provisions of section 46 of the Act. The said condition was introduced through the Finance Act, 2005 and thus cannot be applied to the right of appeal available to the Department prior to the said amendment.
27. Question of Law No.IV Whether under the facts and circumstances of the case and in view of theprovision of section 46(4) ibid, the learned Tribunal's Order on merit is void ab initio for traversing beyond the scope of appeal wherein only the order-in-appeal was prayed to be set aside which had a sole merit of non-entertainment of their appeal and yet the order-in-original was set aside and it was further directed for recovery of the principal amount of the sales tax along with additional tax under section 34 and 5% penalty under section 33 of the Sales Tax Act, 1990 that is too without issuance a Show Cause Notice to the applicant.
28. Appeal is the continuation of the original proceedings. The order-in-original and the order of the original forum finally merged into the order of the appellate forum. Thus setting aside the appellate order would have consequences upon the order of the order-in-original of the original forum. Even otherwise, this Court finds that the Tribunal has correctly dealt with this issue. Moreover, the issue raised by the Company would not have any adverse effect on the final outcome of the impugned decision of the Tribunal.
29. Question of Law No.V.
30. Whether under the facts and circumstances of the case, the pleading in Appeal was proper in form and signed by competent Officer.
31. For the reasons stated in our discussion relating to Question of law No,III, this court finds that the appeal has been filed in a proper and legal manner by the competent officer of the Department.
32. Question of Law No .VI.
33. Whether under the facts and circumstances of the case, the honorable Tribunal not erred for holding that during July to October 2004 unit the applicant mode of discharging of tax liability was in violation of sections 3, 7-A and rule 89(2) of the Special Procedure Rules 2004 notified vide S.R.O.
34. 484 (1)/2004.
35. This question of law was not argued by the learned counsel for the parties. However, this court finds that the Tribunal has in fact correctly appreciated the facts of the case and applied the relevant provisions of the Act and the Rules.
36. This court would again emphasize that the Tribunal in its impugned decision has given an opportunity to the Company to produce the relevant record before the appropriate officer of the Department for verification of the input and output taxes claimed by it in its monthly statements in order to avail the adjustments. It was further directed that only in case the Company fails to verify its said claims, the Department could be within its right to recover from the Company the principal amount of sale tax of Rs,6.745 million along with additional taxes and penalties determined by the Tribunal.
37. Conclusion.
38. 'Accordingly, the present reference is dismissed, the impugned decision of the Tribunal is maintained and the questions of law raised in the present reference are answered in the above terms.
39. The Registrar of this Court shall send a copy of this judgment to the Customs, Sales Tax and Central Excise (Appellate) Tribunal at Islamabad, which shall pass such orders as are necessary to dispose of the case in just and proper compliance to this judgment.