' MIAN MUHAMMAD HANIF TAHIR (MEMBER (JUDICIAL)).--This judgment disposes of an appeal filed by Messrs Sufi Weaving Industries (Pvt.) Ltd., Faisalabad against Order-in-Appeal No,87 of 2008 dated 31-1-2008 passed by the Collector of Customs, Federal Excise and Sales Tax (Appeals), Faisalabad.
2. The fats giving rise to this appeal are that during scrutiny of refund claim for May, 2005, the STARR System observed certain discrepancies in the refund claim of the appellant i,e, abnormal tax profile, no sales to claimant shown in invoice summary and duplicate invoice, etc. Accordingly, the appellant was Issued a show-cause notice dated, 19-10-2006 as to why their refund claim may not be rejected under sections 10(4) and 11(2) of the Act. They were also charged with violation of sections 7, 8, 26 and 73 of the Sales Tax Act, 1990 read with Refund Rules, 2002 notified vide S.R.O.
575(1)/2002 dated 31-8-2002.
3. Upon culmination of adjudication, proceedings, the learned Assistant Collector Sales Tax (Refund), Faisalabad vide Order-in-Original No, 849 of 2007 dated 22-1-2007 rejected appellant's refund claim of Rs, 638,024 which was also upheld by the learned Collector of Appeals, hence, this further appeal filed by Messrs Sufi Weaving Industries (Pvt.) Ltd, before this Tribunal praying for set siding the orders of lower forums.
4. Arguments were heard. The learned counsel for the appellant argued that the impugned order- in-original as well as order-in-appeal has been passed in an arbitrary manner, which are illegal, void and liable to be set aside whereas the departmental representative contented that the instant appeal is time-barred and not tenable as the same is filed after expiry of time-limit of 60 days as provided under law.
5. I have examined record. Or the case carefully and considered the rival arguments advanced at the bar by both the sides.
6. The learned departmental representative at the very outset raised a legal objection that as much as the appeal in hand is time-barred by almost 20 months and it cannot be entertained in view of the specific legal provisions of section 46 of the Sales Tax Act, 1990 read with section 194- A(5) of Customs Act, 1969. When confronted the learned counsel for the appellant stated that since impugned appellate order of Collector (Appeals) is illegal, void and defective therefore, no time limitation runs against such kind of orders as also settled by the Hon'ble Supreme Court and High Courts of Pakistan in their judgments reported in (1996 SCM R 856), (2001 SCM R 1822), (2005 SCM R 69), (2002 PTD 87 (H.C. Kar.)) and (1998 PTD 2012) .Wherein their Lordships have laid down that; "No time limitation runs against an illegal and void order". He further assailed that rejection of refund has been made merely on the objections raised by the STARR Computer System which are provisional in nature having not been raised after due scrutiny of the records, of alleged suppliers and even not finalized so far, despite expiry of years. It is very astonishing that how the case progressed under provisional objections whereas, it should have been confronted on the basis of certain final objection and without any physical verification and material evidence in respect of each and every objection/supplier as contained in the impugned show-cause notice and also adjudged in the impugned appellate order without which all proceedings remain in thin air and have no legal stance at all, hence the impugned order of learned Collector (Appeals) is illegal and void ab initio. In this regard, learned counsel for the appellant also referred the judgments of Customs, Federal Excise and Sales Tax Appellate Tribunal, Lahore in S.T.A. No, 1137/LB of 2008 and in S.TA. No, 24/LB of 2008 wherein it was held that; "The learned counsel for the appellant stated that the case is based on the objections of STARR which was required to be further verified manually also and the objections are of provisional nature and not finalized i,e, subject to scrutiny for verification of input tax etc. I failed to understand how the case progressed under provisional objections whereas it should have been issued on the basis of final objections. The field formation should avoid issuing show-cause notice on the basis of scrutiny of the invoices A for input verification. It should be verified first and-after rejection by the department it should be converted into show-cause notice. Therefore, the case is remanded back to the original Adjudicating Authority after setting aside the Order-in-Appeal". In view of what has been discussed above, I am fortified in my views on the basis of settled law by the Hon'ble Apex Court as well as High Courts of Pakistan that no time-limitation would run against an illegal and void order. It is therefore held that the impugned appellate order of learned Collector (Appeals) suffered a lot of illegalities and improprieties is void, defective and illegal thus, the point of time-limitation does not arise against it.
7. Now coming up to the merits of case, I will get into the deeper appreciation of the issues involved in the instant case, 'there are several issues involved in this appeal and my findings on each issue are given as under.
8. The first issue as adjudged in the impugned appellate order pertains to rejection of refund on the objection of abnormal tax profile raised by the STARR (Sales Tax Automatic Refund Repository)
Computer System. The learned counsel for the appellant contented that they made genuine purchases from the alleged units having normal/operative status and payments against those transactions were also made through banking channel as required under section 73 of the Act but their refund has been rejected on the charges which are beyond the sales tax laws and no contravention of any law has been alleged in the impugned show-cause notice and consequent orders. After due consideration, I find that the term of "abnormal tax profile" is generated by the STARR System having no legal backing by the Sales Tax Act, 1990. No legislative enactment, no contravention of sales tax laws or notification issued thereunder or any specific instruction issued by Federal Board of Revenue on the subject matter is alleged in show-cause notice and the subsequent impugned orders are passed merely on assumptions and presumptions which is not warranted under law as laid down by Hon'ble Sindh High Court, Karachi in a judgment `reported as 2004 PTD 868 that; "The sales tax imposed on the basis of some assumption and presumption not warranted in law shall always be struck down. It is well-established principle of the law of taxation that an assessee can be subject to tax under a provision of law, which is unambiguous and clear" thus, rejection of refund on this ground is unlawful and illegal in eye of law. The term "abnormal tax profile" is nowhere quantified and qualified or even, not expressed/defined in the Sales Tax Act, 1990 therefore, rejection of refund on this ground is beyond scope of sales tax laws. The dictum laid down in a judgment as reported in 2000 PTD 3765 by the Hon'ble Lahore High Court, Lahore is attracted in the instant case that; "A levy can only be made by express and exact words". The observations given by the Hon'ble Supreme Court of Pakistan in a judgment as reported under (1993 SCM R 274) are also attracted in the instant case that; "The cardinal principles of interpretation of a fiscal statute seem to be that all charges upon the subject are to be imposed by clear and unambiguous words. There is no room for any intendment nor there is any equity or presumption as to a tax. A fiscal provision of statute is to be constructed liberally in favour of the tax payer and in case of any substantial doubt; the same is to be resolved in favour of the Citizen".
Reliance can also made to the judgment of Hon'ble Sindh High Court, Karachi in a case as reported in 2002 PTD 2457 wherein it was held; "A Court cannot imply anything, which is not expressed it cannot import provisions in the statute, so as to support assumed deficiency. The taxing statute must be interpreted in the light of what is clearly expressed". In view of the foregoing reasons, refund rejected on this charge is found admissible to the appellant and accordingly stance of appellant is accepted.
9. The second issue pertains to rejection of refund against the charge of duplicate invoice issued by the supplier unit to different persons against a single transaction. The learned counsel for appellant denied the allegation and produced sufficient documents. However, the learned DR objected that these documents are not attested/verified from the respective Collectorate of the alleged supplier as required under Standing Order No, 3 of 2006 issued by the Collector of Sales Tax, Faisalabad. The learned AR assailed that they had produced the relevant record against this issue not only at original adjudication stage but also before the first appellate forum but their refund had been rejected merely for want of attestation of such record under impugned standing order. I find that appellant's refund of sales tax for period in question has been rejected under Standing Order No, 3 of 2006 dated 2nd November, 2006 for want. Of "attestation/verification of supportive documents submitted under the relevant Sales Tax Refund Rules" for processing of their claim, otherwise, all supportive documents required under the said refund rules were provided but the same were not considered by the adjudicating authority as well as appellate authority who sought for attestation and verification thereof. Such verification or attestation was neither required under the Supreme Legislation i,e, the Sales Tax Act,1990 nor under Subordinate Law i,e, Sales Tax Refund Rules thus, the said standing order being an executive order cannot over rule the provisions of both substantive law and subordinate law. The observations contained in the landmark judgment of Hon'ble Sindh High Court, Karachi reported as 2006 PTD 1412 is applicable in the circumstances of instant case that; "The substantive rights of the citizens should not be crucified on the altar of some procedural administrative instructions, if otherwise the requirements of a beneficial legislation or notifications issued thereunder are fulfilled-Concession/exemption cannot be withheld on the ground of administrative instructions". In view of what has been stated above, the plea of appellant is accepted and refund against this charge is allowed.
10. The third issue involved in the titled appeal is rejection of refund due to STARR objection of no sales to claimant shown in invoice summary statement of supplier unit. The learned counsel for appellant produced the monthly invoice summary for period in question which was also found satisfactory by the learned D.R thus, rejection of refund against invoices of the alleged supplier on the titled charge is held to be illegal and unlawful.
11. Keeping in view the facts and circumstances of the case as well as the ratio decidendi available in the above cited judgments of the Honourable Apex Court and High Courts of Pakistan, I find the view point of the appellant correct. Consequently, the appeal is accepted, the impugned adjudication order as well as first appellate order are set aside and show-cause notice is vacated.
Parties be informed through registered post A. D/TCS.
' File be consigned to the record after completion.