' SHAHID JAMIL KHAN (JUDICIAL MEMBER).---Registered person through this appeal has assailed order-in-Appeal No,2016/LB of 2008 dated 19-4-2008 whereby Order-in-Original No,354/LB of 2008 dated 22-1-2008 rejecting claimed refund was upheld. Operative part of the impugned order is reproduced hereunder:-- "I have heard both sides and examined the record. The only issue involved in the appeal pertains to rejection of refund due to allegation of excess input tax claimed on packing material than 20%. The AR contended that the appellants are engaged in manufacturing and export, of candies, toffees, sweets and bubble gum etc. He contended that the allegation is incorrect as the appellants used packing material according to agreed parameters. The AR contended that the appellants produced all the relevant record to prove the usage of packing material up to 20% of value of goods but the respondent department illegally rejected admissible amount of refund.
The DR confronted the stance of the AR and contended that the appellants claimed refund excess amount of packing material more than actual quantity used as packing material and consumption of such a huge quantity of packing material is not feasible in such business. On confrontation by the DR the learned advocate failed to put forth any documentary evidence in support of his version. After due consideration, I find that the issue involved in the appeal only be resolved by probing into documents/record whereas the appellants failed to produce any documentary evidence to the effect that consumption of packing material was within the limit of 20% on the basis of what has been stated above, I find no merit in the appeal which is rejected accordingly and impugned order-in-original is allowed to remain in the field."
' Perusal of the order-in-original shows that main reason for rejecting the refund was that the appellant failed to substantiate its claim of refund by presenting the representative samples of the exported consignment drawn in presence of Custom Authorities at the time of export.
2. Learned counsel for the appellant submits that refund relating to tax period June 2006 was allowed only to the extent of 20% and excess-claim of refund against input tax paid on packing material was denied. He submits that the department had relied on an agreement between the department and the confectionery association where under 20% of input against packing material was agreed. Learned counsel has relied on an earlier judgment by this Tribunal reported as 2011 PTD (Trib.) 22 and has also placed a copy of the judgment of the honourable Lahore High Court reported as 2007 PTD 47. He argues that the issue is settled, honourable High Court has held that such agreement was not binding for the purpose of adjustment/claim of the input tax on packing material. D.R. In reply has opposed the arguments of the learned counsel. He argues that the plea was not raised by the appellant before any forum below. He adds that the only reason for rejecting the refund was non-submission of supporting documents/evidence against the claim in excess of 20%.
3. Learned representatives for the parties have been heard and record perused. Perusal of the orders below supports the contention of the D.R. That the reason for rejecting refund in relevant tax period was non-submission of supporting evidence. However, law settled on this issue can also not be ignored because the basis of rejecting the refund in excess of 20% was the agreement between department and the confectionery association. The honourable Lahore High Court in case Messrs Tauqeer Ashraf and Co. v. Collector 2007 PTD 47 has held that any agreement between an association of taxpayer and the revenue has no binding effect against the express provisions of law unless the same is supported by any superior or subordinate legislation. Relevant excerpt from the judgment by the honourable Lahore High Court is reproduced for facility:-- "We have heard the learned counsel for the parties. It is not disputed that the issue in hand already stands resolved by this Court in the case of Crescent Re-rolling Mills, Lahore v. Assistant Collector of Sales Tax Lahore [(2006) 93 Tax (H.C.Lah.)] = [2005 PTD 2436], While finding for the appellant in that case a Division Bench of this Court comprising one of us (Nasim Sikandar, J) stated following reasons to allow these appeals:-- ' Firstly, the appellants are correct in pointing out that mere minutes of meeting between the association and the Revenue were not enough to hang the existing tax regime fully supported by the provisions of section 3(1) of the Sales Tax Act, 1990. The view of the Tribunal that the matter stood settled by way of an administrative arrangement cannot be accepted as correct statement of law. Not only the imposition of tax but also change even in its rate or process of collection cannot be made without there being a superior or subordinate legislation. The minutes of the meeting between the Revenue and the association of a class of taxpayers is neither a superior nor a subordinate legislation. In our taxation system, it is correct that legislature at time delegates its powers to the Revenue wing of the Government to make changes giving exemption, or altering the rate of levy or the procedure to collect it. The exercise of such powers by the executive however is certainly conditional to the existence of a delegation in the superior legislation i,e, an Act of the Parliament. In the case in hand, it was necessary to formally legalize the terms of the agreement either by an Act of the Parliament or if the existing law so permitted, by way of a subordinate legislation in the form of a Notification. In absence of a delegated power and manifestation of that power through Notification or an amendment in the rules, the agreement between the association and the Revenue was at best a promise to pay at certain rate on the part of one party and to refrain from conducting audit by the other. That set of promise could very well be a gentleman's promise. However, it was not enforceable in law. No levy against the express words of the statute can be made on the basis of such an agreement much less to say of imposition of additional tax or penalties in case of non-compliance with the terms of agreement.
' Secondly, we are also not ready to accept the idea that the appellants were in any manner estopped from taking the peal of non-acceptance of the agreement. There is no estoppel against law. The agreement between the parties having never been reduced in the form of a statutory instrument, any person affected by the same could very well refuse to abide by such agreement even after having initially accepted the same. An association of taxpayers is different from a collective bargaining agent which is authorized, by law to negotiate and bargain on behalf of the laborers which it represents. An association of taxpayer has no role to play under the Sales Tax Act nor any of the rules framed there under. It can certainly represent the interest of its members when it comes to payment of a levy, its rate or even the procedure of its collection. This is clearly discernable from the present scheme of the Sales Tax Act, 1990. It also means that compliance of most of the members of the association cannot upgrade the agreement to the status of a statutory instrument. The levy of tax, its rate and collection does not depend upon the will or agreement of some gentlemen who suppose-to represent other taxpayers of thief class. The constitutional prohibition against imposition of tax except under the authority of a law as contained in Article 77 read with Article 127 also extends not only to the rate of tax and the procedure of its collection unless the superior legislation had delegated such a power and that power had been exercised strictly in terms and conditions of the delegation.
The agreement between the said association and the revenue as noted above, having never been converted into law through the process prescribed in that behalf no person could be forced to comply with the same. The plea that a person did for some time accepted the terms of an agreement and acted upon the same does not convert the agreement into a law."
4. We may, however, observe that the law laid down by the superior courts can only be followed if material facts of the case under consideration are identical with the facts under which the judgment was passed. In the instant case, taxpayer had not produced supporting evidence before the concerned authority. Unless the supporting evidence/ documents are filed, quantum of the acceptable refund could not have been determined. Under the circumstances, we deem it appropriate to remand the case to the refund authority currently having jurisdiction of the case with direction to re-examine the claim of refund, in question on the basis of evidence/document to be produced by the registered person. The agreement between the confectionery association and department, if any, is held illegal, therefore, not binding. Department is directed to determine the refund on actual basis after examining the supporting evidence. Both the orders below are accordingly vacated.
5. Appeal is allowed to the extent and in the manner indicated above.