The appellant/registered person has preferred a title appeal, assailing the impugned order dated 25.04.2008 passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Karachi.
2. Number of grounds have been taken up vide memo, of appeal appended with the main appeal.
However, at the very outset, the learned AR appearing on behalf of the appellant/registered person took the plea that the order-in appeal passed by the Collector is not sustainable in the eye of law on the legal premises. In this respect, he referred to para-4 of the order-in-appeal and submitted that since the impugned order was passed in violation of Section 45-B(2) of the Sales Tax Act, 1990.
It is contended by the learned AR that through the proviso of Section 45-B(2), to grant extension in time, the Collector (Appeal) has got to pass the order within the extended time but he must record reasons while doing the same. The learned AR further pleaded that para-4 of the order-in-appeal clearly shows that the learned Collector (Appeal) did not record any reasons while granting extension of 90 days. While concluding, the learned AR stated that due to non-compliance of Section 45-B(2), the whole edifice would fall flat since the order-in-appeal passed was coram non judice.
3. The learned DR has put up appearance, and was also assisted by the Senior Auditor of the department. However, they could not rebut the assertions made by the learned AR though, they tried to defend the impugned order.
4. We have heard the learned counsels for both the parties and have also gone through the relevant orders. Before we embark upon dilating the issue in hand, it would not be of of place to reproduce the relevant Section 45-B(2)
"Section 45-B (1 ......................................................................
(2) The Commissioner Inland Revenue (Appeals) may, after giving both parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appealed against: [Provided that such order shall be passed not later than one hundred and twenty] days from the date of filing of appeal or within such extended period as the Commissioner (Appeals) may, for reasons to be recorded."
Para-4 "The proceedings could not be finalized in this case within the stipulated time limit due to certain unavoidable circumstances and administrative reasons, therefore, an extension of 90 days was granted in terms of second proviso to sub-section (2) of Section 45-B, of the Sale Tax Act, 1990,"
5. We have given due consideration to the arguments addressed at the bar by the rival parties. We find ourselves in full agreement with the contention at the bar on behalf of the appellant/registered person. The perusal of the above reproduced para-4 and the provision of law leave no doubt that though the learned appellate authority had got the power to grant extension but he was under legal obligation to record the reasons for the same. Further perusal of para-4 of the order-in- appeal is - self-speaking that the learned Collector did not give any plausible reasons but granted the extension of 90 days on a flimsy ground "due to certain unavoidable circumstances and administrative reasons". It seems that the case was getting time-barred so the learned Collector used clutches of Section 45-B(2) ibid to resolve the problem of time limit which was being faced by the learned Collector. In law there is no room for such deviation or laxity. For the foregoing reasons we are constrained to observe that the order-in-appeal passed by the learned Collector was legally infirm, hence unsustainable in the eye of law. Resultantly, we allow the appeal filed by the appellant, the order-in-appeal as well as the impugned order are set aside. Since we have decided the instant appeal on the basis of legal issue, we do not see any necessity to dilate upon merits of the case.
6. The appeal of the registered person succeeds as indicated above.