CH. MUHAMMAD ASGHAR PASWAL, MEMBER (JUDICIAL).---Above-captioned appeal has been filed by the Collector, Sales Tax, Federal Excise, Faisalabad against the impugned Order No. 168 of 2006, dated 31-10-2006 passed by the Collector, Customs, Sales Tax and Federal Excise (Appeals), Faisalabad on the ground that the Order-in-Appeal No. 168 of 2006 has been passed in favour of the registered person holding that the substantive provisions of law i.e. Section 36 was missing in the Show-Cause Notice dated 23-6-1992.
Hence the Show-Cause Notice was set aside. That during the proceedings before the Collector (Appeals) Faisalabad. Reliance was placed by the Sales Tax Department on the Supreme Court of Pakistan's Judgment in C.P. 702-L/2003, but the same was held to be irrelevant in the context of this case.
2. Brief facts of the case are that Deputy Collector, Custom house, Multan issued Show-Cause Notice C. No. IV-D(8)Cont/ST/103/92/6019, dated 23-4-1992 with the charge of contravention of the provision of sections 6, 7 and 22 of the Sales Tax Act, 1990 punishable under section 33 of the Sales Tax Act, 1990. It was observed that the registered person deducted input tax on the imported raw materials and the bills of entries were not in the name of registered person. On adjudication the case was decided against present respondent/registered person, vide Order-inOriginal No. 61 of 1996. Taxpayer preferred an appeal before the Collector (Appeal). After hearing the appeal, Collector (Appeal) vide Order-in-Appeal No. 549 of 1997, remanded the case by observing that examination of the .Records of the case reveals that "the instructions issued by the Central Board of Revenue, Islamabad have not been taken care of while deciding the matter of adjustment of sales tax; the counsel of the appellant in particular, made a reference to C.B.R's. Letter C. No. 1(5)GST-I/91, Pt. Vol. II, dated 29-9-1992, 1(15)GST-1/90, dated 17-12-1990; in view of this situation, it would be quite appropriate to remand the case back to the original authority for deciding the case afresh after taking all the relevant instructions and law on the subject". Thereafter, the Deputy Collector, Sales Tax and Federal Excise, Sargodha decided the case vide Order-in-Original Not 10 of 2006. Against this order the registered person respondent (respondent in present appeal) preferred appeal which was accepted.
3. Departmental representative argued the same arguments as were taken in memo, of appeal:--
(a) The Order-in-Appeal No.168 of 2006 has been passed in favour of the registered person on the ground that substantive provisions of law i.e. Section 36 was missing in the Show-Cause Notice dated 23-6-1992. Hence the Show-Cause Notice was set aside.
(b) That during the proceedings before the Collector (Appeals) Faisalabad, reliance was placed by the Sales Tax Department on the Supreme Court of Pakistan's judgment in C.P. 702-L/2003, but the same was held to be irrelevant in the context of this case.
(c) That the facts of the case are that respondent No. 2 claimed input tax adjustment amounting to Rs.476,957 against a B/E, which was neither in his name nor any sales tax was found paid by the respondent as required under section 7 of the Sales Tax Act, 1990, therefore, the respondent No. 2 contravened the provisions of sections 6, 7 and 22 of the Sales Tax Act, 1990.
4. On the other hand, authorized representative on behalf of respondent No. 2, contended as under:---
(i) That the memo. Of appeal has not been signed by the appellant.
(ii) That the provisions of S.R.O. 897(1)/2006, dated 1-9-2006 have not been complied.
(i.e) that the Show-Cause Notice does neither refer to section 36 of the Sales Tax Act, 1990 nor it makes any demand for sales tax.
(iv) That in C.P. 702-L of 2003 it was held that substantial compliance of the relevant rules had been made. In Order-inAppeal No. 168 of 2006 it has been held that substantive compliance is necessary and substantive compliance has not been made.
(v) That in the grounds of appeal there is no reference to any material on the basis of which it can be inferred that substantial compliance has been made. That there is no ground in the memo. Of appeal to the effect that there was substantial compliance of the provisions of the law.
(vi) That in the Order-in-Original No. 10/2006, it has been observed that "the Show-Cause Notice was issued vide .................. And the unit was charged with contravention of sections 6, 7 and 22 of the Sales Tax Act, 1990 as to why the illegal adjustment of input tax amounting to Rs. 476,957 be not recovered."
This amounts to misreading of the contents of the Show-Cause Notice. The word "as to why the illegal adjustment of input tax amounting to Rs. 476,957 recovered" do not appear in the Show- Cause Notice.
(vii) That specific clause of section 33 of the Sales Tax Act, 1990 was either mentioned in the Show- Cause Notice nor in the orderin-original.
(viii)That the case of respondent is covered by C.B.R.'s letter C .No. 1(15)GST-1/90, dated 17-12-1990 and C.No.1(5)GST-I/ 91 Pt. Vol. II dated 29-9-1992.
(ix) That the order-in-original was passed against the directions given in Sales Tax Order-in- Appeal No. 549 of 1997.
5. I have heard both the parties. Perusal of the record shows that the Show-Cause Notice was issues without mentioning the section in which the adjudicating authority could proceed against the respondent No. 2. That the Show-Cause Notice even did not any demand for sale tax. It is also noticed that in the Order No. 10 of 2006, it has been observed that "the Show-Cause Notice was issue vide and the unit was charged with contravention of sections 6, 7 and 22 of the Sales Tax Act, 1990 as to why the illegal adjustment of input tax amounting to Rs.476,957 be not recovered." This amounts to misreading of the contents of the Show-Cause Notice. The word "as to why the illegal, adjustment of input tax amounting to Rs. 476,957 does not appear in the Show-Cause Notice. On facts, input tax claimed by the respondent No.2, was covered by C.B.R's Letter C. No. 1(15)GST-1/90, dated 17-12-1990 and C.No. 1(5)GST-1/91 Pt. Vol. II, dated 29-9-1992 on this issue the case was remanded back to the original authority with the direction for deciding the case afresh after considering the above-referred letters but the adjudicating authority did not take into consideration the above letters.
6. I have seen the bills of entries which are in conformity with the procedure prescribed by the C.B.R.
Letters and these bills of entries were verified by the Assistant Collector Customs, Central Excise and Sales Tax Sargodha, in terms of above referred C.B.R. Letters, it is clear from the record that the respondent No. 2 claimed the input tax in accordance with law. Hence, there is no substance in the departmental appeal which is hereby dismissed. .