This appeal has been filed by the registered person against the order of Collector (Appeals), Faisalabad, dated 24-10-2008, whereby the learned Collector(Appeals) upheld the order-in- original dated 17-4-2008 passed by the Assistant Collector (Refund) Sales Tax and Central Excise, Faisalabad.
2. Facts leading to the instant appeal are that the appellant filed claim of refund for the amount of Rs.35,83,056 against zero rated supplies for the month of May, 2007. Scrutiny of the claim revealed various discrepancies which were confronted to the appellant by the learned Adjudicating Officer (Assistant Collector) vide show-cause notice bearing C.No.27258 dated Nil whereby the appellant was asked to explain as to why its claim of refund ma) not he rejected under section 11(2) of the Sales Tax Act, 1990 read with Rule 37 of the Sales Tax Rules, 2006 notified vide S.R.O. No.555(I)/2006 date;! 5 6-2006. Penalty under section 33 of the Sales Tax Act, 1990 was aiso proposed to be levied.
Reply submitted by the appellant was partly accepted by the learned adjudicating officer who vide his order dated 17-4-2008 rejected the claim of refund to the extent of Rs.13,79,046. Being aggrieved, the appellant filed appeal before the learned Collector(Appeals) who vide his impugned order FURTHER reduced the amount of inadmissible refund to Rs.913,058. Being still dissatisfied the appellant has come up in further appeal before us.
3. The learned AR, at the very outset, raised legal objection to the order-in-original and contended that the learned Assistant Collector who A passed the order-in-original did not have the jurisdiction to adjudicate cases involving refund of more than one million rupees. In this context, the learned AR took us through the provisions of section 45 of the Sales Tax Act, 1990 which for the sake of convenience are reproduced hereunder:-- "45. (Power of Adjudication)---(1). In cases involving assessment of tax, charging of default surcharge, imposition of penalty and recovery of amount erroneously refunded or any other contravention under this Act or the rules made thereunder, the jurisdiction and powers of adjudication of the Sales Tax Officers shall be as follows:-.
(i) Additional Collector Cases falling under subsection (2) of section 11 and section 36 without any restriction as to the amount of tax involved or amount erroneously refunded.
(ii) Deputy Collector (a) Cases falling under subsection (1) Of section 11
(b) Cases falling under subsection (2) of section 11 and section 36 provided that the amount of tax involved or the.- amount erroneously refunded exceeds one million rupees, but does not exceed two and a half million rupees.
(i.e) Assistant Collector Cases falling under subsection (2) of section 11 and section 36 provided that the amount of tax involved or the amount erroneously refunded exceeds ten thousand rupees, but does not exceed one million rupees To further lend support to his case the learned AR also referred to the judgment of this Tribunal passed in S.T.A. No.1210/LB of 2009 in the appellant's on case whereby this Tribunal under similar circumstances vacated the order of the learned Collector (Appeals) with the following observations:-- "A bare perusal of above provisions of law reveal that each authority working under the hierarchy of the Sales Tax Department has been given power to perform his duty and to exercise jurisdiction within the parameters as specifically provided under the law. Any transgression to the above limit would render the entire exercise of authority illegal and void ab initio. It is crystal clear that the Assistant Collector has transgressed his jurisdiction and powers of adjudication order beyond pecuniary limit of one million rupees as admittedly in the case at hand, amount of refund 'involved is Rs.2,334,953. Under section 45(1)(ii), it was only the Deputy Collector who had the power to issue notice to show cause and to pass adjudication order. It is a well settled principle of law that the power vested in any authority can only be exercised by the same authority, in default whereof, the entire action would be without jurisdiction, void ab initio and of no legal effect."
2001 SCMR 1822). The relevant portion of the said judgment is reproduced below:-- "whenever orders are passed by an officer without caring whether jurisdiction vests in him or not, it prima facie reflects on his conduct as well as competency. It is also to be noted that whenever authority is exercised in such a manner then no other inference can be drawn except that the functionary has transgressed his jurisdiction for the consideration other than judicial one and the courts seized with such order may recommend action against the said officer because neither the executive authorities nor judicial forums will pass wrong order because the jurisdiction in both the capacities is conferred upon such authorities to discharge their functions in accordance with law which has bestowed authority upon them to function in the capacity and if there is abuse of power by such officer then no hesitation should be felt in passing stringent structure against officer keeping in view norms of justice"
An identical question also came up for consideration before the Supreme Court of Pakistan in case of Izhar Alam Farooqi v. Sheikh Abdul Sattar reported as (2008 SCMR 240) wherein the Hon'ble Court held as under:-- "If a mandatory condition for the exercise of a jurisdiction before Court, Tribunal or Authority is not fulfilled, then the entire proceedings which follow become illegal and suffer from want of jurisdiction. Any order passed in continuation of these proceedings in appeal or revision equally suffers from illegality and is without jurisdiction."
The learned AR further referred to the judgment of this Tribunal reported as 2011 PTD (Trib.) 923 and 2011 PTD (Trib.) 467, wherein under similar circumstances exercise of authority by the officers of the Sales Tax in the cases involving revenue exceeding the pecuniary limit laid down in section 45 of the Sales Tax Act, 1990 supra was held to be illegal.
4. The learned DR on the other hand supported the orders of authorities below.
5. We have given due consideration to the rival arguments and also gone through the relevant record available on file. We are of the 'considered opinion that the orders of the authorities below are not sustainable because of the simple reason that the order in original having been passed in violation of the provisions of section 45 of the Sales tax Act, 1990 was without lawful authority as held by the Supreme Court of Pakistan in the judgments quoted supra. Since the order of the Assistant Collector suffers from glaring jurisdictional transgression, the same is held to be void ab nitio. Resultantly we have no option except to vacate the orders passed by the authorities below stand vacated.
6. The appeal filed by the registered person succeeds. .