Vide this Sales Tax Appeal, the Appellant/Registered Person has assailed the order passed by the learned Collector (Appeals) Customs, Sales Tax and Federal Excise, Multan Order-in-Appeals Nos.369 to 375 of 2008 dated 8-4-2008.
2. Both the learned representatives appearing at the bar have been heard and record perused.
3. Facts leading for disposal of the instant case are that the appellant/registered person vide Sales Tax Registration No.0407640500646 applied for refund amounting to Rs.29,05,768 for the period 09 of 2005. In this regard, the Assistant Collector issued show-cause notice under sections 10(4) and 11(2) of the Sales Act, 1990 bearing C.No,T040905100017/571/3859 dated 14-3-2007 to the appellant/registered person alleging therein many discrepancies/ irregularities and mentioned therein as to why input tax/refund amounting to Rs.29,05,765 may not be rejected and as to why penal action may not be taken under section 33(1)(11)(c) of the Sales Tax Act, 1990. Further intimated that hearing of the titled case is fixed for 28-3-2007 at 11 a.m. Before the Deputy Collector Sales Tax (Deferred Refund), Multan. On the due date, the Deputy Collector heard the divergent views expressed by the opponents parties, as the appellant could not substantiate his version with any documentary evidence before this forum, he held that the claim of refund is inadmissible in terms of sections 10(4) and 11(2) of the Sales tax Act, 1990 read with refund rules. Against this treatment, the appellant filed appeal before the learned Collector (Appeals), Multan, who by virtue of his order dated 8-4-2008 rejected the appeal of the appellant. This has forced the appellant to file appeal before the learned Appellate Tribunal Inland Revenue.
4. On his turn, the learned counsel for the appellant vociferously contended that the appellant/registered claimed refund for the period 09 of 2005 as per the provisions, of Rules 4 of the Sales Tax Refund Rules along with the supportive documents required under Rule 9 of the Sales Tax Refund Rules, 2002. Further contended that the appellant has been a bona fide purchaser of the goods from his suppliers and he has been making payment against purchases made from the suppliers exactly in accordance with the provisions of section 73 and paid sales tax on the purchases to his supplies exactly in accordance with the provisions of section 3 and claimed input tax as contemplated in section 7 of the Sales Tax Act, 1990. Also agitated that the appellant subsequently consumed goods purchased from his suppliers in his exports, as the export being zero rated, the respondent has entitlement of the claim of refund up to the extent of input tax against the purchased goods, which were subsequently exported. Further contested that the appellant was alleged that the supplier of the appellant was showing exceed declared out put and was declared black listed, while during the court proceedings before the authorities below the appellant provided all the documents as required under standing Order No.4 of 2006 dated 20-12- 2006 and did not violate any provision of the act and the payments were also made in accordance with the provision of section 73. Further agitated that no discrepancy whatsoever for the purposes of claims of the refund is concerned, has ever been informed by the department to the appellant, on the contrary the record of the appellant has been completed as per the provisions of Sales Tax Laws and Rules framed there under and if there is any procedural lapse on the part of the supplier of the appellant, the appellant certainly could not be penalized for that acts/lapses of his suppliers as per the famous maxim "Actus Curiea neminem gravabit". Also vehemently contended that if the department point of view is that the refund is not genuine then they should issue, show cause notice in writing within 14 days but in the instant case show-cause notice has been issued after the lapse of about 3 years. According to the provision of Sub-Rule (1) of 8 of Refund Rule, 2002 the time limit for issuance of show cause notice is 14 days only and any show cause notice issued in reply is hopelessly time barred and no recovery of rejection of refund can be enforced on the basis thereof.
He further contended that the appellant claimed refund as per the provision of section 7 read with sections 73 and 8(1) of the Sales Tax Act, 1990 can not be held inadmissible and as such is refundable. In support of his contentions, the learned counsel for the appellant also submitted a few latest judgment rendered by, this Hon'ble Appellate Tribunal Inland Revenue on the similar issues cited as S.T.A. No.1530/LB/2009 dated 11-6-2010, S.T.A. No.704/LB/2009 dated 30-6-2010 and S.t.A. No.239/LB/2009 dated 5-8-2010. On the other hand, the learned D.R. Appearing on behalf of the revenue neglected the contentions of the appellant and supported the orders of the authorities below with the findings recorded therein.
5. We have heard the divergent views expressed by the rival parties and perused the available record as well as the case-law submitted by the learned counsel for the appellant betore us.
Further we have looked into the matter carefully and found that main thrust of the appellant is that the show-cause notice dated 14-3-2007 issued by the Assistant Collector Sales Tax, is ab initio void and illegal as that was issued after the stipulated period provided in the statute. Further observed that the sales tax return was furnished by the appellant within time and claimed the input tax under the law and to that extent, the show-cause notice should A be issued within 14 days whereas that was issued approximately after the lapse of three years which is patently barred by time. It is pertinent to mention here that issuance of such a belated notice by the department was coram non-judice which does not have any legal sanctity in the eye of law and certainly loses its existence.
6. We have also gone through the Sales Tax Refund Rules, 2002 which were submitted by the learned counsel for the appellant to strengthen his contention. According to subsection (1) of section 8 of. The Sales Tax Refund Rules, 2002 "in case any refund claim or part thereof is found not genuine and not admissible under the law, a notice shall be served on the claimant requiring him to show cause in writing, within fourteen days, as to why the claim or as the case may be, part thereof should not be rejected and as to why the claimant should not be proceeded against under the relevant provisions of law". Consequently, in the presence of the settled principle of law which states that if the law requires to do certain things as per the statute book that should be followed in its letter and spirits because that has been prepared for awareness of the court proceedings for the rival parties. On B the contrary an act of the officer which is contradictory or has been done out of the way to cross the rules and regulation that does not have any legal support and it also means that it would have been biased its illegal power which definitely have no legal effect. Keeping in view of the aforementioned discussion, it is significant to state here that if the show cause notice is void, ab initio, kind time barred then all the then proceedings initiated by the authorities below against the appellant/registered person are futile exercise and do not have any legal consequences in the eye of law Consequently, we have no ambiguity in our mind to state here that the contentions raised by the learned counsel C. For the appellant certainly cartles much weight.
Accordingly, we are constrained to agree with the contentions of the learned counsel and accept the appeal of the appellant/registered person. This would result into vacation of the orders of the authorities below, and in continuation we further direct to the Deputy Collector(Refund) to sanction refund of the appellant in accordance with law.
7. Ordered accordingly. .