MUHAMMAD NAWAZ BAJWAH (JUDICIAL MEMBER).--- The titled cross sales tax appeals have been preferred by Revenue and the taxpayer, calling in question the impugned Order-in-Appeal No.189 of 2010, dated 3-9-2012, passed by the learned CIR (A), Faisalabad. The taxpayer also preferred a miscellaneous application for seeking permission to argue/raise additional grounds of appeal.
2. Before we proceed further, it merits to first take up the miscellaneous application for additional grounds filed by the taxpayer wherein it was requested on behalf of taxpayer that the legal objection with regard to appointment of Additional Commissioner Inland Revenue under section 30 of the Sales Tax Act, 1990, could not be taken in the grounds of appeal due to mistake and error which may be allowed to be argued at this stage. After due consideration, we are of the firm opinion that any legal point can be raised at any stage of adjudication of the case and the appellant has all right to raise any new or additional legal point for the first time before the Tribunal even though not set forth in memorandum of appeal filed before this Tribunal or even if it had not been raised before the original stage of adjudication or at the time of first appeal before the Commissioner (Appeals). We, therefore, allow the taxpayer to argue the additional ground along with other grounds of appeal already filed for adjudication.
3. Briefly stated, the relevant facts are that the department conducted. An investigative audit of appellant's record for the periods July, 2007 to June, 2008 whereby certain discrepancies were pointed out and a show-cause notice dated 17-8-2009 was issued to taxpayer asking him as to why input tax of Rs.5,498,415 illegally adjusted may not be recovered under section 36(1) of the Act along with default surcharge under section 34 ibid. The taxpayer was also charged with the violation of sections 3, 6, 7, 8, 8A, 22, 23, 26 and 73 read with sections 2(14) and 2(37) of the Act and are also called upon as to why penal action may not be taken against him under section 33 ibid. The submissions made out by the taxpayer at adjudication stage was not found satisfactory and an adverse Order-in-Original No. 03/3,5/2010 dated 10-5-2010, was passed by the Additional Commissioner Inland Revenue (RTO), Faisalabad. Being aggrieved, the taxpayer filed appeal before the learned CIR(A) who mainly accepted the appeal and partly ordered for its dismissal adjudging a liability of Rs.392,249 on account of "recovery of input tax due to non-compliance of section 73 of the Act and output tax on sales of empty bags" vide Order-in-Appeal No. 189 of 2010 dated 3-9-2010. Now the Revenue department and the taxpayer have come up into the second crossed appeals filed before this Tribunal respectively against sales tax liability vacated by the Commissioner (Appeals) vis-a-vis demand upheld by the CIR(A), Faisalabad.
4. The learned AR for the taxpayer has vehemently contended that the impugned adjudication order passed by the learned Additional Commissioner Inland Revenue is illegal and without jurisdiction because he was never appointed as an Inland Revenue Officer through a notification published in the official gazette as required under section 30 of the Act and was a non-existent authority at that material time. It was also contended on behalf of the taxpayer that the impugned adjudication order is hit by time limitation under section 36 of the Act. On the contrary, the learned DR on behalf of the revenue-department has opposed the contention of the learned counsel for the taxpayer and supported the impugned order passed by the learned Additional Commissioner.
5. We have considered the above arguments put forth by the learned representatives of both the sides and after consideration, we find that a new Service Group namely "Inland Revenue Service" was created through Finance Amendment Ordinance i.e.f. 28-10-2009 and as a result, the jurisdictions exercisable under Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005 were consolidated. By creation of a new cadre, a number of provisions including provisions of section 11 and section 36 were also amended and the provisions of section 45 of the Act for powers of adjudication were also omitted through Finance Amendment Ordinance, 2009 applicable i.e.f 28-10-2009 and an "Assistant Collector or a Deputy Collector or Additional Collector" were remained no more empowered to adjudicate upon cases falling under sections 11 and 36 of the Act. In the Sales Tax Act, 1990, amendments were made in sections 11(5) and 36(3) of the Sales Tax Act, 1990 whereby the word "Collector" was substituted by the word "Commissioner" and the words "Sales tax Department or sales tax as the case may be" were substituted by the words "Inland Revenue. "For ease of reference, the relevant provisions of section 30 of the Act are reproduced hereunder:- "30. Appointment of Authorities.---(1). For the purposes of this Act, the board may, by notification in the official Gazette, appoint in relation to any area, any case or class of cases specified in the notification, any person to be--
(a) a Chief Commissioner Inland Revenue.
(b) a Commissioner Inland Revenue.
(c) an Additional Commissioner Inland Revenue.
(d) a Deputy Commissioner Inland Revenue.
(e) an Assistant Commissioner Inland Revenue. (f)' an Inland Revenue Officer.
6. The above quoted provisions of law reveal that there are, two mandatory conditions for appointment of any officer as enlisted above, the first is that, a notification or statutory regulatory order for appointment and jurisdiction of Officers of Inland Revenue specifying a case or area was required to be issued by Federal Board of Revenue is a necessary condition and the second is that, the publication of this notification or statutory regulatory order in the Official Gazette of Pakistan was a sufficient condition. If either of the two conditions is missing, the act of any authority appointed in whatsoever manner shall be an act done by any of the ordinary citizen of the state.
Prior to inception of the new tax service group namely 'Inland Revenue Service' a Notification No. S R.O. 547(1)/2008 dated 11-6-2008 was duly issued and published in the official gazette for appointing sales tax authorities and assigning them jurisdiction, however, thereafter no such notification or statutory regulatory order on its pattern was neither issued nor obviously published in the official gazette for appointment of Inland Revenue Authorities to their jurisdictions which was mandatory for any proceedings carried out by an officer of Inland revenue under section 30 of the Act. Therefore, impugned order-in-original passed by an "Additional Commissioner Inland Revenue, Faisalabad" who was not duly appointed as "an officer of inland revenue" and was never assigned with jurisdiction to the case of taxpayer through a notification published in the official gazette under section 30 of the Sales Tax Act, 1990 hence, adjudication order passed by him is without lawful authority and of no legal effect.
Reliance is placed on the judgment of a Division Bench of this Tribunal in case of "Messrs Kamal Spinning Mills v. The CIR (R.T.O.), Faisalabad" vide S.T.A No. 201/LB/2010 dated 19-12-2011.
7. In continuation of his submissions, the learned counsel for the taxpayer further urged that the adjudication order is also time-barred under the second proviso to subsection (3) of section 36 of the Act because the show-cause notice in this case was issued on 17-8-2009 and consequent order-in-original was passed on 10-5-2010 after about 265 days instead it should have been passed within original time limit of one hundred and twenty (120) days from issuance of show- cause notice or/and within such extended period as the Commissioner 'for reasons' to be recorded in writing provided that the extension period in no case shall exceed 60 days. In this case, original time-limit of 120 days for adjudication was completed on 14-12-2009 and extended period of further 60 days was also expired on 12-2-2010 hence, impugned adjudication was time-barred by 85 days under subsection (3) of section 36 of the Sales Tax Act, 1990. The learned DR argued that upon expiry of original time limit as well as extended time limit, the Federal Board of Revenue under section 74 of the Act has further extended the time limit for decision vide its letter C.No. 4(12)/S(Legal-ID)/2010 dated 3-1-2010 therefore, the order was passed within time limit. Now the question arises that whether the F. B. R was empowered to extend time-limit beyond 60 days or not? Before we *further discuss the arguments addressed at the bar, it is important to reproduce the relevant provisions of section 36(3) of the Act which reads as under:-- "Proviso to subsection (3) of section 36: Provided that order under this section shall be made within one hundred and twenty days of issuance of show-cause notice or within such extended period as the Collector may, for reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed sixty days."
(Emphasis ours)
8. By bare reading of above provisions of law, it reveals that the phrase "such extended period shall in no case exceed sixty days" conveys the intention of the legislature that the extension in any case could not be given more than 60 days. The term "shall" used in the proviso to subsection (3) of section 36 of the Act makes the compliance of provision of law mandatory and there is no escape from it. When a period is provided by a special Statute, then any proceedings or actions taken under the provisions of special Statute has to be taken within such stipulated time otherwise, any action or proceeding taken beyond that very period shall render the whole exercise illegal and without jurisdiction. No doubt the F.B.R can extend time limit generally in any case under section 74 of the Act but the extended time limitation already specified under special provisions consciously enacted by the legislation in section 36 of the Act could not be further extended under section 74 ibid trough a notification/executive order by changing the act of parliament. Exercise of delegated authority by the F.B.R. Through subordinate legislation, such as through a notification or statutory regulatary order or any other order was permissible only so long as it did not conflict with the parent statute. It is a basic and fundamental principle of interpretation of statutes that where a situation is specifically dealt with by a provision of law then any general provision relating to the same subject would not be attracted in cases specifically catered for. In our opinion, the F.B.R was not legally empowered to extend the time limit beyond 180 days in any case nor the adjudicating authority was legally competent to adjudicate the instant case after expiry of original period of 120 days and extended period of 60 days and in no case beyond 180 days altogether. Reference may be made to the judgment of High Court, Lahore in case of "Messrs Tanveer Weaving Mills v. Deputy Collector Sales Tax and 4 others" reported as (2009 PTD 762). The ratio settled by the honourable Court is as under:-- "As is clear from the language of the above proviso, it has limited the scope of exercising of the jurisdiction after issuance of notice to basically 90 days or such extended period as the Collector after duly recording proper reasons in writing has fixed. However, it is again subject to the limitation in the manner that the said extension also cannot be for more than 90 days. The period for deciding the order-in-original after issuance of a notice under sections 36(1) and 36(3) thus is maximum 180 days including earlier 90 and extended 90 days. Obviously if the extension has been given by the Collector before the expiry of the earlier 90 days."
9. In view of above discussion and in the light of law, the miscellaneous application as well as appeal filed by the taxpayer are allowed whereas appeal filed at the behest of revenue- department being devoid of merits stands rejected on the strength of vital legal issues .Raised hereinabove. .