' This Miscellaneous Application for rectification is filed by the applicant Army Welfare Trust- Nizampur Cement Plant the cement division of Army Welfare Trust, Rawalpindi and engaged in the manufacture and sales of Ordinary Portland Cement. The manufacturing facilities are located at Kahi, Nizampur near Nowshera. Sales Tax Appeal No, 47/IB/2006 filed by the appellant was decided by the erstwhile Customs, Excise and Sales Tax Appellate Tribunal vide judgment dated 8-7-2008 released on 16-10-2008 which has arisen from Order-in-Original No, 163 of 2005 dated 24-6-2005.
The applicant has filed a Miscellaneous Application dated 4-11-2008 in the CESTAT which remained pending till July 1, 2010 when the jurisdiction of sales tax and federal excise cases were transferred to Appellate Tribunal Inland Revenue, Islamabad through Finance Act, 2010 (XVI of 2010). The case record, later on, transferred to this Appellate Tribunal.
' This Miscellaneous Application is directed against the Order of CESTAT wherein the appellant has submitted that while deliberating the decision in S.T.A. No, 47/IB of 2006 various flagrant mistakes, barefaced omissions and patent errors on the points of facts were committed by the learned Bench hearing the case and sought correction of these facts.
2. This M.A. (Rectification) has been filed on the following grounds:- "(i) That the learned Bench of the CESTAT has not adjudged the grounds of limitation (as referred in the Order, para 6) wherein the appellant has placed reliance on the two illuminating judgments of the Hon'ble Lahore High Court, Lahore in the Writ Petition No, 13331 of 2006 (in the case of Super Asia Muhammad Din Sons (Pvt.) Limited v. Collector of Sales Tax, reported at (2008 PTD 60) and STR No, 68 of 2006 (in the case of Hanif Straw Board Factory v. Additional Collector of Sales Tax, reported at (2008 PTD 578). The issue of limitation was the core issue during the course of pleading and, if your honour recall, the honourable Chairman has passed positive comments about the issue being time barred. As a matter fact the issue of limitation goes into the roots of the case, therefore, authoritative point of view of the Bench is necessary for the determination of correct question of facts.
(ii) That the learned Bench of the CESTAT has patently omitted the fact that the claim of exemption of the appellant was under third proviso of the Notification No, S.R.O. 561(1)/94 dated 9-4-1994. In the appeal memorandum as well as during the course of hearings the reference was made, claimed, argued and reiterated with reference to third proviso of the above referred Notification S.R.O. Learned Bencher have decided the matter in appeal which was neither pleaded nor argued, thus, the underlying subject matter in appeal had escaped from their sight. Therefore, the CESTAT has grossly erred in reaching correct conclusion;
(iii) That the Respected Bench of CESTAT has not considered the grounds pressed before the bench during the course of hearing as well as submissions in the Memorandum of Appeal at pages 19 to 21 at para XXVI to XXXIII. The Honorable Bench has also nor considered without prejudice argument of the appellant and the working of the appellant submitted where the value of inventory and related taxable input tax has been worked out. According this working, the input tax has been correctly claimed by the appellants. The Appellate Tribunal should have deliberated on this point.
Since this matter has also escaped from the focus of the learned bench, therefore, it is an error floating on the surface of record.
(iv) That the Esteemed Bench of the Appellate Tribunal has lost the sight from the submissions at paras 21 to 25, para XXXIV to XLVIII. It was specifically mentioned in the memorandum of appeal that disallowed input tax was utilized in the taxable activity and was part of taxable inventory comprising of cement, clinker and raw meal (manufactured wholly or partially) with the use of electricity which is happened to be the major component of production. This disallowance amounted to double taxation.
(v) That the decision of appellate tribunal is containing various errors and omissions which are floating on the surface of the record needs the redressal in the name of natural justice and fair- play."
' The appellant has prayed that order of CESTAT in S.T.A. No,47/IB of 2006 may be recalled and appropriate Order may be passed after rectification as deeded appropriate.
3.. Mr. Tahir Razzaque Khan, FCA learned Authorized Representative of the appellant has started the arguments and has drawn our attention on para 6 pages 9-10 of the Order in S.T.A. No, 47/IB/2006 of the CESTAT which read as follows:-- "The learned consultant during the course of hearing before us, contended that impugned order- in-original has been passed more than 2-1/2 years after the issuance of show-cause notice and is barred by limitation of time as contained under section 36 of the Sales Tax Act, 1990. The learned counsel contended that the Hon'ble Lahore High Court Lahore in Writ Petition No, 13331 of 2006 and S.T.R. No, 68 of 2006 has held that provisions regarding limitation in the Sales Tax Act, 1990 are mandatory and orders passed beyond the limitation period have no legal effect. The learned consultant prayed that order in original may be set-aside and appeal may be accepted."
' Learned AR of the appellant has clarified that the case has been decided in 1 year and 1 months and 25 days and not in 2-1/2 years as mentioned on the above para, as against, the period of adjudication allowed in the statute which is 90 days or 180 days if the reasons are recorded in the order for allowing such extension by the Collector. In the case of applicant the show-cause notice was issued on 4-6-2003 and Collector (Adjudication), Collectorate of Customs, Sales Tax and Central Excise, Peshawar, had passed an ex parte Order on 23-12-2003 which was recalled by Federal Board of Revenue under 45A in pursuance of directions of FTO on 29-4-2004. The jurisdiction of the case was assigned to Collector (Adjudication), Collectorate of Customs, Sales Tax and Central Excise, Lahore. After recall of order by the Board, the limitation has to start from the date of Order of Board as if fresh show-cause notice has been issued. The Collector (Adjudication), Collectorate of Customs, Sales Tax and Central Excise, Lahore has finally disposed of the case vide its Order-in-Original No, 163 of 2005 on 24-6-2005 which was the impugned Order under appeal before CESTAT in S.T.A. No, 47/IB of 2006. The Collector (Adjudication) has decided the case in 13 months and 25 days after assumption of jurisdiction which should have disposed of in 90 days. He contended that the matter is patently time barred in terms of proviso to subsection (3) of section 36 of the Sales Tax Act, 1990.
4. Learned AR of the applicant has pointed out that the parallel citations mentioned in the Order of CESTAT are reported judgments. He mentioned that Writ Petition No, 13331 of 2006 is the judgment reported as 2008 PTD 60 (H.C. Lah.) in the case titled Super Asia Muhammad Din Sons (Private)
Limited v. Collector of Sales Tax and S.T.R. No,68 of 2006 is the judgment reported as 2008 PTD 578 (H.C. Lah) in the case titled Hanif Straw Board Factory v. Additional Collector (Adjudication), Customs, Excise and Sales Tax. He further submitted that similar ruling have been given by the judicial forums in number of other case like Abbasi Enterprises v. Collector of Sales Tax reported as 2008 PTD 2025, Pace International v. Secretary Revenue Division reported as 2006 PTD 340 which was upheld by the President of Pakistan in case titled CBR/Sales Tax Department v. Pace International reported as PTCL 2005 CL. 841 (President of Pakistan); Syed Bhai Lighting Limited v.
Collector ST & FE reported as 2009 PTD (Trib.) 1263; Leo Enterprises v. President of Pakistan reported as 2009 PTD 1978; Tanveer Weaving Mills v. Deputy Collector Sales Tax reported as 2009 PTD 762 and Meraj Din v. Collector Customs, Excise and Sales Tax reported as 2009 PTD 2004.
5. He also referred to letter C.No, 5(4)CEJ/2000 dated 23-12-2000 issued by the Central Board of Revenue (now Federal Board of Revenue) where the Board viewed it as mandatory provision of law.
The relevant extracts of the above referred letter issued Board is reproduced as under which is issued by Secretary (CEJ), being addressed to Collector of Customs, Sales Tax and Central Excise, Adjudication, Karachi, Lahore, Multan, Rawalpindi and Quetta:- "SUBJECT: EXTENSION OF TIME LIMIT IN FINALIZATION OF ADJUDICATION CASES IN TERMS OF SECTION 22 OF THE CENTRAL EXCISES ACT AND SECTION 45 OF THE SALES TAX ACT, 1990.
' I am directed to refer to Board's letter of even number dated 15-11-2000 on the subject noted above.
2. It has been observed with concern in the Board that at present a huge number of cases as reported by the Collectorates (of adjudication) are pending adjudication. Collectors (Adjudication) are aware that provisions relating to adjudication of cases in the Customs, Sales Tax and Central Excise Law which binds the adjudicating authorities to decide the cases within 45 days of the issuance of show-cause notice or within such extended period, for which reasons shall be recorded in writing, and that such extended period shall in no case exceed 90 days in all. Member (Central Excise) while expressing concern over the huge back log, has directed that all our efforts be made to ensure due compliance of the aforesaid mandatory provisions of the law and decide the pending cases within the prescribed time limit of 45 days to avoid any legal complications."
6. The learned AR of the Applicant submitted that although the learned Bench has recorded the arguments raised at bar during the course of hearing but no deliberation was made by the Members of the Bench. He submitted that proviso to subsection (3) of section 36 of the Sales Tax Act prescribe a period of limitation for ninety days of the issuance of show-cause notice or within such extended period as the Collector or Collector (Adjudication) may fix but not exceeding another ninety days. The Collector (Adjudication) in the present case has not recorded any such findings so the limitation applicable in the case of appellant was ninety days from the date of show-cause notice. The learned AR submitted that the extract of the section 36 which mainly hold the field from the date of issuance of show-cause notice till final adjudication reads as follows:-- "36. Recovery of tax not levied or short-levied or erroneously refunded.---(1) Where by reason of some collusion or a deliberate act any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to pay any amount of tax or charge or the amount of refund erroneously made shall be served with a notice, within five years of the relevant date, requiring him to shot cause for payment of the amount specified in the notice.
(2) Where, by reason of any inadvertence, error or misconstruction, any tax or charge has not been levied or made or has been short-levied or has been erroneously refunded, the person liable to pay the amount of tax or charge or the amount of refund erroneously made shall be served with a notice within three years of the relevant date, requiring him to show cause for payment of the amount specified in the notice: ' Provided that, where a tax or charge has not been levied under this subsection, the amount of tax shall be recovered as tax fraction of the value of supply.
(3) The officer of Sales Tax empowered in this behalf shall, after considering the objections of the person served with a notice to show cause under subsection (1) or subsection (2), determine the amount of tax or charge payable by him and such person shall pay the amount so determined: Provided that order under this section shall be made within ninety days of issuance of show-cause notice or within such extended period as the Collector or, as the case may be, Collector (Adjudication) may, for reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed ninety days: "Provided further that where a registered person is served with audit observation, the period of,---
(i) five years prescribed in subsection (1); and
(ii) three years prescribed in subsection (2), for the issuance of show-cause notice shall be treated as extended from the date of serving of audit observation(s) to the date of issuance of show-cause notice.
(4) For the purpose of this section, the expression "relevant date" means --
(a) the time of payment of tax or charge as provided under section 6; and
(b) in a case where tax or charge has been erroneously refunded, the date of its refund."
7. He has submitted copies of judgments where superior and higher courts and tax tribunals has recalled the orders where there is mistake apparent from record. He has relied upon the following judgments:
(i) Collector Sales Tax and Central Excise v. Mandial Paper Mills Limited reported at 2004 PTD 1714 (SC). In this case the Supreme Court recalled its order after hearing the counsel for parties by converting them into appeals but when detailed order was checked it was noticed by the Supreme Court that some of the petitioners were unrepresented. The Supreme Court, in the interest of justice, recalled its earlier order of allowing petitions by converting them into appeals and leave to appeal was granted;
(ii) Pakistan v. Fecto Belarus Tractors Limited reported at PLD 2002 SC 208. In this case Supreme Court held that "where Court had overlooked some material question of fact or of law which would have a bearing on the decision or there was some mistake or error apparent on the fact of the record, the power of review could be exercised";
(iii) CIT v. Paracha Textile Mills Limited reported at 2010 PTD 1016 (H.C. Kar.). In this case it has been held that 'Though the tribunal has no power to review its own order, however, it is fully empowered to rectify any mistake in its order provided the mistake is apparent and patent on the record. The mistake need not be arithmetic or clerical mistake but it could be substantive or a procedural mistake. The earlier mistake committed by the tribunal was causing prejudice to the respondent as in the earlier order passed by it, it has recorded a totally incorrect fact which was subsequently rectified and corrected by it Section 156 of the Income Tax Ordinance, 1979 fully authorizes the tribunal to rectify its make' apparent and patent from the record subject to the, condition that a notice of hearing in this regard should be provided to both the sides.
(iv) Miscellaneous Application No,, 19 of 1968-1969 (in re. S.T.As. Nos. 72 and 73 of 1964-1965 (Assessm ent years 1958-1959 and 1959-1960) decided on 14-4-1969 reported at [1969] 20 TAX (Trib.) 19, sales tax matter. The very material point which was essential for deciding the sales tax appeals was totally lost sight of and the two sales tax ,appeals were in fact decided on consideration altogether foreign to the real issue. Department moved miscellaneous application requesting the Tribunal to rectify the mistake and to recall the two sales tax appeals which were passed inadvertently on the grounds taken in the sales tax appeals. The ITAT has held that mistake is apparent from Tribunal's record. The Orders were recalled with directions that these may be heard afresh;
(v) Miscellaneous Applications Nos. 391/LB to 393/LB of 2003 decided on 13-11-2004 reported at 2004 PTD (Trib.) 805, wealth tax matter. Erroneous assumption of jurisdiction over the case was a mistake apparent from record. The ITAT has recalled and cancelled the orders;
(vi) Miscellaneous Applications Nos. 15/LB and 16/LB of 2004 decided on 21-8-2004 reported at 2005 PTD (Trib.) 2103, income tax matter. The Assessee filed miscellaneous applications for recall of Appellate Tribunal's order on the ground that appeal was decided without giving any weightage to the arguments and without considering the grounds of appeal put forth at the time of hearing. The ITAT held that it was necessary to examine the whole issue in the light of arguments/ submissions put forth by the assessee and as set forth in the memo. Of grounds of appeal for clear finding in the case and modification of the same in the light of facts and overall circumstances of the case. The ITAT has recalled the Order with the direction that the same should be examined so that the exact position may be adopted for disposal of the main appeal on factual position of law and ground realities in view of which miscellaneous application was filed by the assessee and allowed Miscellaneous Application.
(vii) Miscellaneous Application No, 634/LB of 2004 decided on 11-2-2004 reported at 2005 PTD (Trib.) 1135, income tax matter. Appeals of assessee were rejected by ITAT, assessee had filed applications for recall of rejection order on the plea that ITAT had materially erred to process estimation of sales and was not justified to reject his appeals on that ground. It was pleaded that it was necessary to examine relevant assessment record and all other material evidence for a clear finding regarding contentions of assessee/applicant as raised in main appeals for relevant assessm ent years. Rejection order passed by ITAT was recalled with the direction. Applications filed by assessee were accepted.
(viii) Miscellaneous Applications (Rectification) Nos. 307/KB and 308/KB of 2004 decided on 24-3- 2005 reported at 2006 PTD (Trib.) 62, income tax matter. In this case assessee contended that while adjudicating its appeal the arguments, reliances and the case-law had not been mentioned, discussed and adjudicated upon by the Tribunal which constitutes mistake apparent from record warranting recalling the earlier order and re-adjudicating the appeals. Mistake of non-mentioning of the order sheet entries in their true perspective and not instancing the arguments and the case- law were apparent on record. Such position had resulted into incomplete adjudication of grounds, arguments and reliance. Case-law relied upon by the assessee in respect of scope of rectification application was squarely applicable and when the grounds, arguments and reliances were not mentioned, discussed and adjudicated upon the order was rectifiable. Mistake of law had arisen in orders which was floating on the surface of the record and warranted remedial approach to issue under consideration. All the orders passed by the Appellate Tribunal were recalled to be heard afresh.
(ix) Miscellaneous Applications Nos. 579/LB to 581/LB of 2005 decided on 12-11-2005 reported at 2006 PTD (Trib.) 1050, income tax matter. The assessee raised the contention before the Appellate Tribunal that it was not justified due to the fact that notice of hearing was not served either on Authorized Representative or assessee/applicant company. The assessee has also filed an affidavit whereby it had stated that no notice of hearing in appeal was ever served upon any official of the applicant-company. Non-appearance on the date of hearing therefore, was not wilful. Order passed by ITAT under S.132(2) of the Income Tax Ordinance, 2001 for no fault of the assessee was unjustified as the issue raised in main appeals remained unsubstantiated for non prosecution. Order passed was recalled in the intetekt of justice and office was directed to list the main appeal filed by the assessee for regular hearing. Miscellaneous applications filed by the assessee were allowed by the Appellate Tribunal in circumstances.
(x) Miscellaneous Applications Nos. 902/LB and 903/LB of 2006 decided on 2-3-2007 reported at 2007 PTD (Trib.) 1917, income tax matter. Appeal filed by the Department had been dismissed in default for prosecution under S.132(2) of the Income Tax Ordinance, 2001 according to, which, it had been specifically provided that the Appellate Tribunal shall afford an opportunity of being heard to the parties to the appeal and in case of default by any of the party on the date of hearing, Appellate Tribunal, may, if it deemed fit, dismiss the appeal in default or may proceed ex parte to decide the appeal on the basis of available record. Appeal having not been disposed of proceeding ex parte on the basis of available record, the basic right of being heard an affording of opportunity of being heard could not be denied to any party. Order of Appellate Tribunal was recalled.
(xi) Miscellaneous Application No, 1115/LB decided on 1-9-2007 reported at 2008 PTD (Trib.) 1253, income tax matter. Income Tax Ordinance, 2001 was enacted through Finance Act, 2001, which came into force with effect from 1-7-2003. Order was passed on 28-6-2003 before enforcement of Income Tax Ordinance, 2001. Assumption of jurisdiction through show-cause notice, dated 24-1- 2003 for making rectification under S.221 of the Income Tax Ordinance, 2001 and the consequential order was ab initio void and illegal and could not be maintained. Appellate Tribunal had inadvertently not considered said legal position although same was specifically contended on behalf of the assessee. This was an apparent mistake, which was liable to be rectified. Such rectification made by the Assessing Officer vide order, dated 28-6-2003 was not sustainable in the eyes of law. Orders of Appellate Tribunal were recalled and order of First Appellate Authority was vacated and order passed by the Taxation Officer under S.221 of the Income Tax Ordinance, 2001 was cancelled by the Appellate Tribunal. Miscellaneous application filed by the assessee was allowed and his main appeal also succeeded.
(xii) Miscellaneous Applications Nos. 734/LB to 738/LB of 2006 and W.T.As. Nos. 515/LB to 519/LB of 2005 decided on 20-2-2009 reported at 2009 PTD (Trib.) 1551, wealth tax matter. The assessee contended that findings given by the First Appellate Authority were not only well-reasoned but stood supported by the relevant case-law incorporated in the order. Mistake floating on the surface of the order was committed when the Appellate Tribunal observed that no reason had been assigned and no case-law had been cited in support thereof when the same stands mentioned in the order of First Appellate Authority. ITAT found that contention of assessee was correct. Case-law discussed by the First Appellate Authority was neither mentioned nor discussed by the Appellate Tribunal while dismissing appeals of the assessee. Arguments advanced by the assessee before the Appellate Tribunal were also neither attended to, nor dilated upon. Resultantly, mistakes on the face of record had been committed, which required rectification. Order was recalled by the 1TAT in circumstances.
(xiii) Miscellaneous Applications (A.G.) Nos. 18/LB to 22/LB of 2008, 451/LB of 2008 to 455/LB of 2008 etc. Etc. Decided on 11-4-2009 reported at 2010 PTD (Trib.) 91, income tax matter. The grounds taken up by the assessee on the issue of gross profit rate remained un-adjudicated; the Appellate Tribunal committed a mistake which could be treated as 'mistake apparent on the face of record'.
Miscellaneous application of the assessee was accepted and earlier order on the issue of gross profit rate was recalled by the Appellate Tribunal.
(xiv) Miscellaneous Applications (A.G.) Nos. 18/LB to 22/LB of 2008, 451/LB of 2008 to 455/LB of 2008 etc. Etc. Decided on 11-4-2009 reported at 2010 PTD (Trib.) 91, income tax matter. The grounds taken up by the assessee on the issue of gross profit rate remained un-adjudicated, the Appellate Tribunal committed a mistake which could be treated as 'mistake apparent on the face of record'.
Miscellaneous application of the assessee was accepted and earlier order on the issue of gross profit rate was recalled by the Appellate Tribunal.
' Learned AR placing reliance on the above case-law has submitted that the courts and this tribunal has a track record for the recalling orders in the interest of justice and fair-play so that no prejudice be caused to any party in appeal. In the instant case the Bench, the argument taken by the appellant, which was relating to a binding precedent, had escaped from the attention of learned Members of the Bench. Had the bench adjudicated the case in the light of case-law which is binding precedent on point of limitation argued at bar the result of the instant appeal would have been different.
8. The learned DR on the other side is supporting the order of this Tribunal and the impugned orders of the officers below. He is however unable to controvert the legal position regarding limitation on the basis of above referred case-laws.
9. We have heard the learned representative of the parties, perused the impugned orders, relevant available record and the case-law cited at the bar.
After perusal of the case law referred above we have noted that Sales Tax Act, 1990' as originally framed did not prescribed any limitation for completing the assessment/adjudication proceedings after the issuance of show-cause notice under section 36 of the Sales Tax Act, 1990. A proviso was added by Finance Act, 2000 stipulating a period of 45 days to complete the assessment proceedings by the concerned Officer of Sales Tax empowered in that behalf. The word 45 days was substituted by 90 days by Finance Act, 2003. From the language of section 36(3), it has limited scope of exercising of the jurisdiction after issuance of notice to basically 90 days or such extended period as the Collector after recording proper reasons in writing has fixed. However, it is again subject to 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 section 36(3) is 180 days (including earlier 90 days and extended 90 days). Obviously if the extension has been given by the Collector before the expiry of earlier 90 days.
' The perusal of record shows that the Collector, Collectorate of Customs, Sales Tax and Central Excise (Adjudication), Lahore has not issued any extension to himself, therefore, the applicable limitation in terms of section 36(3) has to be 90 days. The show-cause notice in this case was issued on 4-6-2003 which was disposed of by Collector (Adjudication), Collectorate of Customs, Sales Tax and Central. Excise, Peshawar by passing an ex parte order on 23-12-2003. This Order was recalled by the FBR vide its letter C. No, 2(13)S(Adj)/2004 dated 29-4-2004 under section 45A of the Sales Tax Act, 1990. Therefore, the period of limitation would start from the Order of the Board which is 29-4-2004. We have noted that the case was fixed from time to time by the Collector (Adj.), Collectorate of Customs, Sales Tax and Central Excise, Lahore between 10-5-2004 to 14-6-2005 and finally culminated in Order-in-Original No, 163 of 2005 dated 24-6-2005 after a period of 13 months and 25 days as against the prescribed time limit of 90 days or maximum 180 if the reasons for extension are given. There is no mention in the order-in-original regarding the extension of time therefore, the limitation of 90 days was applicable. Thus, Order-in-Original No,163 dated 24-6-2005 is patently barred by limitation of time prescribed under the proviso to section 36(3) of the Sales Tax Act, 1990.
' We have found that inadvertently the argument of limitation has escaped from the learned Members of the Bench of the CESTAT despite of registering the argument of the appellant in body of the Order. We are therefore of the view that the Bench has committed an error which is floating on the surface of the record. In the constrained circumstances, we hereby recall the order passed by the CESTAT and cancel the same in the interest of justice as inadvertently the order has been passed without considering the legal position despite mentioning the same in the order as arguments of the learned AR of the applicant in para 6 referred above.
This brings us further to correct the error apparent from the record and in the light of above discussion we hold that the Order-in- Original No,163 of 2005, dated 24-6-2005 passed by Collector (Adjudication), Collectorate of Customs, Sales Tax and Central Excise, Lahore is bared by limitation of time in terms of section 36(3) of the Sales tax Act, 1990 and, is hereby set aside.
10. The Miscellaneous Application filed by the applicant is allowed. Consequently, the main appeal filed by the appellant succeeds. It is ordered accordingly.