CH. ANWAAR UL HAQ (JUDICIAL MEMBER):--The titled appeal has been filed on behalf a registered person called in question the order vide No. Dated 13-11-2012 passed by the Commissioner (Appeals-I) Lahore on the following grounds:-- The Commissioner Inland Revenue Appeals had completed the hearing of appeal in two hearings whereby, tax department remain unable to attend the hearing. Subsequently, no notice was ever served on the taxpayer company. However, while finalizing appellate order, the appellate authority solely relied on the contention of the tax department. The appellate Commissioner neither served notice of any further hearing not confronted the taxpayer with the information given by the tax department. Accordingly, concluding remarks and the order passed by the CIR(A) is unjust, unfair and unlawful. The Commissioner Appeal's apprehension that the pertinent information has been concealed by the taxpayer is unjust and unfair. Moreover, the comments of Commissioner Appeals are totally baseless and unjust without confronting the taxpayer. That the tax levied by the tax officer amounting to Rs.43,758,843/- along with penalty and additional surcharge and confirmed by the commissioner appeals is unjust and unfair.
During court proceedings, the learned A.R. Of the appellant sought permission to raise additional ground which is allowed. The same is also reproduced as under:- "That on last date of hearing it was argued by the undersigned that the officer who issued show cause notice in the subject case, adjudicated the entire matter, passed the assessment order and determined the liability of the appellant he was not competent to do so in term of S.R.O. 555(1)/1996 dated 01-06-1996. Perusal of the aforesaid Notification reveals that adjudicating officer (Deputy Commissioner) cannot adjudicate the matter which revenue was involved more than one million.
(copy of SRO is enclosed). Whereas in this case, he passed the assessment order of Rs.43,785,843/- vide order dated 13-11-2012 which is much beyond its jurisdiction."
2. The facts of the case in brief are that the appellant is engaged in manufacturing and sale of Enameled Copper wire and Paper covered insulated copper strips. An information was received by the Directorate of Intelligence and Investigation to the effect that gang misused sales tax registration No. Of registered persons for issuing of fake sales tax invoices. The Directorate of Intelligence and Investigation alleged that the appellant had also claimed input tax against the invoices issued by the said gang: The appellant was allegedly as one of the buyers from the said so-called gang. The Directorate of Intelligence and Investigation prepared audit/contraventin n report in the light of which the DCIR, Audit-I Zone-I, LTU, Lahore issued show cause notice wherein it was alleged that the appellant was involved in the tax fraud and demanded an amount of sales tax Rs.43,785,843/- that was earlier claimed/adjusted as input tax. Subsequently, the order was issued by learned DCIR imposing the sales tax amounting to Rs.43,785,843/- as pointed out in the contravention report. Moreover, he also imposed default surcharge along with 100% penalty.
3. Being aggrieved by the treatment meted out by the learned DCIR, taxpayer/appellant filed first appeal before the learned CIR (Appeals), Lahore, who dismissed the same and upheld the order of the DCIR, with the following observations:-- "I have deliberately not reproduced the observations of the learned officer and arguments of the learned AR in extenso because the proceedings in this case took a new turn when the appellant in view of the amnesty scheme announced by the government, the appellant deposited the principal amount to claim waiver of penalty and default surcharge. The contents of the said scheme contained in S.R.O. No.606 are reproduced as under:-- S.R.O. 606(I)/2012:---The exercise of the power conferred by section 34A of the Sales Tax Act,1990, the Federal Government, in supersession of its notification No.S.R.O. 563(1)/2012 dated 25th May, 2012 is pleased to exempt the whole amount of default surcharge and penalties payable by person against whom an amount, of sales tax is out standing on account of illegally adjusted input tax, subject to the following conditions: i. Whole of the principal amount of illegally adjusted sales tax is paid by the 25th June, 2012 and ii.any case, complaint or proceedings filed by the registered persons before any court of law, Federal Tax Ombudsman or any other authority is withdrawn by the said date.
2. Any criminal proceedings lodged by the department shall abate from the date of complying with the above conditions by the registered person.
The Department placed a copy of the order of the Honourable Lahore High Court dated 26-06- 2012 whereby the Writ Petition No.8624/2011 has been withdrawn. Subsequent to this, the appellant applied to the department for waiver of penalty, default surcharge and abatement of criminal proceedings in terms of SRO mentioned supra that was accepted vide letter C.No.I.I. S Tax/Misc- Corr/S.Tax/fraud/3309/6712 dated 09-07-2012 by the department.
It is unfortunate that the learned AR did not inform me about this development that was his duty to place all the relevant facts on record. Nonetheless, in view of the above factual position, the appeal is dismissed as the appellant has conceded the case made out against him. The appellant cannot be allowed to blow hot and cold in the same breath. As the saying goes; you cannot have your cake and eat it too."
4. The learned AR assailed the impugned order before us on the grounds mentioned above.
However, the main thrust of arguments of the learned AR that issuance of show came notice and on the basis thereof passing the order in original was without jurisdiction as having been issued/passed by the Deputy Commissioner Inland Revenue not competent in terms of S.R.O.
555(1)/1996 dated 01-07-1996 holding the field at the relevant time. He submitted that the pecuniary jurisdiction of the Deputy Commissioner was to. Deal with the cases involving amount of tax not exceeding one million rupees whereas the show cause notice was issued for the alleged amount of Rs.43,785,843/- exceeding such limit, thus, the Deputy Commissioner Inland Revenue was not competent to issue the show cause notice or adjudicate the matter or passed order-in- original being beyond the said monetary limit provided in the above referred S.R.O. Reliance was placed on the judgment of Tribunal discussed in the subsequent paras here-under. He further contented that the said SRO remained dormant till the omission of section 45 of the Sales Tax Act, 1990 i.e. 28-09-2009, the said S.R.O. Became applicable on omission of the said- section. He contended that S.R.O. 555(1)/1996 dated 1-7-1996 was operative and holding the field till 01-06-2012 i.e. The date it was rescinded by the Federal Board of Revenue vide S.R.O. 594(1)/2012 dated 01-06- 2012.
5. The learned DR on the other hand while opposing the arguments advanced by the learned counsel for the appellant supported the impugned order and contended that S.R.O. 555(1)/1996 dated 01-07-1996 only issued in respect of officers of Collectorates and not the Officer of Inland Revenue and on omission of section 45 from the Sales Tax Act, 1990, every Officer of Inland Revenue was competent to issue show cause notice and adjudicate the case irrespective of pecuniary jurisdiction. He further contended that the show cause notice was rightly issued under sections 11(2) and 36(1) of the Sales Tax Act, 1990 and the Deputy Commissioner Inland Revenue was competent to adjudicate the matter.
6. We have considered the arguments put-forth by the learned representatives of both the sides and perused the available record and also perused the judgments cited at bar. In our considered view, the pivotal issue that arises out of the impugned order and is required to be deliberated upon is that whether or not the first adjudicating authority the learned Deputy Commissioner Inland Revenue could assume jurisdiction in absence of section 11(3) and section 45 of the Sales Tax Act, 1990 and under sections 11 and 36 of the Sales Tax Act, 1990 in respect of those cases where the amount of tax involved exceeds one million rupees. To appreciate the points raised by the appellant it is necessary to narrate briefly the history of the legislation on the subject at which the powers were given to the adjudicating officers to adjudicate upon the matters relating to sales tax.
The Sales Tax Act, 1990 enabled the Federal Board of Revenue to frame rules, issue notifications, orders amtmg others, for the purposes of this Act. In pursuance thereof Section 11(3) since repealed, of the Sales Tax Act, 1990 empowered the Federal Board of Revenue "to issue a notification in the official Gazette, specify the officers of sales tax authorized to take action under the provisions of subsection (1) and subsection (2)," By virtue of this power, the Federal Board of Revenue issued a notification S.R.O. 555(1)/1996 dated 1-7-1996. According to the said notification powers had been given to the officers of sales tax to adjudicate the cases involving assessment of sales tax, charging of additional tax, imposition of penalty and recovery of amount erroneously refunded subject to limitation and conditions as specified therein. This notification was replaced by a permanent legislation i.e. Section 11(3) of the Sales Tax Act, 1990 was omitted and section 45 substituted by virtue of the Finance Ordinance, 2000 which also contained a similar powers to the Officers of Sales Tax given in the earlier Notification S.R.O. 555(1)/1996 dated 01-07-1996.
Subsequently the "Inland Revenue Services" (IRS) Department was created by the Revenue Division vide Office Memorandum No. F-6/2/2009-CP-II dated 12-09-2009 with the intention to bring the Federal Excise Act, 2005, Sales Tax Act, 1990 and Income Tax Ordinance, 2001 under one roof.
Against this back ground "Finance Amendment Ordinance, 2009" was promulgated by virtue of which section 45 of the Sales Tax Act, 1990 and section 31 of the Federal Excise Act, 2005 was omitted. These amendments were continued in force till 05-06-2010 through subsequent "Finance Amendment Ordinance, 2010" and finally through "Finance Act, 2010" aforesaid amendments were saved with effect from 06-06-2010 which are still continued in the respective statutes.
7. We shall now proceed to discuss the principal point argued before us in respect of the notification S.R.O. 555(1)/1996 dated 01-07-1996 as to whether this notification was reactivated and in force after the date when section 45 was omitted. To appreciate this issue it will be appropriate to reproduce aforesaid SRO hereunder:-- "GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE SALES TAX WING Islamabad, the 1st July, 1996 NOTIFICATION (SALES TAX)
S.R.O. 555(I)/96.---In exercise of the powers conferred by subsection (3) of section 11 and section 36 of the Sales Tax Act, 1990, the Central Board of Revenue is pleased to authorise the officers of sales tax specified in column (2) of the table below to adjudicate the cases involving assessment of sales tax, charging of additional tax, imposition of penalty and recovery of amount erroneously refunded subject to limitations and conditions as are specified in column (3) of the said table:- S. No.Designation of Officer Limitations and Conditions
(1) (2) (3)
1. Superintendent/Senior Auditor.Cases falling under subsection (1) of section 11 of the Act.
2. Assistant Collector Cases falling under subsection (2) of section 11 and section 36 of the Act, provided that the amount of tax involved or the amount erroneously refunded does not exceed five hundred thousand rupees.
3. Deputy Collector Cases falling under subsection (2) of section 11 and section 36 of the Act provided that the amount of tax involved or the amount erroneously refunded does not exceed one million rupees.
4. Additional Collector Cases falling under subsection (2) of section 11 and section 36 of the Act without any restriction as to the amount of tax involved or amount erroneously refunded.
Amended vide S.R.O. 1318(1)/98, dated 28-11-1998
8. Before proceeding Maher, it would be convenient to consider the nature of the said notification which is clearly a procedural notification giving the powers to the Officers of Sales Tax Collectorate to adjudicate upon the matters in respect of the cases involving assessment of sales tax, charging of additional tax, imposition of penalty and recovery of amount erroneously refunded subject to limitation and conditions as specified therein. This notification does not create any right or liability.
We have already seen that this notification was replaced by a permanent legislation, section 11(3) of the Sales Tax Act, 1990 was omitted and section 45 substituted by the Finance Ordinance, 2000.
Subsequently, Finance (Amendment) Ordinance, 2009 was promulgated by virtue of which section 45 of the Sales Tax Act, 1990 and section 31 of the Federal Excise Act, 2005 was omitted. These amendments were continued in force till 05-06-2010 through subsequent Finance (Amendment)
Ordinance, 2010 and finally through Finance Act, 2010 the amendments were saved in the said Acts with effect from 06-06-2010 which are still continued in the statutes. Notifications issued under the said provisions have not been saved either in the Sales Tax Act, 1990 or through any notification. As explained by Lord Reading C.J. In Watson v. Winch:- "It has been long established that, when an Act of Parliament is repealed, it must be considered (except as to transactions passed and closed) as if it had never existed It would follow that any bye-law made under a repealed statute ceases to have any validity unless the repealing Act contains some provision preserving the validity of the bye-law notwithstanding the repeal."
As the parent section 11(3) of the Sales Tax Act, 1990 under which the notification S.R.0.555(I)/1996 was made has been repealed without any saving clause for this notification.
9. We have in our mind section 24 of the General Clauses Act, 1897 and if the submission of the learned AR that the notification would be a bye-law that would have continued notwithstanding the repeal of section 11(3) of the Sales Tax Act, 1990 is accepted then it will be in conflict with Section 24 of the General Clauses Act, 1897. Section 24 of the General Clauses Act, 1897 is reproduced hereunder:-- Section 24.
"Where any Central Act or Regulation is, after the commencement of this Act, repealed and re- enacted with or without notification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule form or bye-law made or issued under the repealed Act or Regulation, shall, so far as it is not inconsistent with the provisions re-enacted continue in force and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment, notification, order scheme, rule form or by- law, made or issued under the provisions so re-enacted and when any Central Act or Regulation, which, by a notification under S. 5 or 5A of the Scheduled Districts Act, 1874, or any like law, has been extended to any local area, has, by a subsequent notification, been withdrawn from and re- extended to such area or any part thereof the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section."
[emphasis supplied] We consider that this submission is entirely without force and in this conclusion we find support from Interpretation of Statute by Craies on Statute Law, 6th Edn. Page 334: which reads as under:- "If the statute under which bye-laws are made is repealed, those bye-laws are impliedly repealed and cease to have any validity unless the repealing statute contains same provision preserving the validity of the bye-law notwithstanding the repeal. This follows from the rule ....
When an Act of Parliament is repealed it must be considered (except to transactions passed and closed) as if it had never existed."
10. After creation of Inland Revenue Services (IRS) Department, section 30(3) of the Sales Tax Act, 1990 was substituted through Finance Act 2010 which only empowered Commissioner Inland Revenue to direct their subordinate Officers to perform functions in respect of such persons or classes of persons or such areas as the Commissioners may direct. Section 30(3) of the Sales Tax Act, 1990 is reproduced hereunder:- Section 30(3).
"Additional Commissioner Inland Revenue, Deputy Commissioners Inland Revenue, Assistant Commissioner Inland Revenue, Superintendent Inland Revenue, Inland Revenue Audit Officer, Inland Revenue Officer, Inspector Inland Revenue, and officer of Inland Revenue with any other designation shall be subordinate to the Commissioner Inland Revenue and shall perform their function in respect of such persons or classes of persons or such areas as the Commissioners, to whom they are subordinate, may direct." [emphasis supplied] By virtue of the power given in the aforesaid section, the Commissioners Inland Revenue issued jurisdictional orders for their subordinate officers and directed them to perform their functions in respect of such persons or classes of persons or such areas as they were directed. According, to the said jurisdictional orders powers had been given to the Officers of Inland Revenue inter alia under sections 11 and 36 to adjudicate the cases involving assessment of sales tax, charging of additional tax, imposition of penalty and recovery of amount erroneously refunded subject to limitation and conditions as specified therein. By following the jurisdictional order issued by the Commissioner Inland Revenue the learned Deputy Commissioner Inland Revenue had rightly issued the show cause notice under sections 11(2) and 36(1) of the Sales Tax Act, 1990 and passed the Order-in-Original dated 29-05-2012. Whereas, the S.R.O. 555(1)/1996 dated 01-07-1996 was inconsistent with the provisions of section 30(3) of the Sales Tax Act, 1990 and only deals with the officers of defunct Customs, Excise and Sales Tax group cadre. The Honorable Supreme Court of Pakistan in the case titled as A.R.Awan and 2 others v. City District Government, Karachi reported as 2011 SCMR 691 held that:-- "It is not for the court to extend the scope of the Act on the ground of convenience when the language of the law is clear beyond doubt".
11. We have also observed that the FBR vide S.R.O. 594(1)/2012 dated 01-06-2012 stately while exercising powers under section 11 of the Sales Tax Act, 1990 rescinded S.R.O. 555(I)/1996/dated 01- 07-1996, reproduced hereunder:-- GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND REVENUE (REVENUE DIVISION)
Islamabad, the 1st June, 2012.
NOTIFICATION (SALES TAX)
S.R.O. 594(1)12012.---In exercise of the powers conferred by clause (46) of section 2, clause (b) of subsection (2) of section 3, section 11, clause (a) of subsection (2) of section 13 and section 36 of the Sales Tax Act, 1990, the Federal Government is pleased to rescind the following Notifications, namely:-
(i) No. S.R.
0. 555(1)/1996, dated the 1st July, 1996;
(ii) No. S.R.O. 849(1)/1997, dated the 25th September, 1997;
(iii) No.S.R.O. 103(1)/2005, '.Dated the 3rd February, 2005;
(iv) No. S.R.O. 15(1)/2006, dated the 6th January, 2006; and
(v) No. S.R.O. 644(1)/2007, dated the 27th June, 2007.
2. This Notification shall take effect on and from the 2nd day of June, 2012.
12. In our firm view, at the time of issuance of aforesaid rescinding Notification dated 01-06-2012, the provisions of subsection (3) of section 11 of the Sales Tax Act, 1990 were not available on the statute book, where under S.R.O. 555(1)/1996 was issued. Therefore, it was a futile exercise on the part of the FBR as the said SRO had already lost its legal efficiency since the date of enforcement of the Finance Ordinance, 2000 whereunder subsection (3) of section 11 of the Sales Tax Act, 1990 was omitted. The learned AR also having no answer to the query, as to whether at the time of rescinding notification, any other SRO was issued or amendment was brought on the statue book for assumption of jurisdiction to any authority regarding performing the function of adjudication, except the powers as given under section 30(3) of the Sales Tax Act, 1990.
13. We have also minutely examined the referred judgments by the learned AR, on the point of pecuniary jurisdiction in terms of 555(1)/1996 dated 01-07-1996, relevant portion of the said judgments is re-produced here under:-- STA No.871/LB/2012 Judgment dated 16-10-2012 " (v) He further argued that the Assistant Commissioner Inland Revenue/Audit officer in the subject case was not competent to issue the show cause notice and to adjudicate the matter in view of the provisions of S.R.O. 555(1)11996 dated 01-06-1996 which SRO is still in the field. In terms of the said SRO, an Assistant Collector (now Assistant Commissioner) could adjudicate the cases falling under subsection (2) of section II and section 36 of the act provided that the amount of tax involved or the amount erroneously refund did not exceed Rs. 500,000/I-. The impugned adjudication by the adjudicating authority was, therefore, illegal and void ab initio. The counsel relied on the judgment of this Appellate Tribunal in STA No.530/LB/2011 and STA No.578/LB/ 2011 titled as Messrs Coslab (Pvt.) Ltd. And Messrs Itereos Copy of the said judgment was also placed on record."
"(iii) We also agree with the contention of the learned counsel for the respondent regarding pecuniary, jurisdiction of the Assistant Commissioner. Although, the this argument was not pleaded at first appeal stage by the respondent but as per dictum of apex court in referred judgment reported at PTCL 2007 PLC 64(sic) that pure question of law can be raised at any stage of proceedings. The issue of pecuniary jurisdiction of the officers of Inland Revenue under S.R.O.
555(1)/1996 has already been settled by another bench of this Tribunal in STA No.530/LB/2011 and STA No.578/LB/2011 and we concur with the finding in the said judgment. Consequently, it is held that the Assistant Commissioner Inland Revenue Audit officer who issues the show cause notice and passed the Assessment Order, therefore, cannot be assumed to have been passed under the particular statute and is held to be void ab initio." (emphasis supplied] S.T.As. Nos. 530 and 578/LB/2011 Judgment dated 11-10-2011 "4. The learned AR appearing on behalf of the appellant contended that the show cause notice as well as order in original is beyond jurisdiction of the Deputy Commissioner of Inland Revenue in terms of S.R.O. 555(1)/1996 dated 01-07-1996 hence the impugned order is void ab initio. Under the said notification issued by the Federal Board of Revenue in terms of section 36 of the Sales Tax Act, 1990, the Deputy Commissioner of Inland Revenue has been authorized to adjudicate the cases involving assessment of sales tax, charging of additional tax and imposition of penalty provided that the amount of tax involved does not exceed Rs.1,000,000 whereas in the instant case, the learned Deputy Commissioner had been pleased to adjudicate the case involving sales tax of Rs.17,503,680/-. Reliance has been placed on the judgment of the Tribunal reported as 2011 PTD (Trib.) 1943."
"9. We also find ourselves in full agreement with the arguments of learned AR that the Show cause notice issued by the Deputy Commissioner was beyond his pecuniary jurisdiction. It has already been held by the Tribunal in its judgments in the appeals supra that a notice issued without jurisdiction is illegal and unlawful and no action can be taken against a citizen in pursuance thereof. It has also been held in the case reported as 2006 PTD 219 and 2011 PTD (Tray.) 1943 that an order without jurisdiction is a fraud on the law and can never be assumed to have been passed under the particular statute." [emphasis supplied] STA No. 55/18/2012 Judgment dated 06-04-2012 "The issue of pecuniary jurisdiction of the officer of Inland Revenue under S.R.O. 555(1)/1996 dated 01-07-1996 has already been settled by another bench of this Tribunal in STA No.530/LB/2011 and STA No.578/LB/2011 and we concur with the findings in the said judgment. Consequently, it is held that the Assistant Commissioner/Inland Revenue Officer Audit Officer, who issue the show cause notice and passed the orderin-original therefore, cannot be assumed to have been passed under the particular statute and is held to be void ab initio." [emphasis supplied].
STA No.579/LB/2012 Judgment dated 18-10-2012 "Perusal of the aforesaid provision clearly shows that the Deputy Collector appearing at Serial-3 of the Table to S.R. 0. 555(1)/1996 dated 01-07-1996 shall be construed and read as Deputy Commissioner, Inland Revenue and as such the objection of the learned DR that since the Deputy Collector was mentioned in the said notification, thus, it would not apply to the Deputy Commissioner, Inland Revenue is without any substance. It is an admitted position-that the tax involved in this case was much beyond the monetary limit prescribed for adjudication of the cases by the Deputy Commissioner, Inland Revenue as Serial-3 of the Table to S.R.O. 555(1)/1996 dated 01-07-1996 and the said SRO remained in the field till 01-06-2012 when it was rescinded by the Federal Government vide S.R.O. 594(1)/2012 dated 01-06-2012. While rescinding S.R.O.
555(1)/1996 dated 01-07-1996, the Federal Government specifically mentioned that the rescinded SRC shall take effect on and from the 2nd day of June, 2012 meaning thereby that the earlier notification prescribing the pecuniary jurisdiction of the various officers was very much in the field till 01-06-2012 and the contention of the learned counsel for the registered person that the show cause notice and superstructure built there upon by way of original order and the impugned order was without jurisdiction and coram non judice.........
It is further pointed that the issue regarding jurisdiction of the officer of Inland Revenue to adjudicate tax matters has already been decided by this Tribunal in case "M/s. Global (Pvt.) Ltd.
And another v. Commissioner, Inland Revenue, RTO, Multan" vide order dated 11-10-2011 passed in STA No.530/LB/2011 and STA No. 578/L11/2011 and "M/s. Ibrahim Steel Casting, Dewab Nagar Road, More Emandabad, Gujranwala v. Commissioner Inland Revenue(Appeals), Lahore" vide order dated 06-04-2012 passed in STA No.55/LB/2012. In the said cases, it was held that the show cause notice issued by the Deputy Commissioner was beyond his pecuniary jurisdiction in term of S.R.O. 555W/1996 dated 01-07-1996 and we find ourselves in full agreement with the aforesaid judgments...."
[emphasis supplied] STAs Nos. 629 and 630/LB/2012 Judgment dated 24-10-2012 ".... The case-law relied, upon by learned AR shows that the issue regarding jurisdiction of the officer of Inland Revenue to adjudicate tax matters has already been decided by this Tribunal in case of "Messrs Global (Pvt.) Ltd and another v. Commissioner, Inland Revenue, RTO, Mahan" vide order dated 11-10-2011 passed in STA No. 530/LB/2011 and STA No. 578/LB/2011, and "M/s. Ibrahim Steel Casting, Dewab Nagar Road, More Emanabad, Guiranwala v. Commissioner Inland Revenue (Appeals), Lahore" vide order dated 6-4-2012 passed in STA No. 55/IB/2012. It was held that the show cause notice issued by the Deputy Commissioner was beyond his pecuniary jurisdiction in term of S.R.O. 555(1)11996 dated 01-07-1996 and we find ourselves in full agreement with the aforesaid judgments....... "
[emphasis supplied] STAs No. 685 and 686/LB/2012 Judgment dated 21-12-2012 [2013 PTD (Trib.) 537] "9. The issue of pecuniary jurisdiction of the Inland Revenue under S.R.O. 555(I)/1996 dated 01- 06-1996 has already been settled by some other benches of this Tribunal in STA No. 530/LB/2011, STA No. 578/LB/2011 and 55/LB/2012 and we agree with the findings in the said judgments.
Consequently, it is held that the Deputy Commissioner Inland Revenue who issue the show cause notice and passed the impugned Assessment Order, could not assume the jurisdiction to issue the show cause notice and pass the impugned Assessment Order under the law therefore, the same are without lawfulauthority and void ab initio." [emphasis supplied] STA No. 69/LB/2013 Judgment dated 26-06-2013 "The issue of pecunjwy jurisdiction of the Inland Revenue under S.R.O. 555(1)/1996 dated 01-06- 1996 has already been settled by some other benches of this Tribunal in STA No. 530/LB/2011, STA No. 578/LB/2011 and 55/LB/2012 and we agree with the findings in the said judgments.
Consequently, it is held that the Deputy Commissioner Inland Revenue who issue the show cause notice and passed the impugned Assessment Order could not assume the jurisdiction to issue the show cause notice and pass the impugned Assessment Order under the law therefore, the same are without lawful authority and void ab initio."
[emphasis supplied]
14. It was noted by us that amongst afore-quoted judgments, consolidated judgment dated 11-10- 2011 rendered in STA No.530/LB/2011 and STA No.578/LB/2011 titled as MA. Coslab (Pvt.) Ltd. And Messrs Itereos was earlier in time and was followed in subsequent judgment dated 06-04-2012 rendered in STA No. 55/LB/2012. Later on, aforesaid both judgment were made basis by this Tribunal for the cancellation of impugned order-in-original passed by the learned adjudicating authorities on the point of pecuniary jurisdiction. After minute study of all these judgments, it was further noted that these are also silent regarding implications of the "Finance Amendment Ordinance, 2009", "Finance Amendment Ordinance, 2010", "Finance Act, 2010" and the substitution of section 30(3) of the Sales Tax Act, 1990, whereunder, jurisdiction was vested in the authorities of Inland Revenue Service (IRS) to' exercise the powers irrespective of any restriction of pecuniary jurisdiction. In our opinion, this Tribunal while rendering referred judgments was not properly assisted by the taxpayers, hence, these referred judgments are "per incuriam". Further, the law of precedent is not applicable to per-incuriam decisions, which carry no binding force. Reliance may be placed on PLD 1963 Kar. 280, 1995 CLC 1453 Kar and PLD 1991 Kar. 320.
15. In view of the above, we reject the plea of the appellant regarding the issuance of show-cause notice and affirm the assumption of jurisdiction by the learned Deputy Commissioner Inland Revenue (DCIR) in terms of section 30(3) of the Sales Tax Act, 1990 for issuance of show-cause notice and passing of Order-in-Original dated 29-05-2012. We further hold that S.R.O. 555(1)/1996 dated 01-07-1996 had lost its validity when the provision of subsection (3) of section 11 of the Sales Tax Act, 1990 was repealed/omitted by virtue of Finance Ordinance, 2000. The subject issue of sub-ordinate legislation is best summarized by saying that "all the chicks will go with the hen".
16. We have also perused the record and given due consideration to the oral submission made by the rival parties. The learned Deputy Commissioner Inland Revenue after due consideration and application of mind has passed the order. The learned AR had neither specifically rebutted the allegations leveled in para (6) of the show cause notice before the Assessing Officer nor before us which clearly establish that the appellant has knowingly and dishonestly committed a tax fraud and cause a huge loss to the national exchequer. Further it has been observed that the appellant by availing the amnesty S.R.O. Mentioned supra has withdrawn the W.P. No.8624/2011 with a specific request that "since the applicant has availed amnesty in term of SR.
0. 606(1)/2012 dated 01-06-2012 and deposited all entire amount, thus, he does not want to press the titled petition." and applied for waiver of penalty, default surcharge and abatement of criminal proceedings which was accepted by the department in terms of the aforesaid SRO vide letter C .
No . I. I. S Tax/Misc-corr/S Tax/Fraud/33/09/6712 dated 09-07-2012. After availing the amnesty scheme and withdrawal of the writ petition by the appellant, the act of filing of instant appeal before this forum is not appreciable; the apex court in a number of cases has deprecated such kind of practice. Thus, the appellant cannot be allowed to blow hot and cold in the same breathe.
The findings given by the respondent assessing officer and confirmed by the appellate authority are in consonance with provisions of the Sales Tax Act, 1990.
17. For the reasons recorded above, we do not find any in this appeal. The same is accordingly dismissed.
(CH. ANWAAR UL HAQ) JUDICIAL MEMBER (SOHAIL AFZAL)
ACCOUNTANT MEMBER MIS. ATTA CABLES (PVT) LTD, LAHORE S.T.A. No.1194-A/LB/2012 MA(AG) No.41/LB/2013 DISSENTING NOTE:---My learned brother has rejected the grounds of appeal in the case of Messrs Atta Cables (Pvt.) Ltd., Lahore and has affirmed the findings given by the respondent assessing officer and confirmed by the appellate authority which has been opined in consonance of the provisions of Sales Tax Act, 1990.
Brief facts of the case are that the appellant is engaged in manufacturing and sale of Enameled Copper wire and Paper covered insulated copper strips. An information was received by the Directorate of Intelligence and Investigation to the effect that gang misused sales tax registration No. Of registered persons for issuing of fake sales tax invoices. The Directorate of intelligence and investigation alleged that the appellant had also claimed input tax against the invoices issued by the said gang. The appellant was allegedly one of the buyers-from the said so-called gang. The Directorate of Intelligence and Investigation prepared audit/contravention report in the light of which the DCIR, Audit-I Zone-I, LTU, Lahore issued show cause notice wherein it was alleged that the appellant was involved in the tax fraud and demanded an amount of sales tax Rs.4a,785,843/- that was earlier claimed/adjusted as input tax. Subsequently, the order was issued by learned DCIR imposing the sales tax amounting to Rs.43,785,843/- as pointed out in the contravention report.
Moreover , he also imposed default surcharge along with 100% penalty. At the appellate stage, the learned Commissioner Inland Revenue Appeals-I, Lahore dismissed the appeal of the registered person and upheld the order of the DCIR.
In my opinion the order is based on two legal issues, one is the S.R.O. 555W/1996 dated 01.07.1996 holding field at the relevant time and the second is the issue of availing of amnesty SRO mentioned supra and the fact is that the applicant had availed the amnesty in terms of amnesty S.R.O.
606(1)/2012 dated 01.06.2012 and deposited all the entire amount. As far as the issue of interpretation of SRO is concerned, the undersigned subscribes the judgments already on record to name of few cases i.e. S.T.A. No.871/LB/2012 dated 16.10.2012, S.T.A. No.530/LB/2011 dated 11.10.2011, S.T.A. No.55/LB/2012 dated 6.04.2012, STA No.579/LB/2012 dated 18.10.2012, S.T.As. Nos.629 and 630/LB/2012 dated 24.10.2012, STAs Nos.685 and 686/LB/2012 dated 21.12.2012, STA No.69/LB/2013 dated 26.06.2013 which settled the issue of pecuniary jurisdiction. However, in my opinion since the applicant has availed amnesty so the act of filing of appeal before this forum is not appreciated and the orders of my learned brother are endorsed on this point only.
(SOHAIL AFZAL)
ACCOUNTANT MEMBER Atta Cables (Pvt.) Limited, Lhr STA No.1194-A/LB/2012 Since, there is a difference of opinion on the point of applicability of S.R.O. 555(1)/96 dated 01-07- 1996, we frame the following Questions of Law on the subject and refer the matter to the Hon'ble Chairperson for hearing on that point in terms of subsection (10) of Section 130 of the Income Tax Ordinance, 2001:--
(i) Whether the S.R.O. 555(1)/96 dated 01-07-1996 has lost its validity when the provisions of subsection (3) of Section 11 of the Sales Tax Act, 1990 was omitted by virtue of Finance Ordinance, 2000?
(ii) After creation of Inland Revenue Service and substitution of Section 30(3) of the Sales Tax Act, 1990 through Finance Amendment Ordinance, 2009, whether jurisdiction for adjudication has been vested in the authorities of Inland Revenue Services (IRS) to exercise said power irrespective of any restriction of pecuniary jurisdiction?
(CH. ANWAAR UL HAQ) Judicial Member (SOHAIL AFZAL) Accountant Member Javed Iqbal Qazi for Applicant.
Raja Sikandar Khan, LA for Respondent. Date of Hearing: 15th September, 2014. Date of Order: 31-10- 2014.
NAZIR AHMAD (JUDICIAL MEMBER).---This Full Bench has been constituted by the Honourable Chairperson entrusting the titled appeal of the registered person to resolve the difference of opinion which has arisen between the Honourable Members of the Division Bench while adjudicating the said appeal. The representatives of both the parties are present and heard at length. Before dilating on the questions referred for adjudication; it is pertinent to mention here that the registered person of the case in hand has also on 25.07.2314 filed miscellaneous application bearing MA(AG) No.33/LB/2014 i.e. After entrusting of the titled appeals to this Full by the Worthy Chairperson by raising certain additional grounds/objections. The question which arise on this point is that whether after the difference of opinion by the two learned Members in a D.B any additional ground can be raised through miscellaneous applications. The learned counsel for the registered person has vehemently argued that since the matter is not finally adjudicated and is pending, therefore, the additional grounds of appeal can be raised through a miscellaneous application. Whereas on the other hand, the learned L.A appearing on behalf of the department has strongly opposed the arguments of the learned counsel by maintaining that the matter to resolve the controversies has been referred to this Bench under section 130(10) of the Income Tax Ordinance, 2001 (hereinafter called "the Ordinance") which clearly suggests that in case of difference of opinion between the two members of the Bench on a point, the same shall be sent to the Chairperson, who will constitute a Bench comprising of one or more than one Member of the Tribunal and that point shall be decided according to the opinion of the majority. He explained that the point referred to Full Bench under subsection (10) of section 130 of the Ordinance is the issue on which two Members of the Bench differ, which shall be decided by the Referee Bench, who shall remain restricted to decide the same point and cannot go beyond that, meaning thereby that the whole case/appeal is not open for adjudication. At the end he prays for rejection of miscellaneous applications. Arguments heard Record perused. Subsection (10) of Section 130 of the Ordinance, which deal with the issue in hand is reproduced for convenience:-- "If the members of a [Bench] are equally divided on a point, they shall state the point on which they differ and the case shall be referred by the Chairperson for hearing on that point by one or more other members of the Appellate Tribunal, and the point shall be decided according to the opinion of the majority of the members of the Tribunals who have heard the case including those who first heard it."
The perusal of above clearly transpires that in case of difference of opinion between the Members of the Bench on a point, they shall state the point on which they differ meaning thereby that they shall formulate the questions and then send the same to the Chairperson for hearing on that point (Questions) by the Referee Bench which may be comprising of a single Member or more to decide the said points or questions but decision of the majority shall be the final.
The language of the above said subsection is very clear being unambiguous and needs no further interpretation at our end. In our considered opinion, the Referee Bench consisting of one or more Members of this Tribunal shall be bound to reply or adjudicate the questions referred to the Bench by the Division Bench and the Bench has no mandate to go beyond the formulated questions. In view of the foregoing discussion, we reject the miscellaneous application of additional grounds of appeal by the taxpayer.
Reverting back to the main issues in hand the following questions have been referred to the Full Bench for adjudication:-- i) Whether the .S.R.O. 555(1)/96 dated 01-07-1996 has lost its validity when the provisions of subsection (3) of Section 11 of the Sales Tax Act, 1990 was omitted by virtue of Finance Ordinance, 2000 ii) After creation of Inland Revenue Service and substitution of Section 30(3) of the Sales Tax Act, 1990 through Finance Amendment Ordinance, 2009, whether jurisdiction for adjudication has been vested in the authorities of Inland Revenue Services (IRS) to exercise said power irrespective of any restriction of pecuniary jurisdiction?
Although, facts of the case have already been given by learned JM in his order but for the sake of brevity, the same are briefly recaptured hereunder. On the basis of an information received by the Directorate of Intelligence and Investigation Department that a gang has misused sales tax numbers of the registered persons for issuing flying invoices and it was also alleged by the said department that the appellant had also claimed input tax against invoices issued by the said gang. Therefore, on the basis of contravention report prepared by the I&I department, DCIR, Audit Zone-1, LTU, Lahore issued show cause notice to the appellant and demanded sales tax of Rs.43,785,843/-, which was claimed by the appellant as input tax. After finding the explanation of the appellant as unsatisfactory, ONO was passed by declaring the said amount as sales tax payable besides default surcharge and imposing 100% penalty. The registered person filed appeal before CIR (Appeals), which also remained unsuccessful. Hence this appeal. At the time of hearing before DB as well as before us, the main thrust of the arguments of learned AR was that issuance of show cause notice and passing of ONO by the adjudicating officer as DCIR was not valid in the light of S.R.O. 555(1)/96 dated 01.07.1996 as the said SRO was holding field at the relevant time. Learned AR submits that as per said SRO, the pecuniary jurisdiction of the DCIR was to deal with the cases involving amount of tax not exceeding one million rupees whereas the show cause notice issued to the appellant was more than the said limit i.e., 43,785,843/-, which obviously exceeded that limit.
Therefore, in his opinion, the DCIR had transgressed his powers to issue show cause notice as well as to adjudicate the matter. He further maintained that adjudicating authority was not lawfully empowered to adjudicate the cases falling within the ambit of sections 36(1) and 11(2) of the Act as the same were beyond his pecuniary limit as specified under S.R.O. 555(1)/1996 dated 01.07.1996, which was rescinded vide notification No. S.R.O. 594(1)/2012 dated 01.06.2012 implying thereby that the said SRO was in the field in the intervening period including at the time of adjudication of the case in hand. He emphasized that after deletion of section 45 of the Act, the said S.R.O. 555(I)/1996 was in the field empowering the officer to issue show cause notice and adjudicate the matters falling under section 36 of the Act. Therefore, the learned DCIR as well OIR were not the adjudicating authorities in the case involving amount of more than Rs.500,000/- and Rs.1,000,000/- respectively under the said notification specifying power of adjudication. The learned counsel further adds that Law favour's the actions of the authorities to be confined to their own spheres of jurisdiction conferred by the statute and action taken by tax functionaries beyond the ambit of jurisdiction is nullity in the eyes of law being without jurisdiction. The learned AR also placed reliance on a number of judgments of this Tribunal wherein the issue of pecuniary jurisdiction under S.R.O.
555(1)/1996 has been thrashed but in favour of the registered persons. The learned AR also emphasized that with omission of section 45 of the Act and simultaneous substitution of section 30(3) of the Act vide Finance Act, 2010, the Officers of Inland Revenue attained unrestricted power to adjudicate the cases involving illegal claim of input tax. He submits that Chapter VI of the Act deals with the appointment and powers of Officers of Sales Tax through sections 30 to 32(aa).
During the period 1996 to 2010 section 30 on the statute book only gave the Sales Tax Authorities like Collector of Sales, Additional Collector of Sales Tax, Deputy Collector of Sales Tax and Assistant Collector of Sales Tax whereas vide Finance Amendment Ordinance, 2009, section 30 was substituted with the authorities of Chief Commissioner Inland Revenue, Commissioner Inland Revenue, Additional Commissioner Inland Revenue and Deputy Commissioner Inland Revenue etc. Subsection (3) of section 30 particularly deals with the powers and functions of the said authorities.
Moreover, section 45, which was omitted by the Finance Act, 2010, conferred the 'powers of adjudication' with regard to the section 11 and section 36, upon the 'Officers appointed under section 30 subjection to certain pecuniary conditions stated therein. He concludes that with the omission of section 45, S.R.O. 555(1)/1996 conferred the respective powers of adjudication upon the Officers with regard to the matters contained in section 11 and section 36 subject to the pecuniary conditions stated therein and if, he explained, it is accepted that with the omission of section 45 of the Act section 33 took field and assigned functions as well as conferred powers upon the Officers contained in sections 11 and 36 then section 31 of the Act would become redundant. On the other hand, learned LA of the department categorically rebutted the arguments put-forth by the learned AR and fully supported the orders of the learned Judicial Member and argued that the reasoning, explanation and case laws relied on by the learned Judicial Member are justifiable whereas the case laws relied on by the learned AR have already been distinguished by the learned Judicial Member in his order. He prayed for rejection of the appeal. Arguments of representatives of both the parties have been given dispassionate and anxious consideration and case laws as well as record appended herewith have minutely been examined. Primarily, appellant argued two questions/issues before the DB. One was with regard to availing of amnesty after payment of tax demand and subsequently withdrawal of writ petitions from the Honourable High Court challenging of ONO in further appeal and secondly the pecuniary jurisdiction of adjudication officer as assessed under S.R.O. 555(1)/1996. On the first issue the two learned Members of the DB agreed by holding the findings of the assessing officer as well as first appellate authority in accordance with the provisions of law and on second issue, two learned Members differed by adopting contrary view resulting in difference of opinion, which is before us for adjudication. Therefore, we will also restrict ourselves to the questions referred by Chairperson for adjudication. Before dilating on the issue that whether S.R.O. 555(1)/1996 was in the field at the time of passing the ONO since, the same admittedly was rescinded vide S.R.O. 594(1)/2012 dated 01.06.2012, therefore, it will be in the fitness of things to recapitulate the relevant provisions of law, which relate to the jurisdiction of the Officers, although the same have already been reproduced by our learned Brother Judicial Member in his order:-- Section 11(3).- "The Board shall, by notification in the official Gazette, specify the officers of Sales Tax authorized to take action under the provisions of subsection (1) and subsection (2)."
(Omitted through Finance Ordinance, 2000) ---Pecuniary .Jurisdiction of the Sales Tax Officers for sections 11 & 36 was introduced:-
11. Assessment of Tax.-
(1) Where a person who is required to file a tax return fails to file the return for a tax period by the due date or pays an amount which, for some miscalculation is less than the amount of tax actually payable, an officer of Sales Tax shall, after a notice to show cause to such person, make an order for assessm ent of tax, including imposition of penalty and additional tax in accordance with sections 33 and 34: Provided that where a person required to file a tax return files the return after the due date and pays the amount of tax payable in accordance with the tax return along with additional tax and penalty, the notice to show cause and the order of assessment shall abate.
(2) Where a person has not paid the tax due on supplies made by him or has made short payment or has claimed input tax credit or refund which is not admissible under this Act for reasons other than those specified in subsection (1), an officer of Sales Tax shall make an assessment of sales tax actually payable by that person or determine the amount of tax credit or tax refund which he has unlawfully claimed and shall impose a penalty and charge additional tax in accordance with sections 33 and 34.
(4) No order under this section shall be made by an officer of [Sales Tax] unless a notice to show cause is given [within five years] to the person in default specifying the grounds on which it is intended to proceed against him and the officer of Sales Tax shall take into consideration the representation made by such person and provide him with an opportunity of being heard: [Provided that order under this section shall be made within [ninety] days of issuance of show cause notice or within such extended period as an officer of Sales Tax [Collector] etc, 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 one hundred and twenty days.] Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding thirty days shall be excluded from the computation of the period specified in the first proviso.
(5) Notwithstanding anything in subsection (1) where a registered person fails to file a return, an officer of Sales Tax, not below the rank of Assistant [Collector], shall subject to such conditions as specified by the Central Board of Revenue, determine the minimum tax liability of the registered person.]
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 show 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 an officer of Sales Tax [Collector] may, for reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed one hundred and twenty days. Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding thirty days shall be excluded from the computation of the periods specified in the first proviso".
(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 ---Section 45 was inserted through Finance Act, 2000, and subsequently omitted through Finance Act, 2010.
45. Power of Adjudication:- In cases involving assessm ent 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:--
(1) 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 erroneously refunded exceeds one million rupees, but does not exceed two and a half million rupees.
(iii) 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 thousands rupees, but does not exceed one million rupees.
(iv) Superintendent Cases falling under subsection (2) of section 11 and section 36 provided that the amount df tax involved or the amount erroneously refunded exceeds ten thousand rupees.
(v) An Officer of SaleiTax with any. Other Designation Such cases as may be notified by the Board.
Amended after vide Finance Act, 2010.
UNDER SECTION 36(3):-- "The officer of [Inland Revenue] 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 [Commissioner] may, for reason to be recorded in writing, fix, provided that such extended period shall in no case exceed [ninety] days [1]"
Vide Finance Amendment Ordinance, 2009, section 72A was introduced and designation of Authorities of Sales Tax Officers was replaced with Authorities of Inland Revenue.
Vide Finance Act, 2010, the above two amendments were reaffirmed. Vide Finance Act, 2012, section 36 was merged in section 11 by omitting section 36.
From a careful perusal of relevant provisions of law reproduced above, it clearly follows that pecuniary jurisdiction of officers of sales tax for adjudication of cases of assessment of sales tax, additional tax, penalty and recovery of amount erroneously refunded was primarily notified by the Board vide S.R.O. 555(1)/1996 dated 01.07.1996 in exercise of powers conferred by subsection (3) of section 11 of the Act and section 36 ibid. Later on by virtue of the Finance Act, 2000, section 45, titled as 'Power of Adjudication' was added to the Act and at \ the same time, provisions of section 11(3) of the Act empowering the Board to notify adjudication powers of sales tax officers were omitted. H Resultantly, powers of adjudication for officers of sales tax was become a subject of Supreme Legislation as enacted under new provisions of section 45 of the Sales Tax Act, 1990 and the Board remained no tore empowered through subordinate legislation by way of any notification to specify pecuniary jurisdiction of offices of sales tax for adjudication. After enactment of section 45 of the Sales Tax Act, 1990 which is a supreme legislation vis-a-vis by deletion of section 11(3) of the 'Act, provisions of Notification No. S.R.O. 555(1)11996 dated 01.07.1996 which by all means is a subordinate legislation became redundant and ineffective till its rescission vide S.R.0.594(1)/2012 dated 01.06.2012.
Even after omission of section 45 from the Sales Tax Act, 1990 through the Finance Act, 2010, revival of said notification could not remained possible as provisions of section 11(3) of the Act whereof were omitted from Statute Book w.e.f. July, 2000 and by its deletion, the Board remained nomore empowered to notify adjudication jurisdiction of officers of sales tax hence; said notification became redundant and superfluous lasting its legal existence and sanctity. Provisions of section 11(3) at the time of omission were as, "The Board shall, by notification in the official Gazette, specify the officers of Sales Tax authorized to take action under the provisions of subsection (I) and subsection (2)." Nevertheless, tar functionaries have lethargically not even bothered to delete the words subsection (3) of section 11 from the preamble of said notification despite its omission from the Sales Tax Act, 1990.
We have also carefully analyzed section 36 and found none of its provision has empowered the Board to specify power of adjudication of officers of sales tax in cases of recovery of amount erroneously refunded likewise in cases of assessment of sales tax for which the Board Was empowered under subsection (3) of section 11 of the Act. Not hesitantly but firmly, we are of the considered opinion that provisions of said notification were not applicable in cases of recovery of tax not levied or short- levied as provisions for recovery cases in these two situations were primarily found. Missing from very outset preamble of said notification however, in case of recovery of amount erroneously refunded, the Board was not empowered under section 36 to issue any notification specifying powers of adjudication of officers of sales tax because it was subsection (3) of section 11 whereunder, the Board was legally empowered to specify powers of adjudication necessarily in cases of assessm ent of sales tax, additional tax and penalty under law.
Summing up the matter at hand in brief, after omission of subsection (3) of section 11 which kept behind only section 36 in preamble of said notification whereunder, the Board was left with no powers to specify pecuniary jurisdiction of officers of sales tax for adjudication. The said notification got impliedly repealed as a consequence of repeal of subsection (3) of section 11 of the Sales Tax Act, 1990 vide Finance Act, 2000. Under no canons of construction it could be argued that the said notification got reinstated as a result of subsequent amendments. Even the expressed repeal vide notification S.R.O. 594(012012 dated 01.06.2012 does not permit such interpretation. The principles of "implied repeal" has recently been explained by the Honourable Lahore High Court in an authoritative pronouncement titled as CIR, Zone-I, RTO, Rawalpindi V. M/s. Al-Mehdi International reported as 2013 PTD 2125 in the following words:-
11. .... The way forward in this legal impasse is to harmonize and reconcile the Repealed Ordinance with the New Ordinance. In case of conflict, it is settled law that preference will be given to the New Ordinance It is now settled law that "an implied repeal of an earlier law can be inferred only where there is the enactment of a later law which had the power to override the earlier law and is totally inconsistent with the earlier law that is where the two laws-the earlier law and the later law-cannot stand together. This is a logical necessity because the two inconsistent laws cannot both be valid without contravening the principle of contradiction. The later laws abrogate ear liercontrary laws...."
The case-law relied on by learned counsel have already been discussed and distinguished by oUr learned brother Judicial Member in his order, therefore, need no further deliberation at our end. For the above reasons, particularly the interpretation by the Honourable Lahore High Court, we fully endorse the view adopted by learned Judicial Member and reply the questions referred in affirmative and the appeal of the registered person/appellant is rejected.
Sd/- NAZIR AHMAD (JUDICIAL MEMBER)