(1). The titled appeal has been filed by the appellant/ registered person against Order bearing C.
No, 547/2014 dated 11-12-2014 passed by the learned CIR(Zone-I), Faisalabad whereby he while exercising powers of revisional jurisdiction conferred upon him under section 45A(4) of the Act re- opened the Order-in-Original No, 55/2013 dated 10-11-2013 passed by the learned DCIR (E&C Unit-2, Zone-I), Faisalabad which was decided in favour of appellant in earlier round of litigation.
2. Succinct facts leading to the instant case are that the appellant is registered under the Sales Tax Act, 1990 running its business as a manufacturer-cum-exporter engaged in making of zero- rated supplies of textiles and textile articles thereof. During scrutiny of sales tax returns for the periods from July-2011 to February-2013, the tax functionaries observed that appellant has shown zero-rated supplies of textile goods to different registered persons but cross matching of his sales tax returns with that of data of his buyers has revealed various discrepancies in zero-rated supplies made during the periods under reference. Based on the said omission/irregularities, adjudication proceedings were initiated by the taxation officer by way of issuance of show cause notice C. No, 2999 dated 17-06-2013 for recovery of purportedly evaded amount of output tax under section 11(3) of the Act against which explanation tendered by the registered person was found satisfactory and resultantly, adjudication proceedings were culminated in passing of an order dated 10-11-2013 in favour of the appellant.
3. All of sudden on 11-12-2014, the learned CIR(Zone-I) by way of impugned order issued under section 45A(4) of the Act proceeded to reopen the said adjudication order and directed the learned DCIR (E&C Unit-3, Zone-I) to pass a fresh speaking order by incorporating all the aspects/facts of the case in accordance with the provisions of law after affording the proper opportunity of being heard.
4. Learned counsel of appellant while opening his arguments, has vehemently contested that the learned Commissioner has erred in understanding the law and impugned re-opening order dated 11-12-2014 passed by him is not in accordance with the provisions contained in section 45A(4) of the Sales Tax Act, 1990 by simply stating therein that the adjudication order dated 10-11-2013 is found unsatisfactory. Learned counsel further forcefully contented that the learned Commissioner has failed to record and show as to what illegality and impropriety was found in the adjudication order whereas he should have first adjudged illegality and impropriety of the decision/order passed by his subordinate officer and after satisfying himself, learned Commissioner was legally competent to re-open the case. To support his contention, case laws reported as (2014 PTD 1256) and (2007 PTD (Trib.) 2295) was referred to by the learned counsel for the appellant in which in identical circumstances, the orders passed under section 45A of the Sales Tax Act, 1990 and under section 195 of the Customs Act, 1969 were declared to be void ab initio, illegal and without jurisdiction. At the end, learned counsel while summing up his arguments assailed that the learned Commissioner was legally required to pass a fresh order by himself under section 45A(4) of the Act and he can not delegate his powers to any subordinate officer for the purpose of recording a fresh order after re-opening of an earlier order and there is no authority or provision for remanding the case to sub-ordinate officer as under the provisions of section 45A(4) of the Act, the Commissioner can pass such order as he may deem fit. To strengthen his arguments, learned counsel placed reliance on (1997 SCM R 641) and (2014 PTD 1256). On the other hand, when the learned DR was confronted with the situation cited supra, in counter arguments, he has opposed the contentions of learned counsel for the appellant and supported the order of the learned CIR for the reasons recorded therein and simply re-endorsing the basis evolved therein that the Commissioner has ample powers to look into the matter and after examining the record, he may re-open any order under section 45A(4) of the Act, passed by his subordinate officer and nothing newel, has been put forth by him.
5.The arguments of the learned representatives of both the rival parties have been heard, the order of the learned CIR as well as relevant record and relevant provisions of law and the case laws cited by the learned AR of the taxpayer have also been perused carefully.
6. There is no doubt that in the instant case, the appellant is aggrieved by the act of the learned CIR(Zone-I) whereby the order-in-original No, 55/2013 dated 10-11-2013 has been re-opened under section 45A of the Act and its remand to a subordinate officer for adjudication afresh. To resolve the controversy, a perusal of sub-section (4) of section 45A of the Act is of paramount consideration which for convenience of reference is reproduced herein below:-- "(4).--The Commissioner may, suo moto, call for and examine the record of any proceeding under this Act or the rules made thereunder for the purpose of satisfying himself as to the legality or propriety of any decision or order passed by an Officer of Inland Revenue subordinate to him, and pass such order as he may deem fit."
By bare reading of above provisions of law, it is crystal clear and obvious that the Commissioner has no doubt ample powers to call for and examine the record and to pass an order as he may deem fit but for that purpose, the Commissioner is legally bound to first adjudge and record an illegality or impropriety of the decision/order made by any officer subordinate to him. This is, in fact, the first pre-condition, which must be present and fulfilled. However, in the instant case, the impression from the impugned order appears that the learned Commissioner had reopened the case in order to adjudge its illegality and impropriety which is against the very spirit of the provisions contained in section 45A(4) of the Sales Tax Act, 1990 as no illegality or impropriety has been recorded and shown to us that as to what circumstances prevailed upon the Commissioner to exercise powers under section 45A(4) of the Act for re-opening the adjudication order.
Therefore, in our view, the first condition has not been met and fulfilled which could justify the exercise of powers under section 45A of the Act for reopening of the adjudication order thus, we hold that adjudging an illegality and impropriety in the order passed by a subordinate officer is a mandatory condition while exercising powers of re-opening by the Commissioner under section 45A(4) of the Act. The Hon'ble Supreme Court of Pakistan has time and again held that that if the law has prescribed method for doing of a thing in a particular manner, such provision of law is to be followed in letter and spirit and achieving or attaining the objective of performing or doing of a thing in a manner other than provided by law would not be be permitted. Reliance in this respect is placed upon "Meharl' Sultan Jung vs. Qurban Hussain" (1972 SCM R 73), "Yusuf Ali Khan vs. State" (PLD 1977 SC 482) and "Khalid Saeed vs. Shamim Rizvan and others" (2003 SCM R 1505).
7. In order to understand the true application of the provisions of section 45A of the Sales Tax Act, 1990 to reopen the proceedings where such proceedings suffer from illegality and impropriety, reference is made to the Black's Law Dictionary in respect of the word "illegal" which means unlawful in and of itself and not because of some extraneous circumstances e.g. a contract to assassinate a public official. On the other hand, word "improper" has been defined as not suitable, unfit, and not suited to the character, time and place. Not in accordance with fact, truth, or right procedure and not in accord with propriety, modesty, good taste, or good manners. These two terms, therefore, have nexus with the abuse of power by the subordinate officers and otherwise, the ethical moorings of a civil society, in relation to the relevant law. The revisional powers conferred under section 45A(4) of the Act do authorize the Commissioner to examine issues falling within the scope of the terms "legality" and "propriety" but without adjudging any illegality and impropriety in the decision of his sub-ordinate officer, the whole exercise of learned CIR for re-opening the adjudication order is declared to be illegal, void and without jurisdiction. While confronted with such factual and legal position, the learned DR appearing on behalf of revenue department has candidly conceded to the legal position as stated hereinabove. Reliance in this regard can safely be placed on the judgment of Division Bench of Hon'ble Sindh High Court in case of "Messrs Paramount International (Pvt) Ltd, Karachi vs. Pakistan through Secretary Revenue Division and 2 others" reported as (2014 PTD 1256) which contains elaborate and comprehensive discussion on the issue of revisional jurisdiction. The rule enunciated in the said judgment is as under:-- "From the perusal of above, it transpires that, firstly, the order which is being re-opened should be such, in which there is any illegality and impropriety, for which the order is required to be re- opened by the Collector. This is, in fact, the first pre-condition, which must be present and fulfilled.
However, in the instant matter, while passing the order for re-opening, nothing has been recorded or shown to us that as to what circumstances prevailed upon the Collector, to exercise this power under section 195 of the Act for reopening the 1st ONO. Therefore, in our view, the first condition has not been met or fulfilled which could justify the exercise of powers under section 195 of the Act for re-opening the 1st ONO."
8. Now coming up to the second condition which is more important, is that as to whether the Commissioner is required to pass the fresh order by himself under section 45A(4) of the Act or has the authority to delegate and/or remand the case to any subordinate officer. In our considered view, this again does not seem to be a correct application of mind by the Commissioner as in terms of section 45A of the Act, there is no authority or provision empowering him to delegate his powers to a sub-ordinate officer as under sub-section (4) of section 45A the Act, it is the Commissioner who can pass a necessary order as deem fit by himself and not by his sub-ordinate officer as also held by the Hon'ble Sindh High Court in ref: "Messrs Paramount International (Pvt) Ltd, Karachi vs. Pakistan through Secretary Revenue Division and 2 others" (2014 PTD 1256). This is a legal obligation imposed on the Commissioner by the law itself. If legislature imposes a personal obligation on an authority then the same authority is required to discharge that legal obligation.
The obligation cannot be passed on to anybody else. It is now well-settled law that where an authority has been conferred upon a particular person/officer, it has to be exercised by him alone and cannot be further delegated; this principle has the nexus with the maxim "delegatus non- potest delegare". The Hon'ble Supreme Court of Pakistan in such like situation in case of "Messrs Gadoon Textile Mills and 814 others vs. WAPDA and others" reported as (1997 SCM R 641) has held that where a statute directs that certain acts shall be done by a specified person; his performance by any other person is prohibited. It has also been held by the Supreme Court of Pakistan that any authority vested with the power or discretion is duty bound to exercise the same by himself by applying his independent judicial mind not influenced by extraneous consideration. He should neither accept any dictation nor delegate his authority to any other person. Violation of these rules; will render the decision illegal and ab initio void. Needless to say that this order of Supreme Court of Pakistan is binding under Article 189 of the Constitution of Islamic Republic of Pakistan, 1973 and any contrary judgment of any authority including this Appellate Tribunal will have no binding force.
In this case, it is impliedly admitted by the department that at no stage of proceedings, the Commissioner applied his independent judicial mind and consideration to adjudge that original adjudication order is illegal, erroneous and prejudicial to the interest of revenue or likely to cause such a prejudice as the same was passed after proving genuineness of the alleged transactions and upon production of record by the appellant.
9. Notwithstanding above, if provisions of section 45A of the Act are perused, the above view and the interpretation arrived at by us, is further justified because under section 46 of the Act, an appeal has been provided before the Appellate Tribunal against an order passed by the Board or the Commissioner Inland Revenue under section 45A of the Act. This clearly shows that if an order is re-opened under section 45A of the Act, then, it is the Commissioner who has to pass the order by himself after re-opening which could further be assailed before the Appellate Tribunal. What has happened in the instant case is that the Commissioner after re-opening of the case, has sent it back to the Deputy Commissioner whose order is not an order within the contemplation of section 45A of the Act and is therefore not appealable as such before the Appellate Tribunal rather it has to be appealed before the CIR(A) under section 45B of the Act.
10.We are of the firm opinion that since basic order of re-opening passed by the learned Commissioner under section 45A(4) of the Act is illegal and unlawful therefore, any subsequent proceeding and superstructure based on such illegal or void order has no legs to stand and has to fall on the ground automatically alongwith the order on which it is based. In this regard, we are supported by the judgments of Hon'ble Supreme Court of Pakistan in ref: "Muhammad Tariq Khan vs. Khawaja Muhammad Jawad Asami and others" (2007 SCM R 818), "Moulana Atta-ur-Rehman vs. Al-Hajj Sardar Umar Farooq and others" (PLD 2008 SC 663)and "Rehmatullah and other vs. Saleh Khan and others" (2007 SCM R 729) wherein it has been laid down that when the basic order is void ab initio and without lawful authority, then the entire superstructure raised thereon falls to the ground automatically.
11. In view of what has been discussed hereinabove, particularly in the light of law and judgments quoted supra, the outcome is obvious that the impugned order, in case of the present appellant, passed by the learned CIR(Zone-I), being suffering from grave legal infirmities and substantive illegalities tantamount to utter violation of mandatory statutory provisions is declared to be illegal, ab initio void and thus hereby set-aside.
12. The instant appeal filed by the registered person is accepted in the manners as indicated above.