ORDER: (1). Through this Reference Application under Section 47 of the Sales Tax Act, 1990 ("the Act of 1990"), following questions of law, arising out of impugned order dated 03-06-2010, passed by learned Appellate Tribunal Inland Revenue, Lahore Bench, Lahore ("Appellate Tribunal"), have been pressed and argued for our opinion:--
1. "Whether the show cause notice was illegal merely because it was initiated by the Assistant Collector?
2. Whether the adjudication by a competent office fulfilling all the requirement of law and justice can be set at naught merely because the show cause notice had a lacuna?"
2. Brief facts of the case are that respondent taxpayer claimed refund of sales tax amounting to Rs.
4,473,902/- for the periods from October, 2003 to March, 2004. During processing of said claim, applicant department found different discrepancies and respondent taxpayer was served with a Show Cause Notice ("SCN") dated 10-05-2010, to explain as to why his claim may not be rejected, which culminated in passing of order-in-original dated 07-08-2008. Being aggrieved, respondent taxpayer filed appeal before Collector (Appeals), which was disposed of vide order dated 29-06- 2009. Feeling dissatisfied, applicant department preferred appeal before learned Appellate Tribunal, which was rejected vide order dated 03-06-2010. The applicant department has assailed the aforesaid order through instant Reference Application.
3. Learned counsel for applicant department submits that the adjudication by a competent office, fulfilling all the requirements of law, cannot be set at naught merely because the SCN had a lacuna. In the end, he submits that impugned order is not sustainable in the eye of law.
4. On the other hand, learned counsel for respondent defends the impugned order and submits that learned counsel for applicant department has failed to point out any illegality or legal infirmity in the impugned order, thus, the same is liable to be upheld in the facts and circumstances of the case.
5. Arguments heard. Record perused.
6. The operative part of impugned order is reproduced hereunder:-- "5. We have heard the learned counsel for both the parties and have gone through the relevant orders. Undoubtedly, the Order-in-Original in the present case has been made by the Assistant Collector who had no jurisdiction to entertain the case where the amount in question exceeded rupees one million. The learned D.R. could not rebut the assertions made by the learned AR.
6. In this view of the fact, we are constrained to observe that this being the legal position, we do not find any legal infirmity in the impugned order, which is hereby maintained. Departmental appeal stands rejected."
7. Learned counsel for applicant department was confronted with the underlined part of above order that the Assistant Collector, who passed the order-in-original, had no pecuniary jurisdiction within the contemplation of provisions of Section 45 of the Act, but he, after arguing the case at some length, could not convince us that the said order was within the jurisdiction of Assistant Collector.
8. Perusal of Section 45 of the Act shows that the adjudicating officer was competent to adjudicate the case within the pecuniary limit exceeding Rs. 10,000/- upto Rs. 1.00 Million prescribed for an Assistant Collector. The relevant part of Section 45 is reproduced hereunder:-- "45. Power of Adjudication.--(1). 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:-- (iii)Assistant CollectorCases falling under sub-section (2) of section 11 and section 36 provided that the amount of tax involved or the amount erroneously refunded exceeds ten thousand rupees, but does not exceed one million rupees.
9. The very assumption of jurisdiction by the Assistant Collector, in the instant matter, was against the said express provision of law. It is well settled that a forum cannot take cognizance of a matter beyond its pecuniary jurisdiction, prescribed in the relevant law. Inherent defect cannot be cured to defeat the provisions of statutes or enactments affecting the jurisdiction of a forum. It is inalienable right of every citizen to have protection of law and to be treated in accordance with law, in terms of Article 4 of the Constitution of the Islamic Republic of Pakistan, 1973. An order passed against a person by any forum against express provisions of law on the subject, if allowed to stay intact, would cause serious prejudice to legal right of citizens. Reference can be made to Izhar Alam Farooqi, Advocate vs. Sheikh Abdul Sattar Lasi qnd others (2008 SCM R 240), Mst. Fateh Bevi and others vs. Additional District Judge, Khushab and others (2008 SCM R 1262), Muhammad Anwar and others vs. Mst. Ilys Begum and others (PLD 2013 SC 255) and OMV Energy vs. Ocean Pakistan and others (2015 CLC 1504).
10. Needless to observe that objection qua jurisdiction is a basic lacuna on assumption of jurisdiction, which can be raised at any stage of proceedings including the appeal inasmuch as it goes to the very roots of the matter and renders entire proceedings coram non judice. When a forum/Court suffers from want of inherent jurisdiction, no act of consent or acquiescence in the proceedings can vest such forum/Court with such jurisdiction. No question of waiver or estoppel is attracted in such circumstances. Notwithstanding, non-raising of such an objection by the parties, the forum taking cognizance of the matter must have the first instance to decide the question of its jurisdiction at the commencement of proceedings. There can be no exception to the principle that order passed or an act done by a Court or a Tribunal, incompetent to entertain proceedings, is without jurisdiction. Jurisdictional defect could not be removed by mere conclusion of proceedings and passing of order-in-original and order-in-appeal. It is well settled principle of law that when a law required an act to be done in a particular manner, it had to be done in that manner alone, not otherwise. Reference in this regard can be made to Muhammad Hussain and another vs. Muhammad Shafi and others (2004 SCM R 1947) and Munawar Hussain and 2 others vs. Sultan Ahmad (2005 SCM R 1388).
11.In view of the above, our answer to the proposed questions is against applicant department and in favour of respondent taxpayer.
This Reference Application is decided against the applicant department.
12.Office shall send a copy of this order under seal of the Court to learned Appellate Tribunal as per Section 47(5) of the Sales Tax Act, 1990.