CH. SHAHID IQBAL DHILLON (JUDICIAL MEMBER).---This miscellaneous application in hand is preferred at the instance of the taxpayer for rectification of order S.T.A. No,109/LB/2011 dated 26.10.2015 whereby it has been contended by the applicant that during the proceedings before the Tribunal the department has mislead the Tribunal by concealing material facts and managed to obtain the order in question on the ground which are not relevant to the case. It has also been contended by the learned AR that the Order-in-Original and the Order in Appeal were based on the interpretation of Rule 12(5) of the Sales Tax Rules, 2006 but the present order dated 26.10.2015 has gone beyond the scope of show cause notice as well as the orders of both the A authorities below.
Moreover, Section 21(3) of the Sales Tax Act, 1990 has been applied on the present case giving retrospective effect of the said provision as the case pertains to the period July-2003 to March- 2006 and the said provision of Section 21(3) has been added by the Finance Act, 2011. The learned counsel further contends that the Tribunal being last fact finding and forum to decide the factual controversies may look into the vital factual aspects of the case which cannot be taken into consideration by honorable High Court. The Applicant/ registered person has prayed for amendment in the order dated 26.10.2015 by rectifying the mistake which is apparent from record.
2. We have heard the arguments of the learned AR and the learned DR as well and also perused the record. It appears from the record that the first appeal of the learned appellate authority decided the appeal in favour of the registered person on the ground that Rule 12(5) of the Sales Tax Rules, 2006 does not provide for effecting recovery at later stage from the person who has already received the refund if the supplier is subsequently blacklisted. The order in original was also passed by applying Rule 12(5) on the case of the registered person for recovery of the amount already refunded to them.
3. After having heard, we have observed that the learned CIR(Appeals) has allowed relief on the grounds on which the Tribunal has already resolved the matter in favour of the registered, person the appellant made purchases after obtaining proper invoices, payments were made through banking channel and necessary proof have also been furnished not only before the adjudicating officer but also before the learned CIR (Appeals). In such circumstances, the learned CIR (Appeals) has rightly allowed the input tax adjustment and the objection of the department was not legally justified. Thus a patent mistake is apparent on the face of record which needs rectification. For ready reference the relevant para of the order of the learned CIR (Appeals) is reproduced hereunder:-- "The issue involved in this appeal is that the appellant claimed refund against the invoices of blacklisted units namely Messrs Royal Traders, Messrs Al-Razia Textile Corporation, Messrs Farhan Trading Co., Messrs Bismillah Enterprises, Messrs Friends Traders and Messrs K.K. Traders. In a number of cases I have noticed that the issue involved is similar i,e, department's action to initiate recovery proceedings against the appellant, on account of refund issued to them on the ground that the supplier has been blacklisted by the department. After taking into consideration the various defences put up by the Department, as regards the procedure/mechanism provided in the Sales Tax for this purpose, I have found that the DR's are unable to point out any such mechanism.
Sometimes they rely upon Rule 12(5) of Sales Tax Rules, 2006 and sometimes they refer to section 36 of the Sales Tax Act, 1990. It will therefore, the apt to refer to these two provisions. First, Rule 12(5) is reproduced as under:-- "During the period of suspension of registration, the invoices issued by such person shall not be entertained for the purposes of sales tax refund or input tax credit, and once such person is blacklisted, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such blacklisting, shall be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person."
' Rule 12(5) provides that in case of a supplier who is blacklisted under Sub-Rule (2) of Rule 12 of SRO 555(1)/2006 dated 05.06.2006 the claim of refund of input tax credit by the registered person shall be rejected. What is very obvious is that the time for disallowing the input tax credit or refund claim is when the case of the registered person is being processed for refund. This Rule does not provide for effecting, recovery from the person who has received the refund at a later stage, if the supplier is blacklisted. In other words Rule 12 does not contain any recovery procedure of the tax refunded."
4. .Perusal of the above observations it has been observed that the learned CIR (Appeals) has rightly allowed in put tax adjustment vacated the ONO. In this view of the matter, our earlier order dated 26.10.2015 is recalled/rectified and the order passed by the learned CIR (Appeals) is upheld meaning thereby the appeal preferred by the department is rejected.
(CH. SHAHID IQBAL DHILLON) JUDICIAL MEMBER (MUHAMMAD RAZA BAQIR)
ACCOUNTANT MEMBER
5. MUHAMMAD RAZA BAQIR, (ACCOUNTANT MEMBER).---I have gone through the proposed order written by my learned brother, Judicial Member, and I respectfully disagree with his observations/ findings.
6. The applicant/registered person preferred present application for rectification/review of the order dated 26.10.2015 passed by this Tribunal in S.T.A. No, 109/LB/2011, through which main appeal was dismissed by this Tribunal in the following manner:-- "Rival parties have been heard and the case record examined. Department has caste doubts about genuineness of their suppliers and the supplies, if any, made by such suppliers. The registered person has piled to show any invoices at the time of hearing which contain complete, accurate and specific description and quantity of goods. It gives birth to doubts about transparency of the purchases. Learned AR was requested to produce any documentary or material evidences showing the physical transfer of goods or payments of the principle amount and sales tax involved through banking channels, but he regretted his inability to produce the same. He also could not produce any ledger or cash register or any other document or evidence showing payment to the supplies. We are of the view that the Department has very successfully established all charges against the appellant. It leaves no doubt in our mind that the whole supply chain was manipulated with mala fide intentions to claim benefits illegally and fraudulently. Value of sales tax invoices was also manipulated to avoid application of section 73 of the Sales Tax Act, 1990. Section 21(3) of the Sales Tax Act, 1990 specifically provides that once a person is blacklisted, the refund or import tax credit claimed against the invoices issued by such person whether prior or after such blacklisting shall be rejected."
In view of the above categorical finding given after conscious application of mind, there was no justification to give a different finding on the same facts and circumstances of the case as the applicant filed the present application on the same set of facts and law which had already been considered and dismissed by this Tribunal. The finding given in the draft order, in my considered view, is a "review" of earlier order referred supra which is not permissible in law.
7. Needless to say that section 57 of the Sales Tax Act, 1990 empowers this Tribunal to amend any order only to rectify any mistake apparent from the record. A bare reading of the text of the law shows that scope of rectification is restricted to mistakes which are floating on the surface of the grader and must not involve elaborate discussion, detailed probe or process of determination or re-determination. Hon'ble Supreme Court of Pakistan in the case reported as 1992 SCM R 687 held that a mistake which is sought to be rectified must be so obvious and apparent from record that it may immediately strike on the face of it.
8. In this case, main appeal was decided against the appellant after affording due opportunity of hearing to the parties and after carefully considering all facts and points of the case. In case any party feels aggrieved with the order of the Tribunal, it may prefer the course of action as provided under the relevant provisions of the law. This Tribunal is not legally competent to reverse its own orders for no apparent reason and to sit as an appellate or review body on its own decision by expanding the scope of rectification. The learned AR has failed to show any specific mistake floating on surface of the order. Since there is no cogent reason for rectification of the order, it appears to be an attempt to invoke the provisions of rectification for seeking the relief which was not extended by this Tribunal in its above mentioned order. The request of the applicant is beyond the scope of rectification as laid down by the superior courts in the afore cited judgment into the controversy are out of the scope of rectification.
9. In view of the forgoing, the undersigned does not agree with the esteemed opinion of the learned Judicial Member as recorded above and is inclined to dismiss the application under reference for rectification of 1 G the order dated 26.10.2015 of this Tribunal.
(MOHAMMAD RAZA BAQIR) ACCOUNTANT MEMBER
10. Since, a difference of opinion has arisen between the Members of this Bench, we, accordingly, refer the matter to the Hon'ble Chairperson for nomination of third Member to resolve the following proposed questions of law on the subject: - i. Whether in the facts and circumstances of the case, this Tribunal has power to "review" its own order on the same facts and circumstances which has already been considered and disposed of? ii. Whether the Tribunal can reverse its own order through rectification application especially when there is no apparent mistake in the order?
(MOHAMMAD RAZA BAQIR) ACCOUNTANT MEMBER (CH. SHAHID IQBAL DHILLON) JUDICIAL MEMBER Ch. Anwaar-ul-Haq (Judicial/Referee Member).
Azhar, Assistant for Applicant.
Ms. Bushra Fatima, D.R. For Respondent.
Date of hearing: 13th July, 2016. Date of order: 13th July, 2016.
11. CH. ANWAAR-UL-HAQ, (JUDICIAL MEMBER).---The matter has been entrusted to the undersigned by the Hon'ble Chairman for resolving the difference of opinion which has been arisen between the learned Members while deciding the titled case.
12. The following issues have been referred for adjudication:-- Whether in the facts and circumstances of the case, this Tribunal has power to "review" its own order on the same facts and circumstances which has already been considered and disposed of? ii. Whether the Tribunal can reverse its own order through rectification application especially when there is no apparent mistake in the order?
13. At the time of hearing before me, one Mr. Azhar, Assistant of Mr. Saood Nasrullah, Advocate, appeared and requested for adjournment on his behalf. Perusal of record reveals that originally during the course of hearing of main department appeal, a power of attorney was tendered by Messrs Zahid Jamil and Company, Chartered Accountants. However, on 22.10.2015 when hearing of main appeal was concluded, Mr. Ishaq Baryat, ITP, represented the registered person/respondent.
The present miscellaneous application was originally filed by Mr. Jameel Hussain Shah, ITP in terms of power of attorney in his favour. However perusal of proposed order in rectification application revealed that on 23.12.2015, hearing of the application was conducted by Mr. Saood Nasrullah, Advocate, however no power of attorney in his favour is available on record. The person who seek adjournment was allowed to inspect the file but neither he search out the power of attorney in favour of said learned Counsel nor was able to produce any evidence regarding filing of power of attorney in favour of his master. Accordingly, the request for adjournment is refused and the matter is decided on merit on the basis of available record in terms of subsection (2) of Section 132 of the Income Tax Ordinance, 2001.
14. Relevant facts of the case are that the departmental appeal was accepted by this Tribunal vide order dated 26.10.2015, as a consequence of which order passed by the CIR(A) was annulled and that of the assessing officer's was restored with following observations:- "Learned AR was requested to produce any documentary or material evidences showing the physical transfer of goods or payments of the principle amount and sales tax involved through bank channels, but he regretted his inability to produce the same. He also could not produce any ledger or cash register or any other document or evidence showing payment to the suppliers. We are of the view that the Department has very successfully established all charges against the appellant. It leaves no doubt in our mind that the whole supply chain was manipulated with mala fide. Intentions to claim benefits illegally and fraudulently." (emphasis added)
15. The registered person/applicant, filed an application under' section 57 of the Sales Tax Act, 1990, for rectification/review of the said order of this Tribunal precisely on the following grounds and prayer:- That AR requested adjournment during hearing for production of records of invoices which contains complete, accurate and specific description and quantity of goods along with proof of compliance of section 73 of the Sales Tax Act, 1990 but was turned down. The appeal of the department was accepted without supporting evidence just on assumed discussion of D.R.
Without considering views of appellant and providing ample opportunity of being heard, needs review in the light of documentary evidence.
' PRAYER ' In view of above submissions and facts, it is respectfully prayed: ' After providing proper opportunity of being heard, legal and factual grounds supported by documentary evidences discussed in judgment of Honourable ATIR, be re-adjudicated and fresh order please be passed (emphasis added)
16. In the proposed order, the learned Judicial Member accepted the stance of the applicant and recalled earlier order dated 26.10.2015 and consequently proposed to reject the departmental appeal. However, the learned Accountant Member was not in agreement of the viewpoint of the learned J.M. And of the view that section 57 of the Sales Tax Act, 1990, empowers this Tribunal to amend any order only to rectify any mistake apparent from the record which the registered person had failed to point out in this case.
17. I have carefully gone through the available record, heard the learned DR, examined the divergent views of my both the learned brothers and the referred points.
18. The present application was filed by the registered person for the rectification of order dated 26.10.2015 of this Tribunal passed in appeal of the revenue department. Under the law/rules, in such application/proposed order, the title of case have to be as "Department Versus registered person" instead of "registered person Versus Department". Although this mistake appeared in the present case has no bearing on the outcome of this order, however, the same should have been read correctly.
19. As per proposed rectification order of the learned J.M., it is the arguments of the learned AR that "during the proceedings before the Tribunal, the department has misled the Tribunal by concealing material facts and managed to obtain the order in question on the grounds which are not relevant to the case". Perusal of record reveals that the said serious allegation was not taken in the rectification application. Under Rule 13 of the Rules of this Tribunal, where a fact which cannot be borne by or is contrary to the record is alleged, it shall be stated clearly and concisely by a duly sworn affidavit, whereas, no such affidavit has been filed by the registered person or his then counsel. Even otherwise, present application has been filed by Mr. Jameel Hussain Shah, ITP, who was not present in the hearing of main appeal. Further, instead of the registered person, the contents of the rectification application have been sworn by the said ITP, who is not competent to do the same. So, the rectification application was also liable to be rejected on this sole ground.
20. Perusal of impugned order dated 26.10.2015, sought to be rectified also reveals that this Tribunal has given a categorical findings after application of conscious application of mind. The learned Accountant Member who is also author of the order sought to be reviewed, duly reproduce the relevant portion of the said decision in his present dissenting note. In the application for rectification and its prayer, the applicant categorically seek "review" of this Tribunal's order dated 26.10.2015 which is not ,permissible under the law. The applicant has to point out a glaring mistake which is floating on the surface of the order sought to be rectified. No such mistake has been pointed out by the learned AR and applicant cannot seek rectification on the basis of a 'difference of opinion' or 'different interpretation' of law. The Hon'ble Supreme Court of Pakistan clinched the matter in the judgment cited as 1992 PTD 570, observed as under:-- ' entering into controversy, investigation into the matter, reappraisal of the evidence or taking into consideration additional evidence and on that basis interpretations of the provisions of law and formation of an opinion different from the order will not amount to rectification of the order, any mistake which was not patent and obvious on the record could not be termed to be an order which could be corrected.............................................................
From the perusal of contents of rectification application and arguments of the learned AR. It seems that applicant's want 'review' of our earlier order which is beyond the scope of the provisions of section 57 of the Sales Tax Act, 1990. I, therefore, fully endorse and concur the viewpoint of my learned brother, Mr. Mohammad Raza Baqir, Accountant Member and also agree with his conclusion drawn in his dissenting note. Accordingly, both the issues/points mentioned supra stand answered in negative.
21. Resultantly, the rectification application filed by the applicant being devoid of any merit or substance is dismissed.