Qamar-ul-Haq Bhatti, Judicial Member.--Vide this sales tax appeal filed at the instance of the appellant-registered person calling in question the Order No, CIR (Zone-II)/RTO/Fsd/4690 passed by the learned Commissioner Inland Revenue, Faisalabad dated 28.04.2016.
2. Both the learned representatives appearing at the bar have been heard and the relevant available record perused.
3. Facts leading for disposal of the instant appeals are that after haying scrutinized the relevant available records, it was observed by the concerned authority that Mr. Naseer Ahmad, Mr. Imran Ahmad Brother), Mr. Khurram Mushtaq (Brother). Mr. Mushtaq Ahmad (Father,. Mst. Saddaf Farrukh (Faizan Marbles), Mr. Farukh Abbass arid Mr. Haroon Munir (Nabeel Marbles) are involved in same business i,e, M/s. Kohsar Marble & Tiles. As all the persons are involved in the same business and at the same premises, therefore, they are to be treated as running a single business under the name of M/s. Kohsar Marble & Tiles. They are running manufacturing facilities having turnover greater than five million rupees and running a sale point which has electricity consumption greater than Rs .6 Lacs per year, and are liable to be registered within the definition of "Registered person" as defined in Section 2(25) of the Sales Tax Act, 1990. This state of affan.-s proved that M/s. Kohsar Marbles & Tiles have violated the provisions of Section 14 read with Rules 6 of the Sales Tax Rules, 2006, notified vide SRO 555(1)/2006 dated 05 06.2006
4. On the basis of the above facts, the revenue authorities issued notice dated 26.04.2016 for compulsory registration to the appellants and in response thereto, the appellant/registered person tendered his written reply which could not satisfy the concerned authority and the learned Commissioner passed the order with the following observations "I have examined case records and written reply as submitted. by the taxpayer and come to the conclusion that respondent is liable to be registered on the basis of his taxable activity as defined u/S. 2(35) of the Sales Tax Act, 1990 and supplies exceeding the threshold and have deliberately violated the provision of Section 14 read with registration Rules as notified vide SRO 555(I)/2006, dated 05-06-2006 amended vide SRO 494(1)/2015 dated 30-06-2015 for evasion of due tax payment. Therefore, I order for compulsory registration of M/s. Kohsa.r Marble & Tiles, Shelkhupura Road, Faisalabad being manufacturer cancel Retailer as an AOP (Members of AOP as pointed out in Para 3 above) under single registration for sales tax purpose in terms of Rule 6 of the Sales Tax Rules. 2006. read with Section 14 of the Sales Tax Act, 1990. as all the business activities are being carried out under single roof This dispensation had compelled the appellant-registered person to file appeal before the learned Appellate Tribunal Inland Revenue on the following grounds.
(1)That as Mst. Saddaf Farrukh, Farrukh Munir inadvertently named as Mr. Farrukh Abbas and Mr Haroon Munir has left the business from Faisalabad since long and now they are conducting their business I-Islamabad as would be evident from income tax and sales tax record which has been produced as well as available with the authorities Therefore the inclusion of their names in the alleged AOP for compulsory Sales Tax Registration purpose is not only illegal but also mala fide. The inference drawn by the learned Commissioner Inland Revenue on this count is not only irrelevant but also against the principle of natural justice & fair play (2)That M/s. Super Kohsar Marble an AOP of Imran Ahmed has obtained NTN 0081092-4 for Income Tax Purpose and also applied to obtain STRN therefore it is entitled to separate STRN rather than alleged Registration granted to 7 persons as one unit. That M/s. Super Kohsar Marble is conducting its business at Hajiabad, Sheikhupura Road, Faisalabad having area of about 25 Marlas as an independent Unit for Income Tax & Sales Tax purpose as such cannot be granted compulsory Sales Tax Registration in which allegedly 7 persons having independent business premises at different areas of Faisalabad/Islamabad, have been included.
There is neither any finishing line nor any state of Art Machinery has been installed for cutting & finishing of Marble, however the unit has only 3 local cutters 25 years old (3)That as Mr. Naseer Ahmad Proprietor M/s. KTC Trading is conducting his business as of importer / Retailer of Tiles at P 57, Bilal Road, Faisalabad, he is registered at NTN. 1121586.7 for Income Tax purpose and holds STRN 2400112158612 therefore cannot be made as Member of the alleged AOP who has been granted compulsory Registration for Sales Tax as well as for Income Tax purpose (4)That Mr. Mushtay Ahmad Proprietor M/s Khurrani Tiles is conducting his business as Retailer at Hapabad Sheikhupura Road, FaisalabA He :s being assessed Tax at NTN 0950489.3 His declared Sales for Tax Year 2015 were just to the tune of Rs, 3,279,700/- as such cannot be made as Member in the alleged AOP which has been subjected to compulsory Registration by the Respondent.
(5)That Mr. Khurram Mushtaq is engaged in business of Manufacturing of Marbles as Faizan Marbles Factory and is conducting his business at Sanat Singh Road, Faisalabad. He is being assessed to Tax at NTN 2348649-0. He declared Sales for Tax Year 2015 at Rs, (3,870,984/-) as such cannot be made as Member in the alleged AOP which has been subjected to compulsory Registration by the Respondent.
(6)That the provisions of Rule 6 of Sales Tax Rules, 2006 read with Section 14 of the Sales Tax Act, 1990 has illegally been invoked by the Commissioner Inland Revenue, Zone-II, Faisalabad, as the alleged Members of the alleged AOP who has been granted compulsory Registration are located at different areas and are also Registered with Income Tax/Sales Tax.
(7)That in any case the compulsory Registration granted to , M/s. Kohsar Marble & Tiles is not sustainable in law as the learned Commissioner Inland Revenue has failed to apply his judicious & Independent mind in this case.
(8)That the learned Commissioner Inland Revenue has wrongly inferred that M/s. Kohsar Tiles NTN 00827622 has electricity consumption of more than Rs, 600,000/-.
5.On the other hand, the learned D.R. opposed the grounds narrated supra and strongly defended the order of the learned Commissioner Inland Revenue, Faisalabad for compulsory registration dated 28.04.206 with the findings recorded therein.
6.We have given anxious thought to the averments made by the rival parties as well as perused the relevant available records. After having gone through the relevant records, it was observed that the appellants are conducting business individually on different places with complete separate identifications. It is pertinent to mention here that this fact has also been confirmed through the taxpayer online verification dated 20.05.2016 in lieu of the copy submitted by the appellant during the Court proceedings. We have also observed that the members which were pointed out by the learned Commissioner in his order dated supra are also registered with income tax/sales tax as under-- Names NTN Number City i) Mr. Naseer Ahmed1121536-7 STRN2400112158612 Faisalabad ii) Mr. Mushtaq Ahmed0959489-3 Faisalabad iii) Imran Ahmad 0081092-4 Faisalabad vi) Khurram Mushtaq2348649-0 Faisalabad v) Haroon Munir 2459849-6 STRN 07-01-6802- 141-19Islamabad
7. In continuation, we have also noted that the remaining members i.e Mrs.Sadaf Farrukh, Mr. Farrukh Abbas/Farrukh Munir and Mr. Haroon Munir had left the business from Faisalabad since long. Also noted that Mrs. Saddaf Farrukh is not conducting her business since then however Mr. Farrukii Munir inadvertently written as Farrukh Abbas by the Commissioner Inland Revenue and Mr. Haroon Munir are conducting their business in Islamabad in the name of M/s. Kohsar Industries, Plot No: 204-205 1-9 Industrial Area, Islamabad having NTN 2459849-6 & Sales Tax Registration No, 07-016802-141-19.
8. During the Court proceedings, the learned A.R. of the appellant also pointed out that M/s. Super Kohsar Marble i AOP ) has obtained NTN 0081092-4' for Income Tax Purpose and also applied to obtain STRN therefore it is entitled to separate STRN rather than alleged Registration granted to 7 persons as one unit. Also contested that M/s. Super Kohsar Marble is conducting its business at Hajiahad. Sheikhupura Road, Faisalabad having are of about 25 Marlas is an independent Unit for Income Tax & Sale Tax purpose as such cannot be granted compulsory Sales Tax Registration in which allegedly 7 persons having independent business premises at different areas of Faisalabad / Islamabad. There is neither any finishing line nor any state of Art Machinery has been installed for cutting & finishing of Marble, however the unit has only 3 local cutters 25 years old. That as Mr. Naseer Ahmad Proprietor M/s. KTC Trading is conducting his business of Importer Retailer of Tiles at P 7 Rilal Road. Faisalabad, he is registered at NTN: 1121586-7 for purpose and holds TRN 2400112158612 therefore cannot be made as Member of the alleged AOP who has been granted compulsory Registration for Sales Tax as well as for Income Tax purpose. That Mr. Mushtaq Ahmad Proprietor M/s. Khurram Tiless is conducting his business as Retailer at H4jiabad Sheikhupura Road, Faisalabad. He is being assessed to Tax at NTN 0950489-3. His declared sales for Tax Y2: 2015 were just to the tune of Rs, 3,279,700/- as such cannot be made as Member in the alleged AOP which has been subjected to compulsory Registration by the Respondent.
9. We have given- due consideration to the aspects of the case in its entirety and noted that the learned Commissioner has mixed up the facts of different taxpayer-appellant and tries his best for compulsory registration of the appellant. It is also pertinent to mention here that the learned Commissioner Inland Revenue passed the order on 28.04.2016 for compulsory registration while the appellant namely Super Kohsar Marble had already applied for sales tax registration dated 18.04.2016 in the office of the Regional Tax Office, Faisalabad. According to the provisions of Rule 6 of Sales Tax Rules, 2006 read with Section 14 of the Sales Tax Act, 1990 has illegally been invoked by the Commissioner Inland Revenue, Zone-II, Faisalabad as the alleged Members of the alleged AOP who has been grant compulsory Registration are located at different areas and are also Registered with Income Tax/Sales Tax. In view of the facts and circumstances of the case facts the compulsory Registration granted to M/s. Kohsar Marble & Tile is not sustainable in law as the learned Commissioner Inland Revenue has failed to apply his judicious & Independent mind in this case specially, when every appellant has his independent office/business address, national address tax number, electricity connection and bank account.
10.The Honorable Supreme Court of Pakistan has time and again disapproved the passing of such perfunctory orders in the causes involving valuable rights of the parties. It is settled law that a quasi-judicial order must be a speaking order manifesting by itself that the authorities and Tribunal have applied its judicial mind to the issue and the points of controversy involved in the causes. It is pertinent to state here that when a statute requires anything to be done in a particular manner, it has to be done in that manner and if not done so the same is nullity in the eyes of law.
Accordingly, where basic action/order is without lawful authority, then superstructure built on it have to fall on the ground automatically. After having gone through the relevant record, aforementioned discussion as well as the annexed documents produced by the appellant, we are of the view that the contentions raised by the learned counsel for the registered person carry weight. Consequently, we feel no hesitation to vacate the impugned order No, CIR(Zone- II)/RTO/Fsd/4690 dated 28.04.2016 which had illegally been passed by the learned Commissioner Inland Revenue, Faisalabad. This would result into acceptance of the appellant/registered person's appeal.
11. Accordingly, the captioned appeal is disposed of to the manner as indicated above.