1. SHAHID MASOOD MANZAR, JUDICIAL MEMBER--This appeal has been filed by a Tax-payer engaged in the manufacturing and sales and steel billets against the Order in-Appeal No, 518, dated 07.06.2016 passed by the learned C.I.R. (Appeals), Peshawar in respect of Tax Year 2015, whereby he has confirmed the order passed by the learned Additional Commissioner u/s. 113 of the Income Tax Ordinance, 2001, dated 31.03.2016 levying minimum tax @ 1% instead of 0.2% treating the steel billets as "fast moving consumer goods" under Cl. (8) of Pt. III of the 2nd Schedule to the Income Tax Ordinance, 2001 by invoking the provisions of Section 122(5A) of the Income Tax Ordinance, 2001.
2. The Appellant/Tax-payer has assailed the above-said Order-in-Appeal on the following grounds:--
(1) That the impugned order of the CIR Appeals Peshawar dated 07.06.2016 as well as ACIR, are illegal, unjustified, misinterpreted and volatile thus liable to be deleted/vacated/annulled.
(2) That the CIR Appeal was not justified to confirm the disallowance of 80% reduction in the minimum tax u/s. 113 of the Income Tax Ordinance, 2001 passed by the ACIR.
(3) That the CIR Appeals Peshawar was not justified to confirm the order of ACIR on both main grounds merely on the ground of surmise.
(4) That the CIR was not justified to confirm the order for the tax year 2015 whereas for the tax years 2012 & 2014 were passed in the favour of the appellant. This action of the CIR Appeal Peshawar is contrary, illegal, unjustified.
(5) That the provisions of the FAST MOVING CONSUMER GOODS has not been removed/finished/deleted from the Act. Now the same are part of the 1st Schedule of the Income Tax Ordinance, 2001, which are applicable in our case. Reliance on in case of M/s. Chenab Steel Re-Rolling Mills Lahore vide ITA No, 1205/LB/2014.
3. The Appellant/Tax-payer's learned A.R. has advanced arguments in support of the above- reproduced grounds of appeal, and on the other hand, none represented the Department.
4. Having heard the arguments advanced by the learned counsel for the taxpayer and perused the impugned orders of the officers below, relevant available record and the case-law referred, we do not find ourselves in agreement with the learned C.I.R. (A) on the issue of taxability of steel billets @ 1% for the reasons that the Division Bench of this Tribunal had very ably dilated upon the issue of chargeability of minimum tax u/s. 113 of the Income Tax Ordinance, 2001 vide Order dated 10.06.2014 in I.T.A. Nos, 1203 to 1205/LB/2014 in the case of Chenab Steel Re-rolling Mills, Lahore, and had held as under in unequivocal terms:-- "As the fm.c.gs. have been included in the said clause (8) by way of residuary goods, any goods/products qualifying the above-reproduced criteria may be considered as f.m.c.gs, and they are eligible for 80% reduction thereunder.
2. When the steel re-rolling products are viewed in the perspective of the above characteristics, they do fall within the definition of fm.c.gs."
3. The above-findings of this Tribunal's learned D.B. have not been upset by any higher forum till date, hence, they are holding the field so far.
4. On the other hand, we have found that the learned C.I.R.(A) has followed the ratio of another Order by another learned D.B. of this Tribunal in I.T.A. Nos, 1866 and 1867/LB/14, dated 06.01.2015, wherein it has been held:-- "7. So far as the contention of the learned AR that steel products are covered under "fast moving consumer goods we are not fortified with this contention and the reliance placed by the learned AR in this regard cannot be accepted. In our view, in the case relied upon by the learned AR law has not been properly dilated upon." It is trite law that the law laid down by an earlier D.B. of a Court of Tribunal on a given issue is binding on a subsequent D.B. If the subsequent D.B. of this Tribunal is not agreed to the earlier pronouncement of law by the Bench of equal strength, it cannot itself depart from the earlier judgment. It may refer the matter to the learned Chairman of this Tribunal stating the reasons of dissent, who may from a larger Bench for resolving the controversy through a speaking order. This statement of law by us is based on the verdict of the Hon'ble Supreme Court of Pakistan in the case reported in PLD 1995 SC 423, relevant extract whereof is reproduced hereunder:-- "17 .........There is no dispute about the fact that in the impugned judgment a contrary view has been taken and if it was found to be necessary to do so, then proper course would have been requested to be made to the learned Chief Justice for constitution of a larger Bench instead of giving conflicting finding; which is bound to create confusion.". (at p. 434)
5. "18. In such circumstances. legal position which emerges is that the second Division Bench of the High Court should not have given finding contrary to the findings of the 1st Division Bench of the same Cowl on the same point and should have adopted the correct method by making a request for constitution of a larger Bench, if a contrary view had to be taken. In support reference can be made to the cases of the Province of East Pakistan v. Dr. Aziz-ul-Islam (PLD '00 SC 296) and Sindheswar' Ganguly v. State of West Bengal (PLD 1958 SC (Ind) 337), which is a case of Indian jurisdiction. We, therefore, hold that the earlier judgment of equal Bench in the High Court on the same point is binding upon the second Bench and if a contrary view had to be taken then request for constitution of a larger Bench should have been made." (at p.435)
6. In view of the above stated legal position, the dissent made by the subsequent learned D.B. of this Tribunal in I.T.A. Nos, 1866 and 1867/LB/14, dated 06.01.2015 from the views expressed by an' earlier D.B. of this Tribunal in I.T.A. Nos, 1203 to 1205/L8/2014, dated 10.06.2014 is without lawful authority, hence, illegal and the decision made by dissenting the earlier decision of this Tribunal is per incuriam, hence, should not be followed as a precedent by the learned C.I.R.(A).
7. In this regard, we may refer the decision of the Hon'ble Supreme Court whereby the Hon'ble apex Court has dilated on the effect of per incuriam judgment in PLD 2015 SC 166, and has held as under relying on the PLD 2009 SC 879:-- "(38) What is mean[t] by giving a decision per incuriam is giving a decision when a case or a statute has not been brought to the attention of the Court and they have given the decision in ignorance or forgetfulness of the existence of that case or that statute or forgetfulness of some inconsistent statutory provision or of some authority binding on the Court, so that in such cases some part of the decision or some step in the reasoning on which it was based was on that account demonstrably wrong, so that in such-like cases, some part of the decision, or some step in the reasoning on which it is based, is found, on that account to be demonstrably wrong. See Nirmal Jeet Kaur's case (2004 SCC 558 at 565 para 21), Cassell and Co. Ltd.'s case (LR 1972 AC 1027 at 1107, 1113, 1131), Watson's case (AELR 1947 (2) 193 at 196), Morelle Ltd's case (LR 1955 QB 379 at 380), Elmer Ltd's case (Weekly law Reports 1988 (3) 867 at 875 and 878, Bristol Aeroplane Co.'s case (AELR 1944
(2) 293 at page 294) and Morelle Ltd's case (AELR 1955 (1) 708).
(39) The ratio of aforesaid judgments is that once the Court has come to the conclusion the judgment was delivered per-incurium then Court is not bound to follow such decision on the well principle that the judgment itself is without jurisdiction and per-incurium, therefore, it deserves to be over-ruled at the earliest opportunity..."
8. The following principle is well-established and has recently been reiterated by this Court in the case of Re: Pensionary Benefits of the "Judges of Superior Courts (PLD 2013 SC 829)."
9. This verdict of the Hon'ble Supreme. Court lends support to our view that the following observation of this Tribunal in order in I.T.A. Nos, 1866 and 1867/LB/2014, dated 06.01.2015:-- "7. So far as the contention of the learned AR that steel products are covered under "fast moving consumer goods", we are not fortified with this contention and the reliance placed by the learned AR in this regard cannot be accepted. In our view, in the case relied upon by the learned AR law has not been properly dilated upon." is per incurium, hence, we ignore the same as no reason for the above comments has been given nor the issue under consideration has been dilated upon in the above-referred order of this Tribunal.
5. In this respect, another order of the Tribunal has been referred wherein it has been held that a "manufacturer" falls within the definition of "distributor" as explained hereunder by the learned D.B. in I.T.A. Nos, 1203 to 2015/LB/2014, dated 10.06.2014. The relevant para is reproduced hereunder: -- "7. The word 'distributor' has neither been defined in the definition clauses contained in Section 2 of the Income Tax Ordinance, 2001, nor the said Clause (8) defines the same. We will, therefore, have to resort to the meanings of the word 'distributor' in the Legal Dictionaries."
10. Black's Law Dictionary, 8th Edition defines the word 'distributor' as under:-- "A wholesaler, jobber, or other manufacturer or supplier that rolls chiefly to retailers and commercial users." (at p. 509)
11. As the word 'distributor' takes within its fold manufacturer also, the learned C.I.R. (A) grossly erred in giving restricted meaning to this word and excluding this Appellant/Tax-payer from its enclave, as he is a manufacturer of steel re-rolling products.". (at pp. 5 and 6) In the above-referred order, it is held that the "steel billets" are the "fast moving consumer goods" (f.m.c.gs.) for the following reasons:-- "10. The expression 'fast moving consumer goods' is not defined in the Income Tax Ordinance, 2001 hence, we lay hands to its definitions relied upon by the learned A.R., and not rebutted by the learned D.R., which are as under:-- Learned counsel for the appellant has contended that according to the "Dictionary of Commerce" by Naveen Chand Jain, "Fast moving consumer goods" mean "products with high levels of sales which are sold within a short period of time".
12. According to the "Product Management in India" by Ramanuj Majumdar (ISBN 978-81-203-1252-4), the following are the main characteristics of FMCGs:-- ? From the consumers' perspective:--
(i) Frequent purchase;
(ii) Low involvement (little or no effort to choose the item---products with strong brand loyalty are exceptions to this rule); and
(iii) Low price. ? From the marketers' angle:--
(i) High volumes;
(ii) Low contribution margins;
(iii) Extensive distribution networks; and
(iv) High stock turn-over.
13. As the f.m.c.gs have been included in the said clause (8) by way of residuary goods, any goods/products qualifying the above-reproduced criteria may be considered as f.m.c.gs, and they are eligible for 80% reduction thereunder. (at pp. 6 and 7)
14. In view of the above facts and case-law referred as we have held that the "steel billets" manufactured by this Appellant/Tax-payer are covered by the definition of "fast moving consumer goods" given at Serial No, 2(a) of Division of IX of Part I of the 1st Schedule to the Income Tax Ordinance, 2001, we set at naught the Orders of the authorities below, and uphold levy/payment of minimum tax @ 0.2% u/s. 113 of the Income Tax Ordinance, 2001 on the sales of "steel billets" as "f.m.c.gs.".
15. As the main controversy has been set at rest, and the relief due to the Appellant/Tax-payer has been allowed, we refrain from academic discussion on the other issues urged before us relating to the assumption of powers by the learned Additional Commissioner u/s. 122(5a) of the Income Tax Ordinance, 2001.
16. For the reasons recorded above, this appeal is allowed with the result that the order passed by the learned Additional Commissioner u/s. 113 of the Income Tax Ordinance, 2001, and upheld by the learned C.I.R.(A) vide Order-in-Appeal No, 518, dated 07.06.2016 is annulled.
17. The appeal is allowed to the extent and manner above-referred.