Through this order, we intend to dispose off Rectification Application filed under section 46 of the Sales Tax Act, 1990 (hereinafter to be referred as Act) and Section 194-B(2) of the Customs Act, 1969 and Section 221 of the Income Tax Ordinance 2001 against the order of the Tribunal dated 19.06.2014 and Sales Tax Appeal No.678/K 2009 against Order-in-Appeal No 393/07 dated 12.06.2007 maintaining the order passed by respondent, upholding the Order-in-Original No.238/06 dated 02.12.2006 passed by Assistant Collector, Refund Group-VIII, Collectorate of Sales Tax (Enforcement), Karachi.
2. The appellant was represented by Mr. Nadeem Ahmad Mirza, Advocate and respondent department was represented by Mr. Riaz Ali Shah, Additional Commissioner Inland Revenue.
3. Brief, facts of the case as stated in the impugned order are that the appellant is a commercial exporter and registered with the Sales Tax Department. He exports same state goods after procuring from the stockiest/suppliers or manufacturers. In the month of March 2002 he exported 09 consignments of Polyester Made Ups and Leather Jackets/ Made Ups after procuring those M/s. Sumaira Exports and Anmol Exports. Lahore against 18 Sales Tax Invoices, as detailed in Annexure "H" to the appeal, issued by the suppliers as per the section 23 of the Sales Tax Act, 1990 and filed monthly Sales Tax Return cum payment challan within the stipulated period as enunciated in Section 26 of the Sales Tax Act, 1990 for the month of March 2002 through which claimed zero rating under Section 4 and claimed refund for the suffered amount of taxes on the purchases as per Section 10 (2) of the Act, 1990 for Rs.4,952,683.00 prescribed in Rule 9 of the Sales Tax Refund Rules, 2000 (here-in-after to be referred as Rules) submitted supportive documents inclusive of copies of cheques and bank statement for the confirmation of payment of the invoiced amount as per mandated requirement of Section 73 on 18.09.2002. Since, the refund was not sanctioned within 30 days from the date of submission of supportive documents in terms of Rule 7, appellant sought audience with the Assistant Collector concerned and the Collector of Sales Tax (Enforcement) for settlement /sanction, but of no avail, resulting to which appellant decided to windup his business and proceeded to USA while directing his consultant to file application for de-registration, which he did on 08.12.2003 with the Collector of Sales Tax with the specific intimation that appellant is not available at his registered address and future correspondence in regards to his pending refund should be directed to his lawyer/consultant address. Appellant further instructed his consultant to file complaint with the Hon'ble FTO, which was filed vide C-897-K/04, on which recommendation dated 12.04.2005 was issued. Being aggrieved the Collector of Sales Tax Enforcement filed representation with the President of Pakistan, who set aside the finding vide order dated 26.05.2006 and directed the appropriate officer of the department to decide the refund application by a formal order after providing opportunity of being hearing on priority basis so that the appellant may pursue remedy against the order, if felt dissatisfied. Consequent to which the Deputy Collector, Refund Group-VIII issued show-cause notice to the appellant with the allegation that he committed tax fraud within the meaning of definition given in Section 2(37) of the Act, 1990, as evident from the fact that the furnished sales tax return of the suppliers upon verification are found to be not available with the Collectorate of Sales Tax and Central Excise , Lahore and even National Bank of Pakistan, Model Town Branch, Lahore and why their refund should not be rejected under Section 10 of Act, 1990 read with Refund Rules, 2002 and why penal action under Section 33(4) (a), (b), (c) and (f) of the Act, 1990 may not be initiated against him for committing an act as defined under Section 2(37) (but not served within the meaning of Section 56 of the Act). Upon receipt of no reply to the show-cause notice he passed order dated 07.12.2006, paras 5 and 6 of the order is relevant, which is as under: "5. From the fact narrated above, there is strong reason to believe that M/s. Mayfair Impex, showing it purchases are fake as the suppliers vide Sales Tax Return have shown no business activity in the relevant tax period. The refund claimant tried to hood-wing the department by providing fake sales tax return of supplier, which were not verified by the concerned Collectorate as well as National Bank of Pakistan. Thus M/s. Mayfair Impex, committed tax fraud under Section 2(37) of the Sales Tax Act, 1990. The non-appearance on the date of hearing and non-submission of the reply of show-cause notice also strengthened the allegation of show-cause notice which stands established without out any shadow of doubt."
"6. Keeping in view the position explained above I have no option but to reject the amount of Rs.4,952,683/- claimed by M/s. Mayfair Impex, against fake and flying invoices and also order for imposing one hundred percent penalty of the amount of tax involved Rs.4,952,683/- under sections (3 and 4) a, b, c, f of the Sales Tax Act, 1990 for committing an Act as defined under Section 2(37) ibid. They may also be proceeded against in terms of Section 37 of the Sales Tax Act, 1990 after thorough investigation of their claims."
4. The order was challenged through an appeal before the respondent under the provision of Section 45-B of the Act, who rejected that vide order dated 12.06.2007, operative para 6 is relevant and is reproduced here-in below: "6. I have examined the case record and given due consideration to the arguments made before me. It needs to be stated that refund is nothing but re-imbursement, to the exporter, of an amount received as Sales Tax by the Government on the goods which are consumed in export production.
Obviously, re-imbursement can take place only in a situation in which the amount claimed as refund is established to have been received by the Government in the first place from person who supplied goods to the exporter otherwise any claim of refund would not be lawful. In the instant case there is clear evidence on record to the effect that the amount claimed by the appellants as refund has not been paid to the Government; not only the appellants supplier did not file sales tax return but also appellant presented forged evidence of payment of Sales Tax to create an impression that their suppliers has discharged their tax liabilities. Moreover, there is no evidence to the effect that the appellants actually purchased any goods from their so-called supplier. Thus, it is clear that neither the appellant purchased any goods from the suppliers not the so-called suppliers paid any amount as sales tax to the Government. Therefore, the question of any refund does not arise in this case. Under the circumstances, I do not consider it necessary to take into account the law point raised by the learned Counsel; law has to be used to serve the end of justice and not to perpetuate unlawful activities. I accordingly, conclude that the arguments advanced by the learned Counsel and the precedents quoted by him are irrelevant and untenable. Consequently, I find the appeal absolutely devoid of merit and reject the same."
5. The appellant has challenged the order of the forum below through Mr. Nadeem Ahmed Mirza, Advocate on behalf of the appellant reiterated the arguments incorporated the in memo. of the appeal and emphasized that:
(i) The show-cause notice was prepared and issued but was not dispatched to the appellant.
Resultant, it is not served in terms of Section 56 of the Sales Tax Act, 1990, confirming that the show cause was never issued to the appellant rendering the whole proceeding ab initio, void. Reliance is placed on reported judgments 2006 PTD 978 and 2008 PTD 1968.
(ii) The show-cause notice and order-in-original were issued and passed in excess of jurisdiction by the authority issuing and passing the orders. For rejection of claim of refund of sales tax show- cause notice has to be issued under Subsection (2) of section 11 of Sales Tax Act, 1990 by the competent authority empowered under Section 45 ibid. The refund amount of appellant in the subject case is Rs.4,952,683.00 which fall under the powers of Additional Collector. Contrary, the Deputy Collector issued the show-cause notice and passed order rendering it ab-initio and void.
Reliance is placed on PLD 1971 SC 184, PLD 1976 Supreme Court 514, 1992 ALD 449, PLD 2001 SC 514.
Sales Tax Appeal No.444/03, S.T.A. 465/07, 2004 PTD 624, 2010 PTD (Trib.) 1636, 2010 PTD 465 and 2011 PTD (Trib.) 1010.
(iii) The show-cause notice in the instant case of appellant has to be issued within 14 days as per expression of Rule 8 of Sales. Tax Refund Rules, 2002 from the date of receipt of supportive documents. Which were submitted in the month of October, 2002. Contrary, the show-cause notice was issued on 25.06.2007 rendering the show-cause notice barred by time more than 5 years.
Hence, no proceeding can be undertaken against a time barred show-cause notice as per laid down law by the Superior Courts. Reliance is placed on reported judgment 1992 SCMR 1898, 2004 PTD (Trib.) 2898, 2006 PTD 537, 2007 PTD 1862, 2008 PTD 609, 2008 SCMR 1510, 2008 PTD 2025, 2008 PTD 1539, 2009 PTD 1247, 2010 PTD (Trib.) 81, 2010 PTD (Trib.) 1146, 2010 PTD (Trib.) 1469, 2010 PTD (Trib.) 1759, 2010 PTD (Trib.) 2421 and 2011 PTD (Trib.) 1010.
(iv) That the show-cause notice purported to be prepared for the refund of March 2002 on 13.07.2006 (and although not served) under Subsection (2) of the Sales Tax Act, 1990. The case should had been decided within 90 days from the date of show-cause notice in terms of proviso of sub section (4) of Section 11 or within such extended period by the Collector for which reasons has to be recorded and that extended period does not exceed further 90 days. The impugned order-in- original in the instant case is silent in regards to the said extension, meaning thereby no extension was sought and order has to be passed within initial 90 days. Contrary, order was passed after expiry of the 90 days, rendering the order barred by 02 days. Hence, it is ab-initio, null and void.
(v) The appeal with the respondent was filed on 23.12.2006 and an order under the proviso of subsection (2) of section 45-B of the Act should had been passed by the respondent within 90 days from the date of filing of appeal or within the further extended period of 90 days i.e. 180 days in all, provided the extension has been accorded prior to expiry of initial period of 90 days i.e. 12.03.2007 and that also after serving notice to the aggrieved person as held by Supreme Court in his reported judgment 1999 SCMR 1881.
(vi) That contrary the respondent extended the period on 12.06.2007 as evident from para.4 of Order-in-appeal containing his remarks that extension was made due to' "un-avoidable circumstances and administrative changes" despite not because appellant sought no adjournment and neither any administrative changes were available as the respondent was the authority at the time of filing appeal and even at the time of decision. Resultant, the extension is illegal and suffer from lack of jurisdiction, even otherwise it was accorded after expiry of initial period, which is tantamount to "flogging a dead horse in an effort to bring it to life". Once matter become barred by time then leasing life to issue through the said finding will not effect the past and closed transaction. Beside subsequent enhancement in the period of limitation shall not have the effect of re-opening the past and closed transaction and resuscitating the matters which attained finality and had gone in the annals of history. Hence, the orderin-appeal is barred by 91 days rendering it void and ab-initio as held by the Judicial Forum in Order --- in-Sales Tax Appeal No.K-255/01 (New Nos.286/04 and K-309/01) and Supreme Court in reported judgments 1998 MLD 650, 2004 PTD 369, 2005 PTD 23, PTCL 2005 CL 841, PTCL 2006 CL 836, 2007 PTD 2092, 2007 PTD 117, 2008 PTD 60, 2008 PTD 578, 2009 PTD 762, 2010 PTD (Trib.) 1631, (sic) PTD (Trib.) 1636, 2010 PTD (Trib.)
2117 and 2011 PTD (Trib.) 1010.
(vii) That it is not out of place for the appellant to state that where statute prescribed a particular mode or mechanism to do an act, the same is to be done in the same manner and in the framework of relevant legal provisions, contrary, the show-cause notice has been issued by an incompetent authority, which lack jurisdiction to do so. Reliance is placed on reported judgment PLD 1971 SC 197 and PLD 1973 SC 236.
(viii) That the stance taken by the department that the refund is nothing but reimbursement to the exporter of an amount received as Sales Tax by the Government which was paid on the goods exported, obviously, re-imbursement can take place only in a situation in which amount claimed as refund is established to have been received by the government in the first place from the person who supplied the goods otherwise any claim of refund would not be lawful as expressed in Subsection (4) of Section 10 of the Act, is completely based on forced construction of law and to prove his point with clarity, the appellant feels appropriate to comment on the same and for the sake of regularization and fair-play and for ease reproduce the expression of Section 10(4): "Where there is reason to believe that a person has Claimed input tax credit or refund which was not admissible to him, the provisions regarding time limit shall not apply till the investigation, including the verification of the deposit of tax claimed as refund, is completed and the claim is either accepted or rejected."
(ix) The expression of whole of Section 10 including Subsection (4) confirms that it is a machinery section as are sections 7, 8, and 9 and not a charging Section hence no charge can be levelled under the said. Section. Nevertheless, despite of the said fact, if for a while it is considered that charge can be levelled under the said section, even then it speaks deposit of tax by a registered person claiming refund under Subsection (2) of Section 10 of the Act with the agent of exchequer as expressed in Section 3(3)(a) of the Act, reading as "in case of supply of the goods, of the person making the supply", which the appellant did in terms of Section 73 of the Act. Hence, if the suppliers are non filer or had not deposited the collected tax mechanism is provided in Sections 11, 36 and subsection (e) of Section 37C of the Act. Not a single Section of the Act lays any such condition that the purchaser or claimant shall ensure deposit of collected sales tax by the suppliers in the Government Treasury, failing to which his refund shall either he held or rejected. Reliance is placed on the finding/decision of the Hon'ble Federal Tax Ombudsman in Contempt application in complaint No.C526 M/s. Innovative Impex, Karachi v. Revenue Division annexed as Exhibit "AV" at pages 202-205 of memo. of appeal), order in Sales Tax Appeal No.H-212/04, finding/decision of the FTO in Complaint No. C-498-K/2004, Order No.50/2005 of FBR issued under Section 47(A) of the Sales Tax Act, 1990 annexed as Exhibit "AY" to "BA" at pages 231 to 247 and reported judgment PLD 2001 Supreme Court 600, PTCL 2002 CL 115, 2006 PTD 2429, 2010 PTD 399 and 2010 PTD (Trib.) 635.
(x) That irrespective of the above, it is worth mentioning here that the refund applied by, the appellant is governed by Sales Tax Refund Rules 2000 (S.R.O. No.417(I)/02 dated 20.06.2002 ) and not the Sales Tax Refund Rules, 2002. The Refund Rules, 2000 did not prescribed the condition of payment proof and in support of his stance the appellant lays reliance on the majority decision issued by the Appellate Tribunal in Sales Tax Appeal No. S.T. 217/2004 (K-2) annexed as Exhibit "AU" at pages 187-201 of the memo. of appeal.
(xi) The adjudicating authority deposit of discussed above illegalities has also charged the appellant under Section 2(37) of the Sales Tax Act, 1990. Under which no charge can be made by virtue of the fact that it is definition of "Tax Fraud". The appellant fails to digest the said allegation as these are based on supply of copy of Sales Tax Return cum Payment Challan supplied by the suppliers for the satisfaction of the appellant in regards to his business activities. No provision of Sales Tax Act empowers the Adjudicating authority to question the appellant about the act and commission of the suppliers as "the falseness/fakeness has to be construed against the maker of the documents as held by the High Court in its reported judgments PLD 1973 Karachi 49". That neither allegation of tax fraud can be levelled against the appellant, unless the initial burden of proof lays on the adjudicating authority levelling the allegation under the said section is not discharged. Contrary, charge is levelled mere on presumption/assumption despite mandated to level the charge on the basis of un-refundable incriminating evidence. Reliance is placed on reported judgment [(1985) Tax (H.C. Kar.(sic)] 2004 PTD 868, 2010 PTD (Trib.) 957 and 2010 PTD (Trib.) 1827.
(xii) That for claiming refund by a tax payer under section 10(2) of the Sales Tax Act, 1990 read with Sales Tax Refund Rules, 2002 he should hold taxable invoices as per expression of section 23, had filed monthly Sales Tax Return-Cum-Payment Challan under Section 26, exported goods which are zero rated under Section 4 and subsequently had filed supportive documents specified in Rule 9 of the Sales Tax Refund Rules, 2000 against claim refund through Monthly Sales Tax --- Cum- Payment Challan. The appellant is holding valid taxable invoices and payment against those to the suppliers were made strictly in terms of Section 73 of the Act. The respondent has not been able to place on record any evidence by which it can be inferred that the invoices issued by the suppliers were false as mandated under Articles 117 and 121 of Qanun-e-Shahadat (10 of 1984 and clear directive issued by the Board in sub-para (iv) of para 2 of letter C.No. Dy-730- M(L)/2002 dated 15.06.2002. Hence, the adjudicating authority admitted in absolute terms that the appellant acted in letter and spirit of the Act and Rules. Any action which is based upon no evidence is not permitted by law and High Court of Sindh laid down the law in this regards in the judgment 1991 PTD 551.
(xiii) That lastly, it is imperative for the appellant to place on record the vital fact that the respondent in the case of appellant is advancing various objections one after another despite of the fact that the Collectorate of Sales Tax sanctioned refund of M/s. Decent Exports, Karachi along with additional amount guaranteed under Section 67 ibid despite of the fact that the suppliers from which the goods were purchased by M/s. Decent Exports were blacklisted later on and amount so sanctioned was adjusted towards adjudged recovery vide Sales Tax Refund Payment Order C.No. 18/200-Law/FTO/Decent Exports/ 03/6267 dated 14.04.2005 vide Order No.814/Reg/STH/ Suspended/03/1036 dated 28.02.2004. Whereas, yet in another case of GEE Kay International, Karachi refund was sanctioned upon passing of order-in-original by the Additional Collector of Sales Tax (Adjudication) vide No.234 of 2005 dated 28.07.2005, wherein show-cause notice was vacated containing the allegation of tax fraud under section 2(37) of the Act on the strength of invoices of the suppliers of the exported goods, which were later on declared to suspected/blacklisted against the recovered amount vide refund payment order No.T- 110802100514/6199 dated 23.06.2006 for Rs.1,131,335.00 (See annexed Exhibit "BD" to "BC" at pages 276 to 292 of memo. of ,appeal). The appellant is being given a differential treatment by the Collectorate of Sales Tax, which is tantamount to discrimination which is barred under the Articles 4 and 25 of Constitution of Islamic Republic of Pakistan and the principal laid down by the Superior Judicial Fora in reported judgments 2002 SCMR 312, 2002 PTD 976, 2005 SCMR 492, 2007 PTD 361, 2010 SCMR 431 and 2009 PTD 1507.
6. The Tribunal through order dated 19.06.2014 rejected the appeal, while observing in para reading as: "3. A plain reading of the above observation of the learned Collector (A) we find that the learned Collector (A) has observed that the amount claimed by the appellant as refund had not been paid to the Government not only that the appellant supplier did not file sales tax return but also the appellant prescribed forged evidence of payment of sales tax to create an impression that their suppliers had discharged their tax liabilities. Moreover, there is no evidence to the effect that the appellants actually purchased any goods from their so-called supplier. Thus, it is clear that neither the appellant purchased any goods from the suppliers not the so-called suppliers paid any amount as sales tax to the Government. Before us learned counsel has failed to submit any proof/evidence/documents to rebut the finding of the learned Collector (A) which is hereby upheld."
7. The applicant being aggrieved from the order filed rectification application dated 2.07.2014 on the strength of the following submission:
(a) Whether any proceeding can be initiated without serving of show-cause notice as stipulated in section 56 of the Sales Tax Act, 1990?
(b) Whether Assistant Collector of Sales Tax can issue show-cause notice and subsequently pass an order in the case in excess to his monitory limit given in section 45 of the Sales Tax Act, 1990?
(c) Whether show-cause notice was time barred by 04 years and 08 months and to be annulled as the same was issued on 03.07.2006 i.e. beyond the stipulated period of 14 days from the date of submission of supportive documents dated 13.09.2002, as expressed in Rule 8 of Sales Tax Refund Rules, 2000?
(d) Whether on the facts and circumstances of the case the Assistant Collector erred in law in travelling beyond the recommendation of the Hon'ble Federal Tax Ombudsman and order issued by the President of Pakistan?
(e) Whether the order-in-original is time barred being issued by the adjudicating officer in terms of Subsection (4) of Section 11 of the Sales Tax Act, 1990 beyond the period of 90 days or the extended period of (90) days?
(f) Whether order-in-appeal passed by the respondent is barred by limitation in terms of Subsection (2) of Section 45-B of the Sales Tax Act, 1990 to be with judgment of Superior Judicial Fora?
(g) Whether payment of tax on the goods supplied in Pakistan rest with the buyer/purchaser in terms of charging section of 3(3)(a) of the Sales Tax Act, 1990?
(h) Whether under any clause of the Sales Tax Refund Rules, 2000 claimant is duty bound to supply the copies of documents submitted by the suppliers during the course of his taxable activities with the Collectorate of Sales Tax of respective jurisdiction?
(i) Whether the respondent can give differential treatment to the appellant as against other under the respective Article of the Constitution of Islamic Republic of Pakistan?
That it was mandated upon the learned Appellate Tribunal to give reasoning of rejection of the, grounds of appeal while passing order, instead of issuance of a perfunctory, cursory and non speaking order, failure to give decision on the grounds of memo. of appeal and on the supplied relied upon judgments, despite mandated to do so as per laid down law in reported judgment 2002 CLC 825 wherein, the Hon'ble Division Bench of the High Court held that: "Failure to give decision on each issue --- Trial Court while deciding the suit had framed six issues but did not extends reasons separately on all issues and decreed the suit. --- while deciding appeal the Appellate Court had also not decided the suit --- while deciding appeal 'the Appellate Court had also not deciding the appeal issue-wise. Both the Courts below had disregarded mandatory provision of O.XX, R.5, C.P.C. and O.XLI, R 31, C.P.C. respectively. Where in the judgment the Appellate Court had not stated points for determination, decision thereon and the reasons for its findings, the same was not a "judgment" according to law---- Trial Court and Appellate Court having acted in exercise of its jurisdiction with material irregularity". The Division Bench also held that "Good judgment must be self evident and self explanatory---In other words it must contain reasons which should justify conclusion arrived at and the reasons should be such that a disinterested readers can find same convincing or at least reasonable".
The applicant in support of his stance rely upon reported judgment 2008 PTD 169 Commissioner of Income Tax Peshawar v. Gul Cooking Oil and Vegetable Ghee (Pvt.) Ltd. and 6 others and 2010 PTD 1016 Commissioner legal Division Large Tax Payer Unit Karachi v. Paracha Textile Mills Ltd, Karachi, wherein their Lordship of Supreme Court held in un-equivocably that wherein error of law or fact is discovered in the order itself, such an error falls within the category of "error apparent on the face of the record".---- Failure of the Court to take into consideration the material facts or statutory provision, which, if so considered, would have material effect on the fate of the case, would also amounts to an "error apparent on the face of the record" and error on the face of record is not restricted to clerical error or arithmetical mistake. Likewise the Appellate Tribunal of Inland Revenue of Pakistan, Karachi in MA(Rect) Nos.47/KB/2011, 48/KB/2011, 49/KB/2011 in Sales Tax Appeals Nos.743, 745/KB and 746KB/09 of Messrs Maxco (Pvt.) Ltd., Karachi v. CIR, R.T.O. Karachi allowed the rectification application while holding that the Tribunal has found that while passing the order, inadvertently the contention of the appellant/present applicant have not been considered, instead ignored, hence in the given circumstances the order of the Tribunal dated 19.06.2014 are recall and the case are directed to be placed at their original number for hearing for passing a fresh order. In reported judgment 2014 PTD (Trib.) 218 Kohsaar Distributor v. Collector of Customs Sales Tax and Central excise and another the Hon'ble Customs Tribunal held that "Tribunal may amend any of this order with a view to rectify any mistake apparent form the record at any time within one year of the order Tribunal had inherent jurisdiction to rectify the error /mistake whether factual legal, substantive or procedural floating on the surface of any order. Error on the face of record is not restricted to clerical error or arithmatical mistake."
That in view of the above elaboration, the Hon'ble Tribunal is requested to recall its earlier order and pass a fresh order after diluting upon the facts of the case and the ground of memo. of appeal in accordance with Article 201 of the Constitution of Islamic Republic of Pakistan and the ratio decidendi set-forth in its order of identical nature of umpteenth reported/unreported judgments and in the light of reported judgment 2007 PTD 153, wherein the Hon'ble High Court held "Tribunal being final fact finding authority, application for such purpose could submit rectification application before Tribunal" and wherein in reported judgment 2002 PTD 1587, the Hon'ble High Court held that "nothing, restrained the Tribunal in the present case from recalling their earlier order-- interest of justice ought to have served to undo a wrong for which the applicant was not at fault--order passed by the Tribunal was set aside and rectification application filed by the applicant was ordered as being pending before the Tribunal for decision".
8. The detail arguments were advanced by the learned Advocate of the appellant as per grounds taken in the original appeal and also taken in the rectification application.
9. The learned D.R. Mr. Riaz Ali Shah, Additional Commissioner Inland Revenue the representative of the respondent stated that the pointed out defects in the order of the Tribunal 19.06.2014 does not falls within the ambit of discrepancy apparently floating on its face and cannot be rectified under the provision of the Act/Ordinance and stated that the order of the Tribunal is correct and need not to be rectified, he further stated that the order passed by Deputy Collector, Refund Group-VIII, Collectorate of Sales Tax (Enforcement), Karachi and respondent are correct in fact and law and to be maintained.
10. Rival parties heard and case record perused and the following issues are framed for decision:
(i) Whether apparent mistake/error floating on the surface of order is restricted to typographical or arithmetical or factual and legal mistake/discrepancies also falls within the ambit of the said phrase and can be rectified within 01 year as expressed in Section 46 of the Sales Tax Act, 1990 to be read with 194(B-2) of the Customs Act, 1969 and Section 221 of the Income Tax Ordinance, 2001 and the law laid down by the Superior Judicial Foras in umpteenth reported judgments?
(ii) Whether show-cause notice dated 03.07.2006 was issued within 14 days as expressed in Rule 8 of Sales Tax Refund Rules, 2000 from the date of submission of supportive documents?
(iii) Whether Deputy Collector and Assistant Collector can issue show-cause notice/pass order-in- original in excess of their monitory limit expressed in Section 45 of the Sales Tax Act, 1990?
(iv) Whether the order-in-original has been passed by the Assistant Collector, Refund Group-VIII, within 90 days or further extended period of 90 days as expressed in subsection (4) of Section 11 of the Sales Tax Act, 1990?
(v) Whether order-in-appeal passed by the respondent is in accordance with the time period expressed in subsection (2) of Section 45-B of the Sales Tax Act, 1990?
(vi) Whether payment of tax on the goods supplied in Pakistan rest with the buyer/purchaser in terms of charging section of 3(3)(a) of the Sales Tax Act, 1990?
(xii) Whether under any provision of the Act or Rule of Sales Tax Refund Rules, 2000 claimant is duty bound to supply the copies of documents submitted by the suppliers during the course of his taxable activities with the Collectorate of Sales Tax of respective jurisdiction?
(xiii) Whether the respondent is empowered to give differential treatment to the appellant in derogation of the Articles 4 and 25 of the Constitution of Islamic Republic of Pakistan?
11. As regard issue No.(i), it is beneficial to reproduce section 194B(2) of the Customs Act, 1969 and which is as under:-- "the appellate Tribunal may, at any time within one year from the date of order, with the view to rectify any mistake apparent from the record amend any order pass by it under subsection (1) and shall make such amendment if the mistake is brought to its notice by the Collector of Customs or the other party".
The emphasis laid in this subsection is on the word "amend", meaning of which as per Black's Law Dictionary, Seventh Edition is "to make right; to correct or rectify" Therefore, the said subsection is not at all restricted to rectification of "clerical or arithmetical error" as defined in Section 57 of the Act, instead the subsection infact encompass all types of factual/legal and substantive/procedural error/mistake and this stood validated from the order of the Hon'ble Supreme Court of Pakistan c reported as 2010 PTD 1016 Commissioner (Legal Division) Large Tax Payer Unit, Karachi v. Paracha Textile Mills Ltd., Karachi that "mistake not have been arithmetic or clerical mistake but it could be substantive or procedural mistake. In 1993 PTD (Trib.) 249 it has been held that "the record contemplates the section does not mean the order of assessment but it comprise all proceedings on which assessment order is based and the income tax officer is entitled for the purpose of exercising jurisdiction under the section to look into the evidence and the applicable section to ascertain whether there was an error --- this section permits rectification of all mistakes which are apparent from the record of the appeal, revision, assessment or refund as the case may be. Non-controverting the ground taken in the appeal is also amounts to apparent error/mistake floating on the surface of an order and this has been held by Hon'ble High Court of Sindh in 2002 CLC 825 Qamar-ud-Din v. Province of Sindh that "wherein the judgment, the Appellate Court has not stated point for determination, decisions thereon and the reason for its finding, the same was not a judgment according to law --- Trial Court and the Appellate Court have acted in exercise of its jurisdiction with material irregularity such judgments and decree was set aside--- good judgment must be self evident and self explanatory in other words it must contain reason which should justify conclusion arrived at and the reason should be such that a disinterested reader can find same convincing or at-least reasonable. In 2008 PTD 1940 Dr. Zafar Haider v. Income Tax Appellate Tribunal and 2 others it has been held that there is onerous duty on the adjudicating authority to discuss and dispose off what has been argued. Failure to do so amounts to mistake which float from the surface of order." Similarly, the Hon'ble Supreme Court of Pakistan in reported judgment 2008 PTD 169 Commissioner of Income Tax Peshawar v. Gul Cooking Oil and Vegetable Ghee (Pvt.) Ltd. and 6 others held "where an error of law or fact is discovered in the order itself such an error falls within the category of "error apparent on the face of the record "- ---Failure of the court to take into consideration the material fact or statutory provisions which, if so considered, would have material effect on the fate of the case, would also amount to an "error on the face of record." "The power of review is conferred upon Supreme Court under Article 188 of the Constitution read with Order XXVI, Rule 1 of Supreme Court Rules, 1980 and Supreme Court may, subject to law and practice review its judgment or order if an error of law or fact, having material effect on the case on merit, is found apparent on the face of record or if such a material question of fact or of law bearing effect the decision, has been overlooked. The review jurisdiction of Supreme Court is certainly invocable in case in which an error either of fact or law is manifest and is found floating on the surface of the record. The court may not hesitate to review an order passed on erroneous assumption of material fact or misconstruction of law which has a substantial effect on the fate of case and is considered a wrong order." Where an error of law or fact is discovered in the order itself such an error falls within the category of error apparent on the face of record. The failure of the court to take into consideration the material facts or statutory provisions which, if so considered would have material effect on the fate of the case would also amount to an error on the face of record." In adherence of the ratio decidendi set froth by the Judicial Fora this Tribunal also held in many judgments including referred by the applicant and in reported at 2014 PTD (Trib.)
218 Kohsar Distributor v. Collector of Customs, Sales Tax and. Central Excise and another, 2013 PTD (Trib.) 2284 M/s. Tayyaba Agencies, Karachi v. Additional Collector of Customs, MCCA, Karachi and 2016 PTD (Trib.) 107 M/s. Qazi CNG Filling Stations v. The DGI&I-FBR that "Tribunal may amend any of its order with a view to rectify any mistake apparent from the record at any time within 1 year of that order --- Tribunal had inherent jurisdiction to rectify the error/mistake whether factual or legal floating on the surface of any order.---Error on the face of record was not restricted to clerical error or arithmetical mistake Appellate Tribunal being final fact finding authority could rectify its order.
Meaning thereby, that the error/mistake floating on the surface of order is not at all restricted to clerical error or arithmetical mistake instead all type of error whether factual/legal or substantive or procedural falls within the ambit of apparent mistake floating on the surface of an order and can be rectified within 1 year from the date of order by the Tribunal being final fact finding forum as per terms of subsection 194-B(2) and the law laid down by the High Court of Sindh in reported judgments 2007 PTD 153 and 2002 PTD 1587. We therefore hold that rectification application is within legal frame work.
12. The issue No.(ii) is related to Sub-Rule (1) of Rule 8 of the Rules, 2000 which states that "in case any refund claim or part thereof is found non genuine and not admissible under the law, a notice shall be served on the claimant requiring him to show cause in writing within fourteen days, as to why the claim or the case may be , part thereof should not be rejected and as to why the claimant should not be proceeded against under the relevant provision of law". The appellant submitted Sales Tax Refund Challan in the National Bank of Pakistan on 15.03.2002 and supportive documents as defined in Rule 9 of the Rules, 2000 were submitted on 18.09.2002 with the Collectorate of Sales Tax (Enforcement), Karachi. In case the Assistant/Deputy Collector of Sales Tax, were of the view or opinion that the claim of appellant seems to be non genuine or not admissible under Section 10 and Rule 7 of the Act/Rules, it was mandated upon them to issue show-cause notice to the appellant on or before 02.10.2002 without any exception. To the contrary, he issued show-cause notice dated 03.07.2006 i.e. after expiry of 4 years 08 months from the date of submission of supportive documents. This act of officer render the show-cause notice barred by time and no proceeding, culminating to the said notice could be undertaken, which include passing of order- in-original dated 02.12.2006 and this has been held by Tribunal in S.T.A. 274/05 in Sattar Brothers v. Collector of Customs (Appeals), Hyderabad and others, S.T.A. 179/06 in Dadabuoy Sack Ltd. v. The Collector of Customs, Sales Tax and Federal Excise (Appeals) Hyderabad and others and reported judgments 2009 PTD (Trib.) 500: in Shah Murad Sugar Mills and others 2007 PTD 117, Messrs Ghandhara Nissan Diesel Ltd. v. The Collector of Customs, Karachi, 2005 PTD 2453 PSIC Cutlery, Wazirabad v. Collector of Sales Tax and Central Excise, Gujranwala and others 2008 PTD 983, Joyla Sadat Cotton Industries v. Collector of Customs, 1992 SCMR 1898 Federation of Pakistan v. Messrs Ebrahim Textile Mills Ltd. and others 2006 PTD 537, Collector of Customs, Sales Tax (West) Karachi v. K&A Industries Karachi. In view of the position we held that notice was time barred and proceedings initiated are not sustainable.
13. In issue No.(iii), the power of appropriate officers as defined in subsection 2(2) is to be considered. Section 45 of the Act prior to omission through Finance Act, 2010 was as follows:---
45. Power of Adjudication --- [(1)] In cases involving assessment 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:- [(i) Additional Collector Cases falling under subsection (2) of section 11 and section 36 without any restriction as to the amount of tax involved or amount erroneously refunded.
(ii) Deputy Collector (a) Cases falling under subsection
(b) Cases falling under subsection (2) of section 11 and section 36 provided that the amount of tax involved or amount erroneously refunded exceeds one million rupees, but does not exceed two and a half million rupees.
(iii) Assistant Collector Cases falling under subsection (2) of Section 11 and section 36 provided that the amount of tax involved or amount erroneously refunded exceed ten thousand rupees but does not exceed one million rupees.
The amount of refund involved in the case in hand is Rs.4,952,683.00, the power to adjudicated the said case rest with the Additional Collector in terms of clause (i) of Section 45 of the Act. To the contrary Deputy Collector issued show-cause notice dated 03.07.2006 by assuming the powers of Additional Collector, rendering it ab-initio void and as such coram non judice. Astonishingly, the order-inoriginal dated 02.12.2006 has been passed by Assistant Collector, again by usurping the powers of Additional Collector. We are at loss to digest that how these officers acted in derogation of the provision of Section 45, when it is pre-condition for these Officers to look into the provisions of Section 45 prior to issuing show-cause notice/passing of order-inoriginal. Both usurped the powers of their superior, one has to remain within his allotted sphere and this has been held in countless judgments by the Superior Judicial Fora that in case of assuming wrong jurisdiction, the structure built thereon ought to crumble down. In reported judgment 2001 SCMR 1822 All Muhammad v. Chief Settlement Commissioner, the Hon'ble Chief Justice of Pakistan Mr. Iftikhar Muhammad Choudhry presiding a bench in the capacity of Judge of Supreme Court held that:- "whenever order are passed by an officer without caring whether jurisdiction vests in him or not, it is prima-facie reflect on his conduct as well as competency. It is also to be noted that whenever authority is exercise in such a manner then no other inference can be drawn except that the functionary has transgressed his jurisdiction for the consideration other than judicial one and the Courts seized with such orders may recommend any action against the said officer because neither the executive authorities nor judicial forum will pass a wrong order because the jurisdiction in both the capacities is conferred upon such authorities to discharge their function in accordance with law which has bestowed upon them to function in that capacity and if there is abuse of power by such officer then no hesitation should be felt in passing stringent stricture against officer keeping in view of norms of justice."
Their lordships of the Supreme Court in reported judgment PLD 2004 Supreme Court 600 All Pakistan Newspaper Society and others v. FOP and others, it has been held "determination of jurisdiction by Court seized with the matters is one of the important element in administration of justice as if justice has been provided basing upon coram non judice order then same would have no legal sanction behind." And in PLD 2005 Supreme Court 842, Khyber Tractor (Pvt.) Ltd., v. Pakistan Through Ministry of Finance, Revenue and Economic Affairs that "question of jurisdiction of a forum is always considered to be very important and any order passed by a Court or a forum having no jurisdiction' even if it is found to be correct on merit is, not sustainable. Jurisdiction of a Court lays down a foundation stone for a judicial or a quasi judicial functionary to exercise its power/authority and no sooner the question of jurisdiction is determined in negative the whole edifice built on such defective proceeding, is bound to crumble down." While following the settled ratio by the Hon'ble Supreme Court of Pakistan we hold that the assuming of Powers by the Deputy/Assistant Collector of the Sales Tax in the case of the appellant is C0171171 non judice, hence, ab-initio, null and void and of no legal effect. The officer has crossed his limit which was not allowable, the action of the officer is without jurisdiction.
14. As regards to the issues Nos.(iv) and (v) , the show-cause notice by the Deputy Collector of Sales Tax was issued on 03.07.2006 under subsection (2) of Section 11 of the Act and order under Subsection (4) ibid has to be 'passed within 90 days or further extended period of 90 days prior to expiry of the initial period of 90 days i.e. 01.10.2006 by the Collector of Sales Tax after serving notice to the person concerned as held by Hon'ble Supreme Court of Pakistan in 1999 SCMR 1881 and thereafter recording the exceptional circumstances for the extension of further period. In the instant case the order-in-original has been passed on 02.12.2006 without any extension rendering the order -in-original barred by time by 62 days. Similarly, the appeal was filed by the appellant before the respondent on 23.12.2006 and an order by him under the proviso of subsection (2) of section 45-B had to be passed within 90 days i.e. on or before 12.03.2007. Instead order was passed on 12.06.2007, for justification of delay the respondent in para.4 of the order-in-appeal extended the period for further 90 days on 12.03.2007, while ignoring the fact that the time has to be extended prior to expiry of initial period of 90 days i.e. on or before 12.03.2007 with the observation that the time has been extended due to "unavoidable circumstances and administrative changes". Inspite not availability of these because he was the Collector Appeal at the time of filing appeal and passing of Order-in-appeal, infact he extended the period on 12.06.2007 i.e. after the expiry of initial period of 90 days. In words of Superior Judicial Fora time extension given in such cases is akin to giving a new lease of life into dead entity. It is tantamount to flogging a dead horse if an event or documents has become dead on account of non timely extension of time period prior to expiry of entire stipulated period. It is legally considered dead and new spirit cannot be infused into it by any means or on account of any reason whatsoever. Following extract from the judgment of the Hon'ble Sindh High Court reported as 2007 PTD 117 is relevant to the merit of this case: We are of the considered opinion that once a matter become barred by time then the subsequent enhancement in the period of limitation shall not have the effect of reopening the passed and closed transaction and resuscitating the matters which attained finality and had gone in the annals of history.
The same principle has been laid down by the Hon'ble Lahore High Court in the case of M/s. Super Asia Muhammad Din Sons (Pvt.) Ltd., v. Collector of Sales Tax Gujranwala and another reported as 2008 PTD 60:
(i) "Once limitation had started to run and had come to an end the assessee had acquired a vested right of escapment of assessment by lapse of time.
(ii) The claim of the revenue that the prescribed limitation of 45 days from completion of adjudication proceedings as provided through Finance Ordinance, 2000 and enhanced to 90 days by Finance Act, 2003 is merely directory cannot be accepted. It is settled law that where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen the prescription of time is deemed directory. However, where a public functionary is empowered to create liability against a citizen only within the prescribed time, it is mandatory. The acceptance of contention of the revenue in that regard will make a provision of law redundant and nugatory. Redundancy or superfluity of an act of Parliament and a provision of law cannot be readily accepted. All the more so when the prescribed limit is beneficial for the citizen and restricts the executive power to touch the pocket of a tax payer thereby creating threat after its expiry even if there was good case for creation of liability he will not be dragged in."
In the context of not granting extension within the initial period of time limit, the Hon'ble Apex court in its judgment reported as 1999 SCMR 1881 has observed as under which supports the contention of appellant beyond any iota of doubt.
"Having said as much, we also do not think that the petitioner's caveat is totally devoid of substance. Thus if initial period of two months, envisaged in S.168 (Supra) is allowed to go by without any extension having been made, a vested right may come to accrue to the affectee and Collector should be obliged to issue a notice and accord necessary hearing before granting any extension---correspondingly as always, it would remain a moot question whether an extension , if any, was actually made within the initial period of two months from the date of seizure and merely because it purports to have been so made within time, may not be in itself be enough the contrary may be shown but, ordinarily within the Customs Jurisdiction alone."
That since the initial period of 90 days stood expired on 12.03.2007, without any extension, the order-in-appeal become barred by limitation period by 90 days. Rendering it as well as order-in- original which is also barred by limitation as without power/jurisdiction, hence, void and ab-initio and not enforceable under law. The said ratio was further fortified by the superior Judicial Fora in judgments unreported/reported. Order in Sales Tax Appeal No.K-255/01 (New No.K-286/04) and K- 309/01, 2006 PTD 345, PTCL 2005 CL 841 finding/decision in complaint No.958-L/2005, 1998 MLD 650, 2004 PTD (Trib.) 2898, 2004 PTD 369, 2005 PTD 23, 2007 PTD 2092, 2008 PTD 609, 2008 PTD 578, 2009 PTD (Trib.) 1263, 2009 PTD 762, 2010 PTD (Trib.) 23, 2010 PTD (Trib.) 81, 2010 PTD (Trib.) 1146, 2010 PTD (Trib.) 1469, 2010 PTD (Trib.) 1631, 2010 PTD (Trib.) 1636, 2010 PTD. (Trib.) 2117. The action of the two below officers is hit by limitation hence not sustainable,
15. We now discuss issue No. (vi), the expression of section 3(3)(a) of the Act with clarity says that "the liability to pay tax shall be in the case of supply of goods in Pakistan of the person making the supply", meaning thereby that tax collected from the buyer by the seller in the capacity of agent of FBR has to be deposited in the exchequer by him along with monthly sales tax return cum- payment challan submitted with the designated bank as per enunciation made in section 26 of the Act. In the case in hand the appellant paid the amount of goods inclusive of suffered tax through pay orders in terms of section 73 of the Act, the said fact has not been denied either by the Assistant/Deputy Collector and respondent in the show-cause notice, order-in-original or order- inappeal. The emphasis laid by the Deputy/Assistant Collector is that the supplier has not deposited the collected tax in the exchequer and by the respondent that "when the tax is not deposited in the exchequer, refund is not accrued as refund is nothing but re-imbursement to the exporter, of an amount received as sales tax by the Government on the goods which are consumed in export production". While adducing these observations the Assistant/Deputy Collector miserably failed in pointing the enabling provisions of the Act, wherein it is mandated upon the buyer that he has to ensure that the tax paid by him to the supplier has to be paid to the exchequer and as regard to the observation of the respondent, it is suffice to say that it is completely based on misconception, the exporter is entitled for refund of the sales tax which he paid along with the cost of goods to the supplier, upon exporting those, as the goods exported out of Pakistan are zero rated in terms of Section 4 of the Act. No objection/observation is available in the show-cause notice in regards to the veracity of the purchased goods and export of those under section 131 of the Customs Act, 1969, rendering the observation of the respondent beyond the charter of show-cause notice. Any order passed outside the scope of show-cause notice is palpably illegal on the face of it and this has been held in reported judgments Collector Excise and Land Customs and others v. Rehm Din reported at 1987 SCMR 1840 and Adam v. Collector of Karachi PLD 1969 Supreme Court 446, Muhammad Sadgain v. Collector of Customs (Appraisement)
2006 PTD 2742 and Messrs Exide Pakistan Ltd. v. Deputy Collector of Customs (Adjudication-III), Karachi, 2004 PTD 449, that "Order of adjudication, being ultimately based on a ground which was mentioned in the show-cause notice is palpably illegal on the face of it". That as per the expression of section 3(3)(a) of the Act no liability lies on the part of purchaser to pay tax in the exchequer, the liability squarely lies upon the seller and this has been held unequivocally by this Tribunal in umpteenth judgments, including majority Order-in-Sales Tax Appeal No.217/2004(K-2) of Collector of Customs, Sales Tax and Central Excise (Enforcement), Karachi v. Welfare Trading Company, Karachi and Collector Appeals-III, Customs Sales Tax and Central Excise, Karachi that "the Refund Rules,2002 did not prescribed the condition of proof of payment and same was not applicable on the respondent No.l. The Learned Member judiciously has rightly observed that "the provision for the verification of the deposit of tax claimed as refund contained in Section 10(4) ibid does not means that the refund is to be denied to the recipient due to non deposit of tax by the supplier". The learned Advocate for the respondent on the basis of provision of law under 0 section 3(3)(a) of the Sales Tax Act, 1990 argued that the liability to pay the tax shall be "of the person making the supply." This view was confirmed by the Hon'ble High Court of Lahore in 2000 PTD 399, which was in turn accepted by Hon'ble Supreme Court of Pakistan in PLD 2001 HC 600. The appellant case is that the supplier had not deposited the tax during the period the respondent had made purchases, they, however, admitted that "the goods purchased under the invoices were actuality exported and the supplier were not black listed at that time." By getting strength from the ratio settled by Superior Judicial Fora we are of the firm opinion that where sales tax have been paid to the units registered by the Sales Tax department and was authorized to collect sales tax milts behalf, the responsibility to deposit the same lays with, the suppliers not on the buyer/appellant and if they have not deposited the same with the exchequer, the department should had identified those and proceed for recovery of sales tax paid to them in accordance with law, which they have not done to this date and needlessly rejected the claim of the appellant in derogation of sections 3(3)(a), 4, 10 and 73 of the Act and the Sales Tax Refund Rules, 2000. In view of this legal position action of the officer is not sustainable.
16. As regard to issue No. (vii), for the claimed refund under Section 10 of the Act and exporter has to submit with the Collectorate of Sales Tax (Enforcement) supportive documents, prescribed in Rule 9, which are (i) input .tax invoices and/or as the case may be, bill of entry; (ii) zero rated invoices in case of export (v) bill of exports (quadruplicate copy) indicating Mate Receipt number and date or as the case may be, Air Way Bill number or Railway Receipt number and date or postal receipt number and (vi) bill of lading and air way bill or as the case may be railway receipt and postal receipt indicating transportation of goods out of Pakistan. In the case in hand the appellant was holding taxable invoices issued by the suppliers as per Section 23, and filed monthly sales tax return cum payment challan under Section 26 within the prescribed period and submitted all the documents prescribed in Rule 9 with the Collectorate of Sales Tax (Enforcement) on 13.09.2002 and payment to the suppliers had been made through pay order in terms of Section 73 of the Act under any provision of the Act or Rules, embodied in the Rules. We are unable to locate any expression directing the exporter to supply the sales tax record maintained by suppliers under Section 22 of the Act or laying liability on the buyer/exporter, ensuring submitting of Sales Tax Return cum payment challan by the suppliers or for claiming, refund an exporter (appellant) has to supply the copies of the filed sales tax return cum payment challan to the sales tax refund sanctioning authority or to the fact that as to whether the suppliers have deposited the tax in the exchequer. In the absence of enabling provision in the Act and Rules, no liability lies on the exporter (appellant), even otherwise, if the sales tax return cum payment challan filed by the suppliers said to be found as not filed or fake, in that case action is warranted under the provision of law against the suppliers not the purchaser as the falseness has to be construed against the maker of the documents as held by the High Court in its reported judgment PLD 1943 Karachi 49. The allegation of tax fraud as defined in section 2(37) cannot be levelled against any person including the appellant unless initial Burden of proof lays on the department is not discharged as held in reported judgments 2004 PTD 868, [(1985) Tax (H.C.Kar (sic)] 2010 PTD (Trib.) 957 and 2010 PTD (Trib.) 1827 which the department miserably failed to discharge and this stood validated from the fact that the Assistant Collector of Customs in order dated 02.12.2006 directed to conduct investigation in the affairs of suppliers and thereafter proceed against them in terms of Section 37 and against the appellant in case of their involvement. Ironically inspite lapse of about ten years no investigation is being carried out. This lackluster approach confirms that the entire case is based on no evidence instead being framed on the basis of assumption/presumption and conjectures. Any action which is based upon no evidence is not permitted by law and this has been held by the Hon'ble High Court of Sindh in reported judgment 1991 PTD 551 Ulbricht's Pakistan Limited v. Deputy Collector-II, Central Excise and Land Customs and 03 others. Therefore, we hold that the appellant has acted, strictly. within the provision of law and the Rules and regulation framed there-under and action of the officer is violation of law and procedure prescribed.
17. The issue No. (viii) is related to discrimination; we are amazed to note that the respondent's department in the cases similar to appellant paid refund inclusive of additional amount under section 67 of the Act amounting to Rs.30,492,708.00 to Messrs Decent Export, Karachi upon dismissal of representation by the President of Pakistan against the finding of the FTO and Rs.1,131,335.00 to M/s. Gee Kay International, Karachi upon issuance of order-in-original by the Additional Collector of Sales Tax (Adjudication) vide No. 234 of 2005 dated 28.07.2005 vide refund payment orders No.C.No.18/200-Law/FTO/Decent Exports/03/ 6267 dated 14.04.2005 vide Order No.814/Reg/STH/Suspended/ 03/1036 dated 28.02.2004 and T-110802100514/6199 dated 23.06.2006 respectively, inspite of the fact that their suppliers were suspected/ blacklisted by the Collector Headquarter vide Order No.814/Reg/ STH/Suspected/03/1036 and charge of tax fraud under Section 2(37) in the show-cause notice against the later was invoked. To the contrary inspite no fault or default on the part of the appellant, their refuhd has been rejected in derogation of the provision of the Act and Rules and Regulations framed thereunder. The appellant inspite standing on the same pedestal has been given a differential treatment, which is tantamount to discrimination not permitted, under Articles 4 and 25 of the Constitution of Islamic Republic of Pakistan and law laid down in reported judgment 2002 PTD 976 held that "vacating the show- cause notice in one case and taking action against another person in similar situation, is amount to discrimination which is hit by Article 25". In reported judgment 2002 SCMR 312 and 2009 PTD 1507 the Hon'ble Superior Courts "there exist no power to target incidence of tax in such a way that similarly placed person be dealt not only this similarly, but discriminatingly". Whereas, in reported judgment 2005 SCMR 492 the Hon'ble Supreme Court held that "A facility allowed to some one and denied to other is discrimination". The Apex Court further held in reported judgment 2010 SCMR 431 that: "doctrine of equality, as contained in Art. 25 of the constitution, enshrine golden rules of Islam and states that every citizen, no matter how high so ever, must be accorded equal treatment with similarly situated persons--- State may classify persons and objects for the purpose of legislation and make laws applicable only to persons or objects within a class--- In fact all legislations involve some kind of classification whereby some people acquire rights or suffer disabilities whereas others do not---What however, is prohibited under principle of reasonable classification, is legislation favouring some within a class and unduly burdening others--Basic rule for exercise of such discretion and reasonable classification is that all persons laced in similar circumstances must be treated alike and reasonable classification must be based on reasonable grounds in given set of circumstances but the same in any case must not offend spirit of Art. 25 of the Constitution."
The treatment given to the appellant against the principle enshrined in Articles 4 and 25 of the Constitution of Pakistan and violate the principle of law settled by the Superior Court in further judgment reported as 1990 SCMR 1072, 1990 SCMR 1059, 1975 SCMR 352, PLD 995 SC 396, 1998 SCMR 1404, PLD 1997 SC 582, PLD 1997 SC 334 and 1997 SCMR 1874. We therefore hold that discrimination and different treatment given is not in accordance with the settled principles of law, the action of the officer is not sustainable.
18. Whatever mentioned above, we reached at the irresistible conclusion that the orders passed by the forum below are not sustainable which appears to be contrary to the law/Rules, being erroneous and not in consonance of law, equity and natural justice. The application of rectification is clearly showing legal, and procedural mistakes in the original order passed by Tribunal in S.T.A.
No.678/K of 2009 dated 19-06-2014 as discussed supra. We have also observed that many legal and procedural contentions raised also escaped the attention of Tribunal which have been discussed in detail by us supra. We therefore, allow the appeal as prayed and the rectification application and further direct the respondent/department to pay the refund claim.
19. The rectification application is disposed off in the manner indicated above.