MUHAMMAD JAWED ZAKARIA, JUDICIAL MEMBER--- By this order I intend to dispose of above titled appeal filed by the appellant/department against the order in-appeal No, 373/2012, dated 21-12-2012 delivered by the learned CIR(Appeals-II). Islamabad The department has agitated the grounds of appeal as put-forth in the memo. of appeal.
2. Brief facts of the case as gathered from the record are. that the registered person claimed input tax adjustment on the basis of supplies which has not been reconciled with the sales tax returns filed by the suppliers regarding which the registered person was confronted through show-cause notice and after considering view-point of the registered person order-in-original was passed for the recovery of sales tax at Rs, 16,798,683/- alongwith default surcharge and penalty.
3. Being aggrieved and dissatisfied with the treatment meted by the DCIR, registered person preferred appeal before the learned CIR(A) who vide his impugned order remanded back the case.
4. Feeling aggrieved and dissatisfied with the impugned order-in-appeal now the department has come-up appeal before this Tribunal.
5. This Court issued notice to the parties, in response thereto Mr. Imran Shah appeared ion behalf of the Appellant/Department as D.R. while Mr. Mehmood Ahmed Asstt. Accounts Officer appeared on behalf of the registered person.
6. During proceedings before this Court, learned D.R. has contended that the order of learned CIR(A)' Islamabad is bad in law and against the facts of the case. Learned D.R. further contended that the learned CIR(A) was not justified to remand back the order of adjudicating officer on the issue of chargeability of Sales Tax and Federal Excise Duty as the same was charged under Sections 3, 6(2), 7, 8(1)(ca) and 26(1) of the Sales Tax Act, 1990 and 3A and 4 of the Federal Excise Act, 2005 which cannot be remanded for de novo consideration under the provision of Section 45B(3). Last but not the least, the learned D.R. in-finale stated that sub-section (3) of Section 45-B has created an exception out of sub-section '(2) and deal with: different set of situation. This sub- section states that "in deciding an appeal, the Commissioner Inland Revenue (Appeals) may make such further inquiry as may be necessary provided that he shall not remand the case for de novo consideration". The literal meaning coveys that, in case where Appellate Commissioner has preferred "further inquiry" he should not remand the case for de novo consideration and he is bound to record the reasons on the basis of his inquiry and pass the Order. The main object of insertion of this clause is that the tax-payer as well as the department should not be tormented twice on the same subject-matter firstly in the hands of Appellate Commissioner and secondly, in the hands of Adjudicating Officer, once again, thus facilitating the tax-payer/department from double jeopardy. He lastly has prayed that 'the order-in-appeal passed by the learned CIR(A) be remanded back to CIR(A) for with direction to pass speaking and fairly well-reasoned order, after conducting "further enquiry"/verification.
7. On the other hand, learned counsel for the tax- payer strongly opposed the contentions made by the learned D.R. and supported the order-in-appeal passed by the learned CIR(A). Learned A.R. of the tax-payer further contended that the impugned order-in-appeal passed by the learned CIR(A) is legal lawful and in accordance with law. He went on to urge that the learned CIR(A) has passed speaking order and there is no illegality or lacuna in his order. Learned counsel for the tax-payer while relying on sub-section (2) of Section 45-B that the Commissioner Inland Revenue Appeals may, after giving both parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appeal against. He has further asserted that it is common knowledge that an appeal is creature of statute.
Commissioner Inland Revenue (Appeals) hears appeal under a jurisdiction specially created by the provision of a statute, either Sales Tax Act, 1990 or Federal Excise Act, 2005, then it has to act under it. The respondent has placed considerable reliance on the phrase "as he think fit" and it is argued that in the circumstances of the case, when the learned Commissioner Inland Revenue (Appeals) has promoted to remit the proceedings for reconsideration on the ground of lack of opportunity and absence of independent verification/confirmation of output and input invoices on part of department. Thus he has reached to a conclusion which as he thought fit under the facts and circumstances as phrase "thinks fit" give enough powers. The learned counsel for the tax- payer further went on to argue that the power of remand is inherent power in any judicial or quasi- judicial authority especially appellate fora Finally he has prayed that impugned order passed by the learned CIR(A) be maintained.
8. Heard the learned 'Representatives of both the sides and have perused the impugned order-in- appeal of learned CIR (A) as well as order passed by the DCIR. Before taking into consideration the issue in hand, it is imperative to reproduce the Jelevant Section of law. which reads as under.-- Section 45-B(3)
"In deciding an appeal. the Commissioner Inland Revenue (Appeals) may make such further inquiry as may be necessary provided that he shall not remand the case forde novo consideration."
9. From perusal of above Section that it is quite obvious that the learned CIR(A) has no jurisdiction to remand. the case for de novo consideration. In the recent past the Full Bench of Appellate Tribunal Inland Revenue, Lahore Bench. Lahore has decided the issue in STA No, 1019/LB/2014, dated 01-06-2016 while relying on the judgment of Hon'ble Lahore High Court. Lahore vide S.R.T. No, 12/2012, dated 28-10-2013 titled as The Commissioner Inland Revenue v M/s. Supreme Tech. International, wherein it has been observed that.--- "The perusal of the above Section clearly manifests that the CIR(A) can conduct enquiry as he may think necessary to conclude the proceeding and to reach at a just and fair conclusion but he has no power to remand the case for de novo proceedings. The issue in hand has also been set at naught by the Honble Lahore High Court in Tax Reference bearing STR No, 12/2012, dated 28-10-2013 in the case titled as Commissioner Inland Revenue v M/s: Supreme Tech International, in which their lordship Mr. Justice Syed Mansoor Ali Shah has observed as under:-- "We have heard the learned counsel for the parties and have reviewed Section 45-B of the Sales Tax Act. 1990. It is trite law that the power of remand is inherent in any judicial or quasi-judicial forum. however, it must he sparingly used Reliance is placed on M/s. Karass Paints arid Allied Industries. Faisalabad through Director v Collector of Sales Tax. Faisalabad & others (PTCL 2007. CL 462). Ms Avenbee (Pvt.) Ltd v income Tax Appellate Tribunal (Headquarters), Karachi and others (2002 PTD 407), Chairman, WAPDA. Lahore &others v Gulbat Khan (1996 SCMR 230). Rushpa Devi & others v. Binod Kumar Gupta & another (AIR 2004 SC 1239) and Ashwinkumar K. Patel v. Upenda J.
Palal and others (AIR 1999 SC 1125). In the light of the above case-law, if we review Section-45-B of the Act it appears that, the legislative policy behind the said provision is to curb protracted tax litigation and help disentangle the tax-payer from extended legislative process. It is for this reason that owner has been vested in the a &late forum i,e, Collector further inquiry as may be necessary to ascertain the fact rather than remitting the case to a lower forum. Having empowered the Collector (Appeals) to hold further inquiry at the appellate stage, the law has also prohibited the remand of such a case for de novo consideration.
It is axiomatic that avoiding long drawn litigation under Section 45-B(3) of the Act is equally beneficial for the tax-payer and the tax collector. Beneficial legisIation needs to be liberally construed to actualize the object of the statute. We, therefore, hold that Collector (Appeals) cannot remand a case for de novo consideration to the lower forum but instead use the power or further inquiry to conclude the matter before him.
Another dimension of the case is that the Collector (Appeals) is not vested with the choice or .,option to pick and choose a case for further inquiry. Any such discretion is inherently discriminatory and offends Article 25 of the Constitution.
In this view of the matter, the question of law raised in the reference is answered in the negative.
Disposed of"
The result of the appeal is obvious, we set aside the order of the learned CIR (Appeals) and remand the case to him to decide the appeal as per grounds of appeal taken before him by the appellant in the memo of appeal and in accordance with law after providing adequate opportunity of being heard to the appellant. We order accordingly."
(underline for emphasizing)
10.In another judgment reported as [2015 PTD (Trib.) 931] titled as M/s. Nigar Enterprises, Chaman Chambers v. CIR Zone-VI, RTO, Lahore wherein the learned Tribunal vividly expounded as under:--- "Order passed by Appellate. Authority was totally illegal and unlawful and liable to be struck down/annulled becuase Section 458(3) had not conferred the power to remand the case.
We have given due consideration to the rival arguments and also gone through the relevant record available on file. After due consideration, we are convinced with the assertions made by the learned AR. From the perusal of record as well arguments made by the learned AR, we have come to inescapable conclusion that the learned CIR (Appeals) should have cancelled the impugned order in-original rather than remanding the matter back to the assessing. The' learned CIR(Appeals) has given categorical findings that "Prima facie, it seems that impugned show- cause notice as well as letters never reached the appellant's hands and the case was decided ex parte in a single hearing and the appellant was deprived of its rights of properly furnishing the requisite documents and explaining of its stance. In this scenario, I am satisfied that the appellant was prevented by sufficient cause from producing such material or evidence before the ACIR". In the presence of such unequivocal observation/finding, the learned CIR(A) was not justified to remand the matter back to the adjudicating officer for fresh proceedings as such a direction is tantamount to give another chance to the department to fill in the lacuna to improve their case.
Furthermore, the following provision of sub-section (3) of Section 45-8 of the Sales Tax Act, 1990 does not empower the learned CIR(Appeals) to remand back the case:- "In deciding an appeal, the Commissioner Inland Revenue (Appeals) may make such further inquiry as may be necessary provided that he shall not remand the case for de novo consideration".
Having considering all aspects of the case in its entirety and after specifically following the ratio settled in the case reported as 2012 PTD (Trib.) 350 and STA No, 478/L8/2012. Lahore High Court, Multan Bench, Multan. We have reached the inescapable conclusion that the department has failed to prove the charge of tax fraud against the registered person. Furthermore, the learned CIR(Appeals) also has erred in law in remanding the case to the adjudicating officer for fresh' proceedings..
In view of the above submission made by the learned AR we are inclined to hold that the impugned order passed by the adjudicating officer is not maintainable in the eye of law which is hereby annulled. Order of the learned CIR(Appeals) being against the express provisions of law, is accordingly vacated. Appeal of the registered person succeeds.
11. The main object of insertion of this clause is that the tax-payer ought not to be tormented twice on the same subject-matter firstly in the hands of the learned CIR(A) and secondly in the hands of adjudicating officer/OIR, thus, facilitating the tax-payer from double jeopardy. The view of this Court is further fortified by the supra judgments. This Court has anxiously considered the arguments advanced by rival parties and also gone through the relevant available record as well as reported and unreported judgments of the Hon'ble High- Court and full Bench and other Benches of learned Tribunal (ATIR). referred to supra. This Court find itself in agreement with the assertions made by learned departmental representative, which are forceful. In such-like situation, the learned CIR(A) is also directed to preferably decide the appeal himself instead of remanding case for vexing tax-payer twice for the same cause and there was no justification to prolong, protracted litigation at the cost and inconvenience of the "Tax-payer and revenue/adjudicating officer, particularly when the statutory provision [Section 45-B(3)} had expressly prohibited such remand. It is, therefore, considered view that the learned. CIR(A) acted illegally in remanding the case in such circumstances. It is noted that the learned CIR(A) has passed order-in-appeal without applying his judicious mind and has failed to consider the arguments submitted by the A.R. of the registered person. In these circumstances, the learned CIR (A) was not justified in remanding the case. However, taking a lenient view and in the interest of justice we deem it appropriate to vacate the impugned order-in-appeal passed by the learned CIR(A) and remand back the case to the learned CIR(A) to pass speaking, elaborate and well-reasoned order after conducting necessary verification/enquiry and after affording full and fair opportunity of being heard to both the parties.
12. The appeal filed at the instance of Appellant/Department is disposed in the manner referred to above.