SHAHID MASOOD MANZAR (JUDICIAL MEMBER).---The appellant through this appeal has challenged the sales-tax Order-in-Appeal No,63/2016-17 dated 13.10.2016 passed by the learned Commissioner Inland Revenue (Appeals-III), RTO, Rawalpindi, whereby he rejected the appeal. The appellant has now contended that:-- "..2) That the assessing officer was failed to mention specific provision of law in which the order passed by the learned ACIR, which is not appreciable by the apex court.
3)That the appellant deals in "used auto parts/scrap" where the provisions of Rule 58T of Sales Tax Special Procedure Rules, 2007 does not apply. Hence, the entire proceeding is based on wrong principle which is unlawful and against the basic principle of natural justice.
4) That both the authorities below decide the instant case while considering "auto parts" and "used auto parts" being the same thing (as assessed under PCT heading 8708.9990), however, the directorate General of Customs valuation categorically differentiate between the both. Hence, the contention/ understanding of both the authorities below are not correct and against the facts of the case.
Reliance: Valuation Ruling No,D(v)Misc/1/2006 Dated 03/11/2006 Valuation Ruling No,711/2015 Dated 29/01/2015 5) That the Appellant/taxpayer imported Goods under HS Code 8407.3400, which is not covered within the definition of "Auto Parts and Accessories" as mentioned in Sr. No,4 of Chapter XIII of Sales Tax Special Procedure Rules, 2007.
6) That under sub-Rule (8) of Rule 58T of Sales Tax Special Procedure Rules, 2007, the person who engaged in sales and purchase of such goods shall file quarterly sales tax return. However, the appellant being not falls/covered under provisions of Rule 58T file his sales tax return on monthly basis.
7) That supply to end consumers the further is not applicable in applicant's case under S.No,5 of the S.R.O. 648(1)2013 dated 09.07.2013. Whereby the competent authority has directed not to charge, levied or paid further tax @ 1% on taxable supplies made to end consumers. Hence, the chargeability of further tax is unlawful and against the facts of the case.
8) That the imposition of penalty under section 33 and default surcharge under section 34 of the Act is unlawful and without any jurisdiction.
9) That the learned assessing officer failed to establish the element of mens-rea which is mandatory condition of imposing the penalty."
2. Brief facts of the case as per impugned orders are that during scrutiny of sales tax returns of the appellant for the period 10/2013 to 12/2015, it was observed that being importer of auto parts, the appellant failed to pay extra sales tax of Rs,2,474,307/- @ 2% of the value of supply in violation of sections 3(5), 6, 7, 8, 22 and 23 of the Sales Tax Act, 1990 read with Rule 58T(1) of the Sales Tax Special Procedure Rules, 2007 as amended vide S.R.O. 896(1)/2013 dated 04.10.2013. It was further observed that the applicant made taxable supplies for the value of Rs,2,675,447/- to un-registered persons during the months of 7/2013 and 8/2013 but failed to pay further tax of Rs,26,754/- in violation of sections 3(1A), 6(2), 22, 23 and 26(1) of the Act ibid. Therefore, show-cause notice was issued for violation of above provisions of law confronting recovery of the above amount along with default surcharge and penalty. Contravention proceedings so initiated culminated in passing of the impugned order whereby above amount was established and held to be recoverable. The taxpayer being dissatisfied with order of Assessing Officer, filed appeal before the learned CIR(A), who vide his impugned order dismissed appeal in the following manner:-- "I have perused the impugned order, grounds of appeal and submissions tendered by the AR and DR. The learned counsel for the appellant argued that extra tax and further tax was not payable in case of supply of used auto parts. It has been contended that the provisions of S.R.O. 896(1)12013 dated 04.10.2013 were not applicable in his case as he has imported and supplied "Used Auto Parts" whereas, the description of goods has been specified in the said S.R.O. as "Auto Parts". In this regard, it has been observed that the description of goods at serial No, (4) of the Table of said notification has been specified as "Auto Parts and Accessories". Thus, no distinction has been made between "Used" and "new" auto parts for the purpose of chargeability of extra tax. Therefore, the stance of the appellant has not been found tenable. As far as the issue of non payment of further tax is concerned, the stance of the appellant has not been found supported by any evidence. Hence, the order passed by the assessing officer is confirmed and the appeal accordingly stands rejected being devoid of merit."
Being dissatisfied with the above findings of learned CIR(A), the instant appeal has been filed by appellant before this Tribunal.
3. During the course of hearing, learned counsel for the taxpayer appeared and reiterated the grounds of appeal. In support of his contention, he furnished the copies of Notification of Sales Tax bearing S.R.O. No,896(1)/2013 dated 04.10.2013 by submitting that provisions of said S.R.O. were not applicable in his case as he has imported and supplied "Used Auto Parts" whereas, the description of goods has been specified in the said SRO as "Auto Parts". He further in support of his version furnished Valuation Ruling No,711/2015 determining the customs values of old and used auto parts.
Accordingly, he prayed that the impugned orders of the authorities below may be annulled.
4. In rebuttal, the learned DR, Mr. Muhammad Akram, representing the Department, vehemently opposed the contention of learned AR. He submitted that the Valuation Ruling No,711/2015 relied by the learned AR relates to the custom valuation of old and used auto parts, which is not applicable in the instant case as the case in hand is of sales tax; not of the custom, however, S.R.O. 396(1)/2013 dated 04.10.2013 quoted by the learned AR is only for sales tax which has rightly been applied to the appellant's case as there is no bifurcation between used and new auto parts in the description of goods in said SRO. By supporting the impugned order of learned CIR(A), learned DR submitted that the learned CIR(A) while passing impugned order also confirmed that no distinction has been made between "Used" and "new" auto parts for the purpose of chargeability of extra tax.
Accordingly, he prayed that the appeal may be dismissed being devoid of any merit.
5. We have heard both the parties and perused the relevant record of the case. The appeal mainly revolves around the question that whether the provisions of S.R.O. 896(I)/2013 dated 04.10.2013 are applicable to instant case or not? We have to resolve the aforesaid matter. The learned AR of the taxpayer during the court proceedings furnished the copy of valuation Ruling No,711/2015 which determines the customs values of old and used auto parts. He submitted that in the aforesaid Ruling clear distinction has been made in new and used auto parts, however, in the S.R.O.
896(I)/2013 dated 04.10.2013 there is only mention of Auto Parts and accessories, therefore, he submitted that the same is not applicable in the appellant's case, as the appellant deals in only used auto parts. The learned DR on other hand, vehemently opposed the contention of learned AR and added that the appellant is not the only one which has been charged with extra tax, but there are number of other taxpayers from whom extra tax has been recovered in accordance with the said SRO. We have considered the submissions of both the sides. We have observed that firstly the taxpayer submitted copies of bills of its different customers/traders by stating that the appellant deals in only used auto parts. Perusal of said bills shows the name and style of the appellant as "G.F.Z. AUTO PARTS". We have not seen any word like used/old auto parts in whole the bills. The appellant if claims to be the trader of used auto parts, he should first rename its name/style from auto parts to used/old auto parts. The appellant claiming that he is dealing in used auto parts with name/style of Auto parts challenges the SRO; that it is only for auto parts and not for used/old auto parts; is beyond acceptance. Secondly, as regards submission of custom valuation, we do not find any weight in the arguments of learned AR as the valuation determination submitted by the AR relates to Custom, however, this is the case of sales tax, therefore, the S.R.O. 896(I)/2013 dated 04.10.2013 has been applied rightly because the same is of sales tax. Perusal of the said S.R.O. shows that only one category has been mentioned at Sr.4 "AUTO PARTS and ACCESSORIES", which means that no bifurcation has been made between the used and auto parts. In our considered view, where there is no bifurcation made between the used/new auto parts, it is considered to be applied in both. However, the legislature while making the said SRO should have described in clear words of "used/old" and "new" for sake of swift understanding of the taxpayers. We concur with the findings of learned CIR(A), who has rightly dealt with the matter and the order needs no interference at this stage. The appeal is accordingly disposed off in the above manner.
Ordered accordingly.