Messrs KARSAZ (PVT.) LTD., KARACHI vs ADDITIONAL COMMISSIONER INLAND

ORDER

MUHAMMAD JAWED ZAKARIA, JUDIC IAL MEMBER.--- The appeal has been filed by the Taxpay er / Appellant / Applicant assailing the Order No, 67/2017 dated 22-06-2017 passed by the learn ed CIR(A) Zone-II Karachi. First we intend to dispose of the Miscellaneous Application (AG) whereby the Taxpayer has in addition to the original ground of appeal, has raised the following additional grounds of appeal: ADDITIONAL GROUNDS OF APPEAL

1. "That the prerequisites for a show-cause notice as required by law have not been served to our client, therefore no straight forward notice under section 11 of Sales Tax Act, 1990 could be issued as mentioned in Section 25(3) of Sales Tax Act, 1990 is reproduced for your reference: 25(3) After completion of the audit under this section or any other provis ion of this Act, the officer of Inland Revenue may, after obtaining the registered person's explanation on all the issues raised in the audit shall pass an order under section 1 1.

[Emphasis is ours] The learned Add. CIR has wrongly assumed jurisdiction to make out and to adjudicate upon the instant case under Section 11 of Sales Tax Act, 1990, whereas the statute directs that certain acts shall be done by a specified person, his performance by any other person is impliedly prohibited therefore whole exercise of issuance of SCN and passing of adjudication order by the learned Add.CIR may be declared illegal, void ab initio and without lawful jurisdiction.

2. That Lahore High Court in a Petition No, 37295 of 2016, Hamza Nasir v. Federation of Pakistan , decided that only Commissioner has the powers to issue the notice under section 11 of the Sales Tax Act, 1990. Lahore High Court while deciding the above in many other petitions set the precedence followed the precedence set by Islamabad High Court in a case 2016 PTD 2332 on same issue, as under:

18. It is settled law that a delegate cannot further delegate its powers unless expre ssly authorized under the law. It is also settled law that in order to enable a person to delegate the powers or functions, there must be an authority , expressed or implied, to delegate. When power is conferred on a particular person, then that person alone has to exercise the powers and cannot transfer its exercise to another person. The august Supreme Court in the case titled 'Muhammad Ashraf Tiwana and others v. Pakistan and others' [2013 SCMR 1159] while examining the power of appointment of Commissioners vested in the Federal Government under the Securities and Exchange Commission of Pakistan Act, 1997, observed and held that it was well-settled law that a statutory delegate could not sub-delegate his or her powers. It would also be pertinent to quote relevant paragraph form the celebrated treatise titled 'De Smith's Judicial Review' Seventh Edition as follows: "a discretionary power must, in general, be exercised only by the public authority to which it has been committed. It is a well-known principle of law that when a power has been conferred to a person in circumstances indicating that trust is being placed in his individual judgment and discretion, he must exercise that power personally unless he has been expressly empowered to delegate it to another ."

The Indian Supreme Court in the case titled 'Sahni Silk Mills (Pvt.) Ltd. and another v. Employee's State Insurance Corporation [(1994) 5 Supreme Court Cases 346] has held as follows:-- "By now it is almost settled that the legislature can permit any statutory authority to delegate its power to any other authority , of course, after the policy has been indicated in the statute itself within the framework of which such delegate is to exercise the power . The real problem or the controversy arises when there is sub-delegation. It is said that when Parliament has specific ally appointed authority to discharge a function, it cannot be readily presumed that it had intended that is delegate should be free to empower another person or body to act in its place."

19. In the light of the above, the order dated 23.03.2014 issued by the Commissio ner Inland Revenue was without lawful authority and jurisdiction. The board had expressly conferred the power of adjudication under the Act of 1990 on the Commissioner vide order dated 21.01.2014. The latter had no authority or jurisdiction to further delegate the power and jurisdiction of adjudication conferred by the Board vide order dated 21.01.2014. It is settled law that if the basic order is void, then any superstructure built thereon is also illegal and liable to fall. The Inland Revenue Officer was, therefore, not vested with power not had the jurisdiction to issue a show-cause notice under section 11 of the Act of 1990. The Commissioner alone was vested with power and jurisdiction under section 11 of the Act of 1990, pursuant to the Board's order dated 21.01.2014.

3. That it is humbly submitted to accept the additional grounds as a taxpayer may file / submit any additional grounds any time before the conclusion of the hearing, reliance may be placed on a Lahore High Court Judgment of Haji Meher Din v . Commissioner of Income T ax [2002 PTD 541 (LHC) to the following ef fect! "the word "additional grounds" itself implies that a ground not already taken was being stressed. There would be a number of reasons for not taking grounds in the memo. of appeal despite its availability . It can start from inadvertence to end at negligence. Whatever be the reason when a lis is pending before a Court or a judicial forum, entertainment of an additional ground should be a rule and not an exception. Unless the purpose for making of additional ground is either to delay the proceedings or is to cause embarrassing to the parties or the Presiding Officer an additional ground must not be refused provided, it is made or raised before conclusion of hearing. Even in case where a hearing is complete but the order is not announced an additional ground should not ordinarily be refused except for the reasons noted above..........."

4. That Lahore Appellate Tribunal in an Appeal I.T.A. No, 2242/LB/2016 and others Messrs Saeed Brothers Steals and Re-Rollings Mills (Pvt.) Ltd. v. CIR RTO, followed the precedent set in the case of Messrs Siddique Enterprises v. CIR (Appeal), R TO Faisalabad by Faisalabad Appellate Tribunal as under: "....we are of the considered opinion that any legal issue can be raised at any stage of adjudication of the case and the taxpayer has ,all right to raise any new or additional legal issues for the first time before the Appellate Tribunal even though not set forth in the memorandum of appeal filed before this Tribunal or even if it had not been raised before the original stage of adjudication or at the time of first appeal before the CIR (Appeals) and when any such new or additional ground is raised before the Tribunal, it is duty bound to entertain that ground and render a decision thereon..."

2. As the above Additional grounds of appeal go to the very root of the case which do not further require any investigation of facts, therefore, we grant the above Miscellaneous Application and our findings on the above grounds will be recorded in the subsequent paras of this Order .

FACTS

3. Brief facts of the case are that the Taxpayer/ appellant is duly registered under Sales Tax Act vide STRN 1223999928355 and engaged in the business of importer and trader of spare parts as well as of the machinery . It was alleged by the ADCIR the Appellant has claimed input of suspended / blacklisted taxpayers during the noticed period within the meanings of various provisions of "the Act" and the Rules made thereunder . The ADCIR as is borne out from the impugned order dated 17.3.2017, is alleged to have reviewed the consolidated record / information of multiple years submitted by appellant, and arrived at a finding that the appellant have purchased from various blacklisted / suspended taxpayer during the notice period and liable to pay Rs,15,885,818/- to the exchequer . It was further alleged by the ADCIR also alleged that "online tax profiles of the Appellant's suppliers show that suppliers of the appellant were blacklisted and the Appellant have made purchases from the suppliers during the Tax period of June-201 1 to June-2016. Thus the appellant contravened sections 3, 7, 8 and 21 of "the Act". The appellant were called upon to show-cause under section 11(2) of "the Act", as to the Sales Tax liabilities of Rs,66,733,045/- may not be recovered in addition to the liability of default surcharge under section 34 of "the Act" and as to why penalties under Sections 33(3), 33(5), (11c), and (13) of "the Act" should not be imposed for violation of sections 3, 6(1), 7A and 11 of "the Act" and have indulged in activities under purview of Section 2(37) of "the Act" ibid. In response thereto the Appellant appeared through their Legal Counsel the office of respondent on 24.11.2016, 15.12.2016, 01.02.2017, 07.02.2017, 15.02.2017, 24.02.2017 and 07.03.2017 and written as well as oral submission were made on the allegation of the "SCN" That "SCN" served to the appellant under section 11(2) of "the Act" by the Addl. Commissioner (ADCIR / Addl. CIR) without selection of case under Audit by the Commissioner Inland Revenues (CIR) under section 25 or by the Board under section 72B of "the Act". The documents were produced to the officer under the protest and case was agitated on the ground that taxpayer was neither selected by CIR and SCN under section 11(2) may be issued after a detaile d audit under section 25 of "the Act". The explanation offered by the taxpayer did not find favour with the Addl. CIR who passed the impugned order-in-original and raised a demand of Rs, 15,885,818/- as Rs, 15,596,694/-on account of purchases made from the Blacklisted Suppliers, Rs, 279,124/-on account of supplies made to the Blacklisted registered person and Rs,10,000/- on account of violation of "Annexure F" in monthly sales tax returns. Being aggrieved from the order passed by ADCIR, the taxpayer field appeal before the learned CIR (A), who vide order mentioned above remanded back the case to the Of ficer, hence, the instant appeal before this Tribunal.

ARGUMENTS - TAXPAYER'S COUNSEL

4. The learned counsel exhaustively argued on the following points: JURISDICTION OF THE COMMISSIONERS

5. The learned counsel argued on jurisdiction of the Commissioner and submitt ed that it is also a well-settled principle of law that where a particular authority has exclusive vested with jurisdiction to proceed with a case, any attempt by any other authority to take cognizance of the matter or to institute or to initiate proceedings would render cognizance and proceeds illegal, void ab initio and of no legal effect and the Hon'b le Lahore High Court in W.P.No, 37295 of 2016. He further submitted that the Hon'ble Lahore High Court has not simply followed the judgment of Islamabad High Court but Hon'ble Lahore High Court has also given its own reasoning. The learned counsel, in support of his contentions, strongly placed reliance on the following judgments: a) 2018 PTD 1071 [Hamza Nasir W ire v. Federation of Pakistan ] b) 2018 PTD 1251 now reported as -[Punjab Beverages Limited v . FBR] c) S.T .A. No, 994/LB/2017 dated 2.3.2018 [Messrs Fatima Fen. Limited] d) S.T .A. No, 668/LB/2017 dated 18.01.2018 [Messrs Coca Cola Beverages (Pvt.) Ltd.].

6. The learned Add. CIR has wrongly assumed jurisdiction to make out and to adjudicate upon the instant case under Section 11 of Sales Tax Act, 1990, whereas the statute directs that certain acts shall be done by a specified person, his performance by any other person is impliedly prohibited therefore whole exercise of issuance of SCN and passing of adjudication order by the learned Add. CIR may be declared illegal, void ab initio and without lawful jurisdiction.

Order-in-original ["OIO"] was passed without assuming jurisdiction as per law and without notice and / or Audit under section 25

7. The learned counsel for the taxpayer vehemently contended that the prerequisites for a show-cause notice as required by law have not been served to The tax payer/appellant, therefore no straight forward notice under section 11 of Sales Tax Act, 1990 could be issued and passed order under section 11 as mentioned in Section 25(3) of Sales Tax Act, 1990 is reproduced for ready reference:-- "25(3) After completion of the audit under this section or any other provision of this Act, the officer of Inland Revenue may, after obtaining the registered person's explanation on all the issues raised in the audit shall pass an order under section 1 1,"

Moreover , Paragraph No, 42(b) of Sales. Tax General Order No, 3 of 2004 dated 12.06.2004 , the person whose audit has to be conducted should be informed about the audit and details of the records to be audited at least fifteen (15) days before the scheduled date of audit; that no prescribed notice/intimation was issued by the Commissioner .

8. The learned counsel argued that it is a trite law that any transgression of jurisdic tion not being a technical defect would render entire exercise of authority to be illegal and ab initio void. It has been observed that the question of jurisdiction in 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 merits, is not sustainable under law. The show cause is based on casual proceedings instead of the audit of the prescribed record under Section 25(3) of the Act, hence, it is vague and void and all demand stand illegal.

"OIO W AS P ASSED ON DEFECTIVE SHOW -CAUSE NOTICE (SCN)

9. The show-cause notice, which is foundational document is defective in its form and substance on the followings:- -

(A) LACK OF JURISDICTION The SCN served to the Appellant does not carry any reference to assuming jurisdiction under the law whereas as per due procedure of law the officer of Inland Revenue has to refer the empowering part of the law and/or delegation of power by the Commissioner whereas the whole show-cause notice is silent on it. The question of jurisdiction may be raised at any stage. Such question being very important and fundamental in nature, if a forum had no jurisdiction, the same could not be conferred upon it by even consent of parties. Court had to consider the question of jurisdiction even though not raised by the parties. Point of jurisdiction is one which is not barred even at the ultimate stage before Supreme Court.

(B) ROVING INQUIR Y

10. The learned counsel submitted that in the SCN served to the appellant reflect that there is no month wise, party wise break up available with revenue and had been asked to produce the same as it was obligatory on the part of the appellant to provide all the documentary evidence particularly records. Stand of the revenue appears to be that such working should have been provided by the taxpayer as the adjudication officer had nothing on the subject and record. Such admission evidently proved SCN is nothing but a casual correspondence and a roving enquiry which is prohibited by law. There is nothing but a guess work and inferences instead of evidence, which is not sustainable under the law . There are plethora of judgments, but he mainly placed on followings judgments: 2011 PTD 808 (Trib.); 2011 PTD (T rib.) 773 In a Judgment reported as [ 2013 PTD 1536 ] Lahore High Court observed as under:-- "Show-cause Notice, is a foundational document , which is to comprehensively describe the case made out against the taxpayer by making reference to the evidence collected in support of the same . It is the narration of acts in the show-cause notice along with the supporting evidence which determines the offence attracted in a particular case.

Show-cause notice is not a casual correspondence or a tool or license to commen ce a roving inquiry into the affair of the taxpayer based on assumptions and speculations but is a fundamental documents that carries definitive legal and factual position of the Department against the taxpayer ."

That no lawful life could be given to a show-cause notice which violated all norms of justice and fair play. In support of his arguments he also placed reliance on:-- 2011 PTD (Trib.) 808; 2013 PTD (Trib.) 2344; Abdul Rauf and others v. Abdul Hanif Khan and others , 2013 PTD 1536 .

The SCN covered a period of June, 2011 to June, 2016 i,e, five years. That until July 2012 Section 36(2) remained operative and accordingly three years time has been mandated for reckoning time barred of the matter to be adjudicated, accordingly the year/period 30.06.2012 has already hit by time barred.

11. The Finance Act, 2012 has replaced the provision of Section 36 thereby delet ing the provision of the section, presently Section 11 is operative and for assessment of sales tax provisions contained in shall be operative. The impugned demand of Rs, 15,596,694/- on account of alleged input tax claimed, Rs,279,124/- on the basis of further tax is illegal and contrary to law and facts of the case, the learned counsel went on to stress that:

(i) The practical cases, in support of the application of the aforesaid provision of law , were capriciously sidetracked.

(ii) Even otherwise, adverse action agains t a registered person on account of defect or default of someone else is illegal. 2011 PTD (T rib.) 773 .

(iii) The other issue is the choice of opting for criminal proceedings against a particular taxpayer and letting to the other . This pose a problem and amount to vesting unstructured and unregulated power in the hands of the department, once again threatening the sanctity of fair trial. Any such unguided and uncontrolled exercise of power will not withstand the constitutional test of fairness and equality under Article 25 of the Constitutional. A more wholesome, transparent and standardised system needs to be evolved by the FBR to avoid this unconstitutionality .

12. Regarding claim of input tax the learned counsel argued that in the order-in-original, the taxation officer disallowed the claim regarding input tax adjustment of the taxpayer as was found to be attributable to invoices issued by suppliers having suspended Registration / black-listed registration status. It is argued that the impugned show-cause notice was since vague, therefore not unsustainable. In this respect, it is contended that party- wise and transaction-wise detail was not confronted to the taxpayer and accordingly , the order of the Addl. CIR is liable to be vacated, being contrary to well-settled principles of law .

13. With regard to the merits, the learned counsel argued that the action of the authority below is even otherwise not lawful as at the time when transactio ns were executed with the respective suppliers they were fully complaint and active, therefore, any subsequent status assigned to such suppliers by the revenue could not disturb past and closed transactions. In this regard, reference may be made to the judgment of the Hon'ble Lahore High Court in Writ Petition No, 17135/13: Galaxy Textile Mills Ltd. v. Federation of Pakistan etc. wherein the following principles were settled:- "The status of the buyer existing at the time of supply of the goods by the petitioner shall be considered while deciding the show-cause notice and not the status attained by the buyer subsequently ."

14. He then submitted that even otherwise, the appellant has fulfilled the requirements of section 7(2)(i).

(i) A registered person shall not be entitled deduct input tax from output tax unless,--

(i) in case of a claim for input tax in respect of a taxable supply made, he holds a tax invoice in his name and bearing his registration number , in respect of such supply for which a return is furnished: Provided that from the date to be notified by the Board in this respect, in addition to above, if the supplier has not declared such supply in his return or he has not paid amount of tax due as indicated in his return.

15. Challenging on jurisdictional plane, he vehemently asserted that the order-in-original, creating colossal demand of Rs, 15,885,818/- is passed without any fact finding enquiry / investigation and without ascertaining the correct facts, this is nothing but merely with a view to Meeting collection targets. It is also submitted that the impugned order , passed with mala fide intent, was by its nature an act without jurisdiction; hence, liable to be annulled . In this connection. reliance placed on 1999 PTD 1892 Attock Cement Pakistan Ltd. v. The Collector of Customs . The Hon'ble Court has laid down the following principles:-- "The perusal of these facts and circumstances also leads us to believe that the extraordinary zeal was being shown by the respondents to somehow charge the appellant company with the amount of deductions made along with the additional tax and penalty . In our view , such demand is otherwise than in accordance with law and we cannot also help to observe that such demand was being made by an impatient department with a view to achieving the target of recovery of revenue and, therefore, in our view the demand was mala fide as well".

16. Further reliance was placed on the judgment of the Hon'ble Lahore High Court in its judgment dated 22-11- 2012 in W.P. No,3515 of 2012 titled D.G. Khan Cement Company Ltd. v. The Federation of Pakistan and others PLD 2013 Lah. 93 wherein the following principles have been laid down:-- "Every person has a separate legal character enjoying distinct rights and liabilities under the law. To impose the liability of one over the other is opposed to basic fundamentals of law and offends due process, logic and rationality . '

RETROSPECTIVE APPLICA TION OF LA W ON SUBSEQUENT BLACK LISTING OF P ARTIES

17. The learned counsel vociferously contended that during the hearings time and again and as also alleged in the show-cause notice that the appellant had purchased from the black-listed parties during the Noticed period. As per the scrutiny of record the appellant observed that all parties which have been black listed by the FBR were on active taxpayer list of FBR at the time of transactions which were made with due care and after reasonable scrutiny for which status of all parties were produced before the adjudicating officer via reply No, NHQ/Misc/ 074/02/2017 dated February 08, 2017 , which neither even appreciated nor was discussed in impugned Order . It is well-settled that subsequent black-listing of supplier could not be made a tool to deprive the registered person of a valuable right accrued in his favour for purchases or transactions made prior to the suspension of registration of such supplier . Reliance may be placed on 2011 PTD 866 : "Subsequent blacklisting of a supplier could not be made c tool to deprive the registered person of a valuable right accrued in his favou r for purpose of transactions made prior o the suspension of registration of such supplier"

In this regard, the learned counsel cited the land mark judgment of August Supreme Court of Pakistan in case of "Government of Pakistan v. Messrs Village Development Organization" reported as 2005 SCMR 492 wherein it has been laid down that; it is a well-settled principle of law that the executive orders or notifications, which confer right and are beneficial, would be given retrospective effect and those which adversely affect or invade upon vested right cannot be applied with retrospective effect

18. It was submitted by the learned counsel that learned officer erred in taxing further tax of Rs, 279,124/- being tax under section 3(1A) on the basis of Subsequent Blacklisting of the purchaser of the Appellant. The SCN was served on 18.11.2016 whereas the vendor of the Appellant blacklisted / unregistered in January 2017, it was treated as ab initio un-registered and further tax was charged while passing an Order and no such grounds were taken while issuing "SCN" which is again illegal and liable to be nipped in the bud as it is a well settled principle that the Ground which is not mentioned in SCN cannot be adjudicate.

19. The learned counsel urged that the Addl. CIR erred in appreciating that substantive laws would always be prospective while the procedural matters would be retrospective, but where the procedural laws affected past and closed transactions or existing, accrued, concluded, vested or substantive rights, the same would not be retrospective unless and until the statute expressly provided for retrospective application of the law .

SECTION 8A. JOINT AND SEVERAL LIABILITY OF REGISTERED PERSON IN SUPPL Y CHAIN WHERE TAX UNPAID "Where a registered person receiving a taxable supply from another registered person is in the knowledge or has reasonable grounds to suspect that some or all of the tax payable in respect of that supply or any previous or subsequent supply of the goods supplied would go unpaid, of which the burden to prove shall lie on the department , such person as well as the person making the taxable supply shall be jointly and severally liable for payment of such unpaid amount of tax."

20. In order to provide safe guard to the property and rights of a citizen as envisaged in the Constitution of Pakistan, 1973, the legislation has consciously made a registered person while receiving a taxable supply obligatory to have knowledge or to have any reasonable grounds to suspect at the time of making payment of sales tax to the supplier that in chain of supply , certain tax will go unpaid as envisaged under section 8A of the Sales Tax Act, 1990, The provisions of section 8A simply requires that the buyer should have the "knowledge" and "reasonable grounds" to suspect that the supplier will not eventually deposit the sales tax in the national exchequer paid by him and in order to attract the provisions of section 8A of the Act, initial burden lies on the department to establish that the taxpayer had prior "knowledge" and "reasonable grounds " to suspect the supplier that sales tax paid to him shall be remaine d unpaid in its eventuality and then proceed Against the taxpayer .

The Appellant under the prescribed mech anism of value added tax (VAT), has made payment of input tax to his supplier and he had no access to confir m that the alleged supplier had made the payment in the Government treasury or not. The Appellant receiving taxable supplies was legally obliged to check validity and veracity of the supplying person through electronic verification which was obviously done at, the time of transactions. This was the duty of the tax functionaries to check as to whether the supplier had made payment of tax due to them especially when he was filing his monthly sales tax returns and summaries of sales and purchases with the department. The impugned show-cause notice does not disclose that the Appellant was in knowledge or had reasonable grounds to suspect that some or all of the tax payable in respect of supply or any previous or subsequent supply of the goods supplied would go unpaid, therefore, liability to pay tax jointly and severally under section SA of the Act would come into play only when it is established with corroborating material evidences that where registered person receiving taxable supply from another registered person is in the knowledge or has reasonable grounds to suspect that some or all of the tax payable in respect of that supply would go unpaid. The Appellant, after verifying the status and genuineness of the supplier from e-portal of FBR, made the payments of input tax to them and fulfilled all the legal responsibilities on his part and after adopting of method for making payments as is prescribed by the law, has discharged his onus so no responsibilities lies on the Appellant's shoulders to haunt his suppliers depositing their liabilities in the Government exchequer or not. Mere allegation that the alleged suppliers are blacklisted, suspended and fake is not enough and corroborating evidence for denying the lawful right of input tax of the buyer . Therefore, the Appellant cannot be evolved as a joint liable and induction of contravention does not qualify . The Order of ATIR in case 2016 PTD (T rib.) 1877 Karachi Bench also support our contentions reproduced as follows:-- "7. From perusal of the above findings of the learned CIR(A) it is evident that learned CIR(A) has discussed the issue aptly. Further the provisions of Section 8A simply requires that the buyer should have the "Knowledge" and "reasonable grounds" to suspect that the supplier will not eventually deposit the sales tax in the national exchequer paid by him and in order to attract the provisions of section 8A of the act, initial burden lies on the department to establish that the taxpayer had prior "knowledge" and "reasonable grounds" to suspect the supplier that sales tax paid to him shall be remained unpaid in its eventuality and then proceed against the taxpayer . The respondent, in the present case, under the prescribed mechanism of value added tax (VAT), has made payment of input tax to his supplier and he had no access to confir m that the alleged supplier had made the payment in the Government treasury or not. The respondent receiving taxable supplies was legally obliged to check 'validity and veracity' of the supplying person through electronic verification which was obviously done at the time of transactions. This was the duty of the tax functionaries to check as to whether the supplier had made payment of tax due to them especially when he was filing his monthly sales tax returns and summaries of sales and purchases with the department. The impugned show-cause notice does not disclose that the respondent was in knowledge or had reasonable grounds to suspect that some or all of the tax payable in respect of supply or any pervious of subsequent supply of the goods supplied would go unpaid, therefo re, liability to pay tax jointly and severally under section 8A of the Act would come into play only when it is established with corroborating material evidences that where registered person receiving taxable or has reasonable grounds to suspect that some or all of the tax payable in respect of that supply would go unpaid. The position in the present case is very much different because the respondent, after verifying the status and genuineness of the supplier from e-portal of FBR made the payments of input tax to them and fulfilled all the legal responsibilities on his part and after adopting of method of making payments as it prescribed by the law, has discharged his onus so no responsibilities lies on respondent's shoulders to haunt his supplier depositing their liabilities in the Government exchequer or not. Mere allegation that the alleged suppliers are blacklisted, suspended and fake is not enough and corroborating evidence for denying the lawful right of input tax of the buyer . Therefore, the respondent cannot be evolved as a joint liable and induction of contravention does not qualify . As a joint liable and induction of contravention does not qualify . Reliance is placed on the judgment of the Hon'ble Lahore High Court in case of Messrs D. G Khan Cement Company Ltd. v. The Federation of Pakistan and others " in Writ Petition No, 3515 of 2012, PLD 2013 Lah. 693 wherein it was laid down as under:-- "It is also important to refer to section 8A of the Act, which deals with a complete new specie of violation of law i,e,, non-deposit of tax in the government treasury by the supplier . This does not cast any allegation of collusion on the part of the buyer or supplier but simply requires that the buyer should have had "knowledge" that the supplier will not (eventually) deposit the sales tax in the exchequer . The department has to established that the taxpayer had "knowledge" and the proceed against the taxpayer . The impugned show-cause notice does not, however , set up a case against the petitioner under this provision of law. Section 8-A is different from Section 8(1)(ca) and is triggered by the requirements of "Knowledge" of the past practice of the supplier".

"It is well-settled that a notification or an executive order adversely affecting the right of any person cannot operate retrospectively but if the same confers any benefit it can be made applicable retrospectively".

9. Now it is well-settled that subsequent blacklisting of supplier could not be made a tool to deprive the registered person of a valuable right accrued in his favour for purchases or transactions made prior to the suspension of registration of such supplier . Having taking regard to the facts of the case in its entirely and after respectfully following the ratio settled in the referred judgments cited supra, we have no option except to reach the conclusion that Revenue has failed to prove the allegation leveled against respondent that they claimed inadmissible input tax adjustment on the basis of invoices issued by their suppliers which were blacklisted subsequent to the transactions made by the respondent. In this view of the matter the order of the learned CIR(A) is maintained." Applying to the ratio decided in the case supra, which settled the controversy and support the contention of the taxpayer that at the time of transactions with the suppliers are active and at that time of transaction and even at the time of claim had no Knowledge and reasonable grounds, as envisaged in the law that these two pre-requisites had to be established to acquire jurisdiction under section 8 to disallow inputs claimed whereas in taxpayer's case no such Knowledge or reasonable grounds to suspect that ultimately sales tax paid will not be deposited by their supplier existed at the transaction time. The Hon'ble ATIR in judgment reported as 2014 PTD (Trib.) 558 Commissioner Inland Revenue, Faisalabad v . Messrs Chenab Board, Faisalabad observed as under:-- "For claiming adjustment of input tax by a taxpayer under clause (1) of subsection (2) of section 7 of the Act, he should hold a taxable invoice duly issued by his supplier under section 23 of the Act and the claimant should have paid the amount of the goods including tax shown in the invoice through negotiable instrument as per expression of section 73 ibid, the respondent, is holding valid taxable invoices and payment against those to the supplier was also made strictly in terms of section 73 of the Act. The department has not been able to place on record any evidence by which it can be inferred that the invoices issued by the supplier were fake. Any action which is based upon no evidence is not permitted by any law of the land. The respondent has nothing to do with the act and commission of his suppliers under any provisions of the Act neither the responden t is obliged under any other law to defend the acts or omissions of his suppliers. The respondent, who has admittedly paid the input tax covered by the invoice, cannot be denied the statutory right of claiming its adjustment."

21. It is also worth mentioning that the Appellant as per scheme of law by paying sales tax to the suppliers had discharged their statutory duty and may not be deprived for the others faults and follies.

FAKE AND FL YING INVOICES

22. The learned counsel vehemently contended that the Hon'ble Lahore High Court in case of "Messrs D.G. Khan Cement Company Ltd. v. The Federation of Pakistan and others" in Writ Petition No, 3515 of 2012 has exhaustively discussed in the matter of Fake and Flying Invoices which also support the contention of the taxpayer .

The observation of the Court are as under:-- "It is also important to refer to section 8A of the Act which deals with a complete new specie of violation of law i,e,, non- deposit of tax in the government treasury by the supplier . This does not cast any allegation of collusion on the part of the buyer or supplier but simply requires that the buyer should have had "knowledge " that the supplier will not (eventually) deposit the sales tax in the exchequer . The department has to establish that the taxpayer had "knowledge" and then proceed against the taxpayer . The impugned show-cause notice does not, however , set up a case against the petitioner under this provision of law. Section 8-A is different from section 8(1) (ca) and is triggered by the requirement of "knowledge" of the past practice of the supplier ."

8. As far as, violation of section 8(1)(d) of the Act is concerned, the provisions of section 8(1)(d) of the Act can only be invoked-in cases where charge of "collusion" or "tax fraud" has been levelled and established by the department as the said provision disentitles a registered person from deducting or claiming input tax adjustment or credit made on the strength of a "fake invoice". The words "fake invoice" has neither collectively been defined in the Sales Tax Act, 1990 nor distinct and individual meanings of each word "fake" and "invoice" has been given therein nor any explanation has been enunciated in the rules made thereunder nor any definition of this expression is provided in defining clauses as given in section 2 of the Act. In the absence of the general or technical definition by the legislature of any word or particular connotations appearing in the Act or the Rules framed thereunder or of any judicial interpretation of that word with reference to the same statute or any other statute in pari materia, one has to resort to the dictionary meaning of that word because reference to standard dictionaries can be the sole assistance in assigning meaning of that word or words. The word "fake" has been defined by the Blacks Law Dictionary 8th Edition to be "something that is not what it purports to be "and "to make or construct falsely" at its page 635. Any invoice duly issued by a registered supplier cannot be purported to be a fake document, once it is established that the same is duly incorporated in sales shown by the supplier in his summary statement and also declared in his sales tax monthly return for the period in question particularly in the cases where its payment is also transacted through banking channel as prescribed under the Act. Conversely , if a registered person holds a tax invoice which is not incorporated in the suppliers records or in its respect payment is also made clandestinely , it can be said that such person is making a fake business transactions. Any invoice that evidences a fake, fraudulent or sham transaction is known as a "fake invoice" and any distortion in taxable supply tainted with "tax fraud" or "collusion" between buyer and seller renders the tax invoice defective and fake as a well establishes principle of law that a party making an allegation must bring material evidences to prove the same but no evidence of tax evasion, issuing of fake invoices or any other commission of tax fraud is put forth on record to substantiate the allegations levelled against the respondent and in absence of which, impugned show-cause notice as well as consequent orders stand illegal and void ab initio.

[Emphasis supplied] BURDEN OF PROOF W AS SHIFTED ON THE APPELLANT

23. That the burden of proof was shifted on the appellant that the Appellant's suppliers were blacklisted / non genuine and liability was adjudicated, without considering the fact that Sales Tax Registration certificates were issued by the department. It is worth mentioning to consider about the issuance of ST Registration without verifying the genuineness of any supplier . The Hon'ble Appellate Tribunal in its judgment reported as [2017 PTD (Trib.) 113 Messrs Kamal Limited v . CIR (A), Faisalabad and others] observed as under: "9. The Sales Tax liability was created against the appellant (hereinafter "the buyer") mainly on the ground that purchases were made from the supplier party who is not traceable and genuine one. After going through the case record, we have found that the learned adjudicating and the first appellate authorities have wrongly placed and shift the burden on the appellant to establish genuineness and veracity of transactions made with his supplier particularly in the circumstances when the initial burden has already been discharged by the appellant by producing sales tax invoices duly issued under section 23 of the Act and registration certificate of his supplier issued under section 14 of the Act. Moreso, when the department has not been able to confirm that the person to whom registration certificate or at the time of purchases made by the appellant. The order blacklisting the supplier party was belated issued much after transaction of purchases and therefore, on the basis of this order , the department cannot state that the purchases of the appellant were not genuine as the time of suspension / blacklisting and the time of transaction is not same but different. The knowledge gained by the department upon suspension / blacklisting of the supplier was not available with the department upon suspension/blacklisting of the supplier was not available with the buyer at the time of transaction to have reason to believe that the supplier will go into default subsequently . Had the department nipped the evil in the bud by not granting the supplier with the sacred registration certificate if he had some reason to believe that supplier commit any tax fraud subsequ ently if the same was allotted in good faith then vigilance should have been catered from very inception by apprehending practice of any tax fraud. Even before or after blacklisting the supplier , it seems that no enquiry has been made by the department instead it adopted a very convenient way of raising a huge liability against the appellant as it is always the buyer from whom coins can be jeopardized in ease. If such an enquiry would have been made and facts would have been brought on record that the supplier did not exist at the time of supplies to the appellant then the action of department recovering amount of input tax refund from the appellant could have been justified. The duty to issue registration certificates after due verification of antecedents and particulars of the supplier was very much lied on the department and if he has not taken care to issue registration certificate after due satisfaction and has gone on issuing certificate to bogus, fake and non-existent party , the responsibility entirely lies upon the department. It is now well settled principle of law that a party should not be made to suffer on account of omission on that a part of the court or other state functionaries."

NON SPEAKING ORDER

24. The learned A.R. strongly contended that the CIR(Appeal) erred in passing a non-speaking order in appeal ["OIA"] on Jurisdiction matter as well as other legal grounds which were taken before the CIR (Appeals) and without deciding / entertaining application under Order 1 Rule 10 of Civil Procedure Code 1908 filed before the Addl.CIR. He referred to application / request which was submitted before the Addl. CIR and was also produced before this Court which runs as under:- "NHQ/Misc/078/02/2017 February 15, 2017 Mr. Mamoon Mo'azzam Additional Commissioner - IR E&C Rage - D. Zone-II Corporate R TO, Karachi KARSAZ (PVT .) LIMITED SHOW -CAUSE NOTICE UNDER SECTION 1 1(2) OF SALES TAX ACT, 1990 FOR TAX PERIOD - JUNE 201 1 TO JUNE, 2016 Sub: Application under Order I of Rule 10 of the Civil Procedure Code. 1908 Dear Sir With reference to the above proceedings initiated against our client for the above period, we on behalf of our above client in continuation of our earlier submission but without prejudice to our client's all the legally and constitutionally guaranteed rights to agitate the matter before any competent forum, wish to state and submit as under:

(1) That is a fact that our above client had discharged its statutory duty by paying sales tax to its suppliers, obtained invoices, maintained record under section 24, filed the returns for the above months under section 26 and offered records for the ensuing audit;

(2) That although our client what at the best could do i.e verifying the status of the supplier at e-portal, Kept proof at the time of transaction when executed and even at the time of filing of the return of sales tax however as claimed by your honor that subsequently those suppliers, due to some other reason to which our client neither had nor have knowledge or any reason to suspect that the sales tax paid to them would not be paid or there are any reasons to suspect that those would be declared as inactive or blacklisted . If it is so adjudication order and or recovery proceedings for their output tax paid be brought on record and moreover what recoveries have been made is again a question of facts and need to be linked up;

(3) That without prejudice to our earlier submission against the show cause it may be brought to your Knowledge that the above subjected law which remain operative in any Civil Proceedings i,e, Order I of Rule 10 provides a power and casts a duty on the adjudicating or deciding officer to make those persons as necessary and proper party to the case; and

(4) That in exercise of the above legal and statutory duty envisaged on your honor we request you to Kindly make those parties being defending parties to the adjudication so that such tax, if any, would be recovered from the parties who have to effectively pay and bear it. W e may add that actually tax has to be paid by the suppliers.

Believing that our earlier submission and even the current submission are bona fide and an attempt to assist you to discharge your statutory duties bestowed under the Sales Tax Act, 1990, however action and or response on this application would definitely pave a way till the disposal of the case and or dropp ing the proceedings against our client (KARSAZ).

Keeping in view the above submission you would let us know any sort of assistance you seek further to complying with the above application under the law .

Last but not least Kindly let us have a hearing else audi alterm partem would be prejudiced.

Thanking you, we remain Yours truly Nisar ul Haq & Co.

Chartered Accountants CC to: Commissioner - IR Zone - II, CR TO Karachi"

He, therefore, contended that non-speaking orders are not tenable in the eyes of law. Reliance placed on following judgments of superior courts: i) That ATIR in S.T.A. No,678/LB of 2011 Messrs R.J. COTT ON WASTE FACTORY, FAISALABAD v.

COMMISSIONER INLAND .REVENUE (ZONE-III), (R.T .O.), F AISALABAD observed as under: "15. The Honourable Supreme Court of Pakistan has time and again disapproved the passing of such perfunctory orders in the causes involving valuable rights of the parties . It is settled law that a quasi-judicial order must be a. speaking order manifesting by itself that the authorities and Tribunal have applied its judicial mind to the issues and the points of controversy involved in the causes. Furthermore, when the reasons would not be forthcoming, obviously the Appellate Court would be deprived of the views of the subordinate forum.

In any way, the impugned order 23-7-201 1, which is not a speaking order and devoid of reasons is not sustainable in law being in contravention of law declared by the Honourable Supreme Court of Pakistan in various cases like Adamjee Jute Mills Ltd. v. The Province of East Pakis tan and others (PLD 1959 SC 272); Gouranga Mohan Sikdar v. The Controller Import and Export and 2 others (PLD 1970 SC 158) and Muhammad Ibrahim Khan v.

Secretary , Ministry of Labour and others ( 1984 SCMR 1014 ), etc."

(ii) The ATIR Lahore in application S.T .A No, 729/LB of 2014 examined as under: "The appeal commissioner is legally obliged to examine this particular contention of the appellant from relevant record and if this contention is found correct then propriety demands that the revenue should allow it to the appellant without any hitch. It is now well-settled law that an authority exercising statutory powers of adjudication / assessment or appeal affecting valuable rights of the parties, shall act as quasi judicial authority and while exercising these powers must pass a speaking order duly supported by reasoning showing due application of mind to facts as well as law applicable. Any order lacking such criteria is not only illegal and without lawful authority but also of no legal effect. The Superior Courts in number of judgments have time and again disapproved the passing of such perfunctory orders in the causes involving valuable rights of the parties and have also settled that in order to maintain the, sanctity of both quasi-judicial and administrative proceedings, it is necessary to maintain oversight on the performance of adjudicating authoritie s whose orders should not be entirely dependent upon the opinions and comments of the assessing officers. The impugned orders, without any iota of doubt, are perverse and improper based on wrong inference drawn by the learned authorities below from the material evidences available on record and thus, the same are patently illegal, non judicious and non-speaking. The basic ingredients of due process of law for passing a 'judicial order' are miserably missing in the instance case of the appellant. A non-speaking and sketchy order cannot be said to meet the requirements of the judicial order , which must contain the contentions raised before the authority by the rival parties and its reasoning based on evidential substance for passing a reasoned order in accordance with the .relevant provisions of the law which is Sales T ax Act, 1990 read with Section 24-A of the General. Claksa Act, 1897."

25. The learned counsel lastly , prayed that based on the aforesaid decisions vis-a-vis the facts of the present case, the learned counsel prayed that the impugned demand including further tax and penalty is, therefore, unlawful, arbitrary and capricious; thus, liable to be deleted and orders of the of ficers below are liable to be vacated.

26. The learned D.R., on the other hand, strongly supported the orders of the officers 'below . At the very outset he raised the following preliminary legal objections: i) It is humbly submitted that the instant appeal is not maintainable as there is no cause of action accrued to the appellant against the Defendants for filing the above noted appeal. Therefore, said appeal is liable to be rejected under O.VII, Rule 1 1 of C.P .C. ii) That during the period of 01.07.2012 to 30.06.2016, there were 40 suppliers of the appellant and out of which 26 of them were either blacklisted / suspended (18 blacklisted + 08 suspended which is 65% of total suppliers. iii) That the amount input tax credit claimed on the basis of invoices issued by such blacklisted/suspended suppliers was approximately 45% of the total input tax credit claim by the appellant and transactions were purposely kept below Rs,50,000/- to avoid compliance of the provision of section 73 of the Sales Tax Act, 1990.

Therefore, it indicates that transactions with such alleged blacklisted/suspended suppliers were only paper transactions. iv) That the appellant was principally involved in import of machinery and spare parts, hence domestic purchases from such alleged blacklisted/suspended suppliers are suspicious. Furthermore, it appears that same was done by the appellant to inflate purchases and likewise to reduce the payable amount in relevant tax period. vi) On the basis of above, it is evident that the appellant has come up with unclean hands and mala fide motives by abusing the process of law , therefore, the appellant do not deserve any remedy . v) As regards to argument of appellant that the Add. CIR had wrongly assumed jurisdiction adjudicate the instant case. In this regard it is elucidated that section 31 of the Sales Tax Act, 1990 empowers the officer of Inland Revenue appointed under section 30 of the Act to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him. vi) That the Federal Board of Revenue has challenged the impugned judgment in Islamabad High Court vide I. C.A.

No, 296/2016. Meanwhile, the Hon'ble Islamabad High Court vide order dated 30.11.2017 has clarified that the impugned judgment shall not be used as a precedent for other cases and shall be adjudged on their merits."

REJOINDER OF THE TAXPAYER

27. Exercising his right of rebuttal of the arguments of the learned D.R. the learned counsel for the Taxpayer had offered following rejoinder/rebuttal which is reproduced verbatim as under:--

(i) The Revenue has requested to reject the taxpayer appeal on the basis of Order VII, Rule 11 by relying that "Plaint can be rejected if suit is barred by law" yet the department has not given any basis for such rejection.

(ii) That the DR has calculated the percen tage of amount disallowed on the basis of assumptions of No of suppliers' without considering the fact that parties were active on FBR profile may have more transaction values rather than suspended/blacklisted. The learned A.R. of the T axpayer further asserted that: The fundamental rights enshrined in the Constitution of Islamic.

Republic of Pakistan, 1973 as Article 4 thereof mandates that to be dealt with in accordance with law is the inalienable right of every citizen and no action detrimental to the property of any person can be taken except in accordance with --law .

(b) That liability to pay the sales tax collected by a seller of goods cannot be shifted to the buyer of goods under section 3(3) of the Sales Tax Act,1990. It is explained that the person who made purchase from another registered person is not supposed to check the record of a person making taxable supplies as to whether he has complied with the provisions of the Sales Tax Act, 1990. It is explained that the person, is not purchases from another registered person is not supported to check the record of a person making taxable supplies as to whether he has complied with the provisions of the Sales Tax Act, 1990 or not. It is obvious that even otherwise, it is practically and impossible for purchaser to undertake any such exercise with reference to all its supplier of goods. The persons who purchases goods from a registered person is only under the legal obligation to check whether person making taxable supplies is registered under the Sales Tax Act, 1990 and OPERA TIVE at the time of transaction . Rest of the responsibility lies basically with the person making taxable supplies and the Sales Tax Department who is supposed to monitor the payment of sales tax. There is no lapse on the part of the appellant as at the time of transactions with the alleged suppliers, they made sure with due care and caution, the existence, and genuineness of the alleged suppliers as under: -

(i) The learned A.R. assured that the names of the suppliers were not in the list of suspected/block listed/de- registered units at the time of supply of subject goods.

(ii) We confirmed the sales tax profile of the suppliers as 'Operative' from the FBR, website/respective Collectorates and they were filing their sales tax returns regularly .

(c) Nevertheless, if at all the suppliers have committed any tax fraud, or any default, it has been done on account of Sales Tax Department's negligence, Mandatory condition precedent for tax fraud is that registered person has acted knowingly , dishonestly or fraudulently and without any lawful excuse comm itted tax fraud. The appellant is not intentional defaulter and was equally cheated by the fraudsters who charged tax from the appellant.

(d) The appellant can claim input tax from the purchases of suppliers who were active at the time of purchase and to support our stance reliance in this regard may be placed on 2013 PTD (Trib.) 892, Messrs Deluxe Packages (Pvt.) Ltd., Karachi v. The CIR, Ad-II, RTO, Karachi , 2010 PTD (Trib.) 1631, Messrs Usman Fabrics, Faisalabad v.

Collector of Sales Tax, Faisalabad, 2012 PTD (Trib.) 453, The CIR, Zone-III, RTO, Faisalabad v. Messrs Kamal Fabrics Faisalabad, and 1984 PTD 216 , Silver Cotton Mills Ltd. v . Commissioner of Sales T ax, (W est).

(e) He, legally , submitted that the sales tax registration should be granted after proper verification and authentication of the antecedents of an applicant. If the sales tax department has been in league with a fraudster , innocent victims like the appellant cannot be penalized.

(f) It is submitted that if at all the suppliers have committed any default, it has happened on account of negligence of Sales Tax Department who are required to grant the Sales Tax registration and authority to collect Sales Tax on behalf of the Government after proper verification and authentication of the antecedents of an applicant. The reliance can be placed on 2002 PTD 1805 (M/s. Kashmir Edible Oils Ltd., Lahore v. Secretary Revenue Division Islamabad) and 1997 SCMR 209 .

(g) That the taxpayer made a victim of fraud perpetuated by the Sales Tax Department and its collaborators who were granted bogus registration and their status was shown operative on FBR's website.

(h) That it is a well-settled principle of law that a party should not be made to suffer on account of act/omission on the part of the court or other state functionaries. The relevant portion from the judgment of the honourable Sindh High Court, Karachi in case of "Messrs Silver Cotton Mills Ltd. v. Commissioner of Sales Tax (West), Karachi " reported as ( 1984 PTD 216 ) which dealt with the issue involved in this appeal is reproduced as under:-- "The duty to issue license was on the Department and if they have not taken care to issue license after, proper verification and satisfaction and have gone on issuing license to bogus parties, or non-existent parties, the responsibility entirely lies upon the Department as a licensed manufacture, would only see the copy of license and will not make inquiries for establishing the genuineness of the licensee. How can this duty be imposed on the assessee to ascertain whether the party to whom license has been issued exists or not? Unless, it is established that the license has been cancelled before the sale knowledge, of the assessee it will be unjust to burden the seller or assessee to make inquiries about the genuineness of the license."

The DR has mentioned the non-compliance of Section 73 of the Sales Tax Act, 1990 on approximate basis that 45% of total purchases were kept below Rs,50,000/- to avoid compliance of Provision of section 73. It is submitted here that the DR has not paid a heed on page 9 of Order -in-Original No 5 dated 17.03.2017 where it has been specifically mentioned as under: "The learned AR have been submitted in his written reply along evidences regarding physical transportation of goods such as billies, gate passes and delivery challans etc from supplier's premises to registered person's premises, banking transactions in terms of section 73 of the Sales Tax Act, 1990 and sufficient proof such as active taxpayer list on FBR web portal prior and/or at the time of these supplies which shows the said suppliers were active at the time of transaction in his support.

The detailed scrutiny and critical evaluation of input tax claimed/adjusted against the invoices issued by the registered persons has been carried out. The learned AR emphasized that these suppliers were active at the time of such supplies and there registration status were also active at the time of transaction and appeared in the online taxpayers list available in FBR's web portal. Further he stressed that physical movement of these goods were also available such as gate passes and delivery challans issued by these suppliers. He produced goods receiving memo issued by the registered person in this regard as well. The provision containe d in section 73 of the Sales Tax Act, 1990 has also been considered which indicated that the amount of Rs, 50,000/- and above against these supplies were through banking channel. He provided the following evidences in support of his arguments Payment proof under section 73 against these transactions Physical transportation of goods Active tax payers list/ registration status of the suppliers prior/at the time of transaction. (Emphasise supplied)

(iii) The complete record comprising sales tax invoice summaries along with sales tax returns cum payment challans and purchase registers along with purchase invoices have been submitted and this fact has been admitted by the learned officer at page 9 of order-in-original this fact has been further admitted by the respondent No, 2 at pages 14 and 15 of the CIR(A) order-in-original that as under "The DR after comprehensive reconciliation which were placed on file, submitted that payment proofs required under section 73 of the Sales Tax Act, 1990 against these supplies provided by the registered person were checked and his findings as under .

The registered person submitted his following two (02) bank statements Faysal Bank Limited Korangi Road Branch, Karachi Account #01440060007061 Askari Bank Limited DHA Branch, Karachi Account # 0100025091 While analyzed these bank statements and payment proofs required under section 73 of the Sales Tax Act, 1990 it has been revealed that majority of these transaction were through banking channels and registered person compliance in this regard is satisfactory ...

The DR expressed that after detailed scrutiny and thoroughly examined the record the compliance of payment proof required under section 73 of the Sales Tax Act, 1990, evidence regarding physical movement of goods of such transactions and evidences regarding these blacklisted suppliers were active prior and/or at the time of such supplies were checked and found major ity of these supplies have satisfactorily evidences and compliances and input tax adjustment/claimed against the invoices issued by the blacklisted supp lier(s) of the registered person were admissible upto 30.6.2013 i,e, before the insertion of clause added in subsection (3) of section 21 of the Sales Tax Act, 1990 however , after the commencement of this clause we are restricted and bind to recover input tax adjustment/claimed issued by the blacklisted suppliers i. e. from 1.7.2013 to 30.6.2016 irrespective of the transaction to these suppliers were through banking channel or not as required under the Act......."

(iv) It is also settled law that an edifice built on a faulty foundation collapses along with that foundation and resultantly the DR's* argument on non-co mpliance of Section 73 may be held to be void and an attempt to face saving and disregard to the endorsement and observation of the learned officer (Respondent No, 2).

(v) The appellant is not only importer of machinery and spare parts, is also a service provider and registered in Sindh Revenue Board under "Labour and Manpower Service Provider" and is providing services to "PICT , KICT , QICT and many other renowned taxpayers, these and many other taxpayer required spare parts time and again therefore the Appellant has to rely on local suppliers to meet the requirements of its buyers. The allegation of department as "mala fide motives" has been properly replied on para (iii) supra.

(vi) The Hon'ble Justice Mr . Nasim Sikandar in a Writ Petition No, 18599 of 2002 observed as under: "The only reason for such recommendation being that "most of these suppliers splitting the invoices in such a way that the total of each invoice comes by Rs,10 to Rs,100 less than Rs,50,000 to avoid compliance of section 73 of the Sales Tax Act, 1990". That justification alone is against one of the basic principles of taxing statutes that a person can adopt all legal modes to avoid taxation. The auditors perhaps are not aware of the difference between evasion and avoidance. The proposed action in this case is all the more unjustified when the petitioner is proposed to burden with the total sum of Rs,I 1,17,500 as sales having been made from suspected person. In the report there is also no mention of the fact as to why a number of these firms were found suspected..."

OPINION OF THE COURT We have heard both the learned representatives and have also gone through the records of the case, impugned orders passed by the offices below as well as case laws cited at bar. The issues involved in this appeal are discussed and decided as under:

28. On the legal issue of jurisdiction raised by the appellant, we have perused the relevant provisions. The law is very well settled that the legal issues / jurisdictional issues have to be decided at first.

29. The perusal of the ONO shows that proceedings were initiated by the Addl. CIR by issuing notice under section 11(2) of Sales Tax Act and culminated in passing the ONO dated 17.3.2017. It was, as contended by the learned counsel, that the DCIR /Addl Commissioner IR was not conferred any powers to issue show-cause notice under section 11 of the Act. It was further added that certain jurisdiction orders were passed by the Board delegating the powers to issue notices under section 11 to the CIR who further cannot delegate such powers to the DCIR/Addl.CIR , which is not permissible under the law . This issue stands settled by the following judgments

(a) 2018 PTD 1471 [Hamza Nasir W ire v. Federation of Pakistan] His Lordship eloquently and vividly expounded enunciated the following principles:-- "7. Section 32 relates to delegation of powers of the Board or the Chief Commissioner by an order and subject to such limitations or conditions as may be specified therein. This provision is not of any assistance in the controversy in hand. Of crucial importance is section 31 which clearly mentions that an officer of Inland Revenue appointed under Section 30 shall exercise said powers and discharge such duties as are conferred or imposed on him under the Act and that he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him. Therefore, it is very clear that the law intends for an officer of Inland Revenue to exercise only those powers and discharge such duties as are conferre d or imposed under the provisions of the Act and none other . Thus the source of the powers of an officer of Inland Revenue flows from the various provisions of the Act, 1990 and have been conferred by the Parliament. It flows indubitably that neither FBR nor the Chief Commissioner or the Commissioner can confer any power on an officer of Inland Revenue which is not so conferred upon him by the letter of the law. This mandate of the law is at the heart of the provisions of the Act, 1990 and must be taken as the foundational principle in the resolution of any dispute regarding matters of construction of powers of an officer of Inland Revenue. What is conferred by section 30 on either FBR, the Chief Commissioner or the Commissioner is merely the power to prescribe the functions to be performed by them. For example, subsection (2A) of section 30 gives the power to the Board to direct that the Chief Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons of such areas as the Board may direct. Therefore, what is being conferred on the Board is merely the power to delineate and prescribe the respective functions to be performed by the Chief Commissioners and that too in respec t of certain category of persons or classes of persons and no more.

Similarly , the Chief Commissioners have been conferred the power to direct the respective Commissioners of Inland Revenue to perform their functions in respect of such persons or classes of persons of such area as the Chief Commissioner may prescribe. The distinction that is being drawn here is of crucial and pivotal 4/28/2018 Rahmat law. com - Law Library Porta/http://www .rahmatlaw .com/ detail.php 5/6 importance. By reading section 31 and section 30 together , the ineluctable conclusion is that the powers to be exercised by an officer of Inland Revenue is prescribed by law and cannot be conferred by the Board or the Chief Commissioner . However , for administr ative purposes, the Board, Chief Commissioner or Inland Revenue or the Commissioners of Inland Reven ue may prescribe and direct certain functions to be performed by officers subordinate to them in a certain manner and in respect of such persons or classes of persons of such areas as they may choose to prescribe. Therefore, the power is merely administrative and reserved for exigencies of functions of the various administrative zones set up by FBR for its convenience. The power that was exercised by the Commissioners which is now being used as delegated power by the various officers of Inland Revenue to issue the impugned show-cause notic es, has been derived through subsection (3) of section 30 of the Act, 1990 which has been brought forth above. However , subsection (3) does not, by any stretch of imagination, confer on the Commissioner a power to delegate to an officer subordinate to him such power at his whim that he deems fit to do so under the circumstances. Those powers can only be conferred by law and not by the Commissioner Inland Revenue and the only authority that vests in the Commissioner Inland Revenue is to bifurcate the functions to be performed by offices subordinate to him and that too in resp ect of such persons or classes of persons as he may direct. I agree with the contentions raised by the learned counsel for the respondents that this is a primary administrative responsibility cast on the Board, Chief Commissioner and the Commissioner , for unless this authority is so conferred on these bodies and offices, chaos will reign and administratively it will be impossible to control the exercise of powers by an officer of Inland Revenue. This can be illustrated by a reference to section 11 itself which merely mentions that an officer of Inland Revenue may serve a show-cause notice on any person who has fallen foul of the various acts mentioned in section. The office of Inland Revenue includes a wide array of officers mentioned in section 30 and unless the power is conferred on the Board, the Chief Commissioner or the Commissioners to mark out and assign the functions of the officers subordinate to them, there will be complete uncertainty with regard to the powers to be exercised by the respective officers of Inland Revenue. It is precisely for this purpose that subsection (2A) to subsection (4) of section 30 have conferred administrative powers on the Board, Chief Commissioner and the Commissioners Inland Revenue to settle the various functions performed by offices of Inland Revenue subordinate to them. However , this does not include conferring on those officers the powers which are not so conferred by law .

8. The question however arises as to how the Notification-I and the orders issued by the various Commissioners Inland Revenue are to be reconciled. I have no doubt in my mind that if the Notification-I was not in the field and had not been issued by the FBR, the Commissioner Inland Revenue was perfectly within his right to exercise the powers conferred by subsection (3) to prescribe the functions to be performed by officers of Inland Revenue subordinate to him in respect of such persons or classes of persons or of such areas as the Comm issioners would direct. However , the fact remains that FBR has now issue a notification by which it has expressed its clear intent to confer on the Commissioners the functions to be exercised in respect of certain persons or classes of persons of such areas as specified in that notification. The tenor of Notification-I and Notification-II also shows that FBR intended for the Chief Commissioners and Commissioners of Inland Revenue to perform all administrative functions and coordination as given in the Column-4 of the Table in those notifications. Therefore to that extent the Commissioner's power to confer those functions on officers subordinate to him stood taken away and his power to do so in respect of the subject matter of Notification-I and Notification -II has been curtailed. This effectively means that in respect of the persons or classes of persons or cases or classes of cases as specified in Notification-I only the Commissioner of Inland Revenue mention ed in these Notifications will exercise the power and those function s cannot be delegated by those Commissioners of Inland Revenue.

This is the most appropriate purposive interpretation which could be placed upon a holistic consideration of the Notifications I and II and the orders made by the Commissioners Inland Revenue. Unless this is done it will be tantamount to undermining the authority and the intent of the FBR and will throw into complete disarray the hierarchycal structure of the FBR. This is also evident from the use of the term "shall" in the Notification-I by which it has been specifically stat delegate on the Commissioners concerned and although the Notification-II refers to the Notification-I, it does not convey an impression that the act is being performed in the delegated exercise of powers.

9. A similar question arose before the Islamabad High Court in a case titled Zaver Petroleum Corporation Limited through Director , Islamabad v. Federal Board of Revenue through Chairman FBR, Islamabad and another (2016 PTD 2332 ), which dilated upon the issue involved in these petitions and concluded as follows:- "17. It is, therefore, obvious from the above definitions that the three expressions are distinct and separate.

The power or jurisdiction conferred on an officer of Inland Revenue precedes the performance of functions. The conferment of power or jurisdiction is a precondition for the performance of functions. By no stretch of the imagination does subsection (3) of section 30 empower the Commissioner to 4/28/2018 RahmatLaw .com - Law confer power or jurisdiction. However? a Commissioner pursuant to subsection (3) can assign persons or areas in respect of the officers specified therein for the purpose of the performance of functions with regard to the scope of the power and jurisdiction already conferred on such officers.

Such officers, in order to perform their respective functions, have to be vested with power or jurisdiction.

In the instant case the learned counsel appearing on behalf of the Department have not been able to show any provision of the Act of 1990 which empowers the Commissioner in issue the order dated 23-01-2014 and further delegate the powers and jurisdiction conferred upon him or her by the Board pursuant to the order dated 21-01-2014. The reliance of the Commissioners on the notification dated 01-07-2010 is misplaced as the same does not confer the power of adjudication under section 1 1 of the Act of 1990.

18. It is settled law that a delegate cannot further delegate its powers unless expressly authorized under the law. It is also settled law that in order to enable a person to delegate the powers or functions, there must-be an authority , expressed or implied, to delegate. When power is conferred on a particular person, then that person alone has to exercise the powers and cannot transfer its exercise to another person. The august Supreme Court in the case titled 'Muhammad Ashraf Tiwana and others v. Pakistan and others'

[2013 SCMR 11591 while examining the power of appointment of Commissioners vested in the Federal Government under the Securities and Exchange Commission of Pakistan Act, 1997, observed and held that it was well settled law that a statutory delegate could not sub-delegate his or her powers...

19. In the light of the above, the order dated 23-01-2014 issued by the Comm issioner Inland Revenue was without lawful authority and jurisdiction. The Board had expressly conferred the power of adjudication under the Act of 1990 on the Commissioner vide order dated 21-01-2014. The latter had no authority or jurisdiction to further delegate the power and jurisdiction of adjudication conferred by the Board vide order dated 21-01-2014. It is settled law that if the basic order is void, then any superstructure built thereon is also illegal and liable to fall. The Inland Revenue Officer was, therefore, not vested with power nor had the jurisdiction to issue a show-cause notice under section 11 of the Act of 1990. The Commissioner alone was vested with power and jurisdiction under section 11 of the Act of 1990, pursu ant to the Board's order dated 21-01-2014."

10. I have no reason to disagree with the judgment rendered by the Islamabad High Court and for my own reasons given above concur with that judgment." a) It is worth mentioning herein that His Lordship while agreeing with the judgment of Islamabad High Court recorded his own reasoning. ) b) W.P. No, 22028 of 2017 now reported as -[Punjab Beverages Limited v . FBR] Now reported as 2018 PTD 1251 ] The relevant extract is reproduced hereunder:-- "....7. This Court has gone to the said order and is in respectful agreement with the reasoning of the learned Single Judge in setting aside the show-cause notices issued to the Petitioners. Since the issue raised in the Writ Petition and connected Writ Petitions had already been decided by the Single Bench of this Court as stated above, this Court is bound to follow the said order . In the circumstances, this Writ Petition and connected Writ Petitions are allowed in the same terms as mentioned in Order dated 8.12.2018 passed in Writ Petition No, 37295 of 2016.

Consequently , the show-cause notices impugned in this Writ Petition and connected Writ Petitions are set aside." c) S.T .A. No, 994/LB/2017 dated 2.3.2018 [Messrs Fatima Fert. Limited] The relevant extract from the judgment of the Division Bench is reproduced hereunder: "6. We have gone through the orders of the authorities below as well as the judgment of the honourable Lahore High Court relied upon by the AR of the appellant. Be that as it may, it is an admitted fact that the assessment proceedings were conducted and finalized by the learned DCIR under section 11 of the Act. The findings given by Honourable Court (which also inter-alia rely on a judgment of the Islamabad High Court on similar issue), as reproduced supra are clear and unambiguous, viz. the Board has only conferred the power of adjudication under section 11 of the Act to the relevant Commissioner Inland Revenue and under the law he is not empowered to further delegate the powers relating to adjudication under these provisions, and thus any proceedings conducted through exercise of the provisions by an officer below the rank of Commissioner are prima facie a nullity in the eyes of law. Accordingly , without going into any other aspect of the case, since in the instant case also adjudication powers under section 11 of the Act were exercised by learned DCIR, by respectfull y following the dictum laid down by Honourable Lahore High Court, we hereby annul the orders of the authorities below and direct that demand raised against the appellant on the account is deleted. However , the Department is at liberty to take action disallowed by the Honourable Lahore High Court, Lahore in Para 11 of the judgment in W.P. No,37295 of 2016 reproduced in Para 3 of this order .

7. Since, the orders of authorities below have been vacated on jurisdictional grounds, there is no need to adjudicate the other grounds taken by the appellant.

8. The appeal stands decided in the manner and to the extent stated above." d) S.T .A. No, 668/LB /2017 dated 18.01.2018 [Messrs Coca Cola Beverages (Pvt.) Ltd.

The relevant extract from the order of the Division Bench of this T ribunal is reproduced hereunder: "..It is an admitted position and evident from the record that assessment proceedings in the present case were conducted and finalized by learne d DCIR under -section 11 of the ST Act, thus, without going into any other aspect, by respectfully following the dictum laid down by Honourable LHC, we hereby annul the orders of the authorities below and accept the appeal filed by the registered person. Since, the orders of authorities below are being vacated on jurisdictional grounds, there is no need to adjudicate the other grounds taken by the registered person."

30. Respectfully following the binding judgments we vacate the order of the officers below on this jurisdictional issue.

31. Now, on another legal objection that before invoking section 11 of the Sales Tax Act, 1990, notice under section 25 is a condition precedent as held by the Tribunal vide its judgment bearing I.T.A. No, S.T.A. No, 36/KB/2017 in the case of Messrs National T iles and Ceramics Ltd. v . CIR dated 28.8.2017 with the following observations:-- "13. The careful perusal of the order of Honourable High Court of Lahore earlier relied upon by the learned CIR(A) whereby he allowed relief is a reported case 2015 PTD 1, show that learned CIR(A) fell in serious error . The text of the order of Honourable High Court show that it is not observation but clear finding. We are reproducing the relevant text from the order as under for better understanding:

8. Sales Tax is premised on a self-asse ssment paradigm, where the tax due is self-assessed by a taxpayer and deposited along with the monthly sales tax return. Supervision and mon itoring of the self assessment regime is through the process of audit provided under section 25 of the Act. Once the taxpayer is selected through audit and the department is of the view that the taxpayer has an outstanding tax liability , the case undergoes assessment of tax through the process of adjudication under section 11 of the Act. Therefore the self assessed amount of tax due by the taxpayer in its sales tax return can only be altered through fresh assessment of tax under the section 11 of the Act, subject to the process of selection of a taxpayer though audit Section 11 provides for assessment of tax where a taxpayer fails to file a return, or pays an amount which is less than the amount of tax due or has made short paym ent or has claimed input tax credit or refund which is not admissible. The section further provides that where by reason of collusion or deliberate act any tax has not been levied or has been short levied or has been erroneously refunded, or by reason of inadvertence, error or misco nstruction any tax has not been levied or short levied or has been erroneously refunded, the Officer of Inland Revenue passes an assessment order along with penalty and default surcharge. Section 11 is the only provision under the Act which provides for assessment of tax through adjudication in case the self-assessed tax of the taxpayer , according to the department is unpaid or short paid for the above reasons. Post assessment if the taxpayer fails to pay the tax assessed, recovery can be initiated against the taxpayer under section 48 of the Act.

14. The above finding was given by Honourable Court on the argument of the AR which is mentioned in the order and reads as under:-- It is argued that in case of any discrepancy or incorrect calculation, as pointed out by the respondent department, between the figures reflected in the actual electricity bills placed on the website of the appellant company and the amounts indicated in the return, only proceeding s for assessment of tax under section 11 of the Act can be initiated against the appellant (subject to the provision of section 25 of the Act). Under the said provision, an opportunity is provided to the taxpayer to rebut the allegations levelled by the department followed by adjudication of the dispute after granting a hearing to the appellant.

15. After going through the above relevant texts we have no hesitation in holding that these are not mere observations and obiter dicta. The texts referred are clear findings on two provisions of the Sales Tax Act, 1990 i,e, section s11 and 25 as to how these are to be invoked these cannot by any imagination be termed to be obiter dicta as held by learned C1R(A). The learned division benches of this Tribunal has also followed the findings of the Honourable Lahore High Court and held that proceedings under section 11 can only be initiated through process of audit under section 25. The self assessed amount of tax due by the taxpayer in its sales tax return can only be altered through fresh assessment of tax under section 11 of the Act, subject to process of selection of a taxpayer through audit which is provided under section 25."

32. Following the judgment delivered by the Division Bench of this Tribunal the orders passed by the officers below are not maintainable also on this score too for not issuing notice under section 25 of the Sales Tax Act, 1990.

33. On merit of the case we have found that the claim of input tax the taxation officer disallowed the claim regarding input tax adjustment of the taxpayer as was found to be attributable to invoices issued by suppliers having suspended Registration / black-listed registration status. It is argued that the impugned show-cause notice was vague, therefore not unsustainable. In this respect, it is contended that party-wise and transaction-wise detail was not confronted to the taxpayer and accordingly , the order of the Addl. CIR is liable to be annulled, being contrary to well-settled principles of law .

34. With regard to the merits, the action of the authority below is even otherwise not lawful as at the time when transactions were executed with the respective suppliers they were fully compliant and active, therefore, any subsequent status assigned to such appli ers by the revenue could not disturb past and closed transactions. In this regard, reference may be made to the judgment of the Hon'ble Lahore High Court in Writ Petition No, 17185/13: - Galaxy T extile Mills Ltd. v . Federation of Pakistan etc . wherein the following principles were settled:- "The status of the buyer existing at the time of supply of the goods by the petitioner shall be considered while deciding the show-cause notice and not the status attained by the buyer subsequently ."

35. Before further proceed with the matter , we may add that the Sales Tax Act, 1990 has properly prescribed a procedure of selection of case by FBR and conduct of audit under section 25 of the Act, whereas no such selection by the Board or intimation by the commissioner was received / confronted therefore, any proceeding in violation of a due procedure of law shall be simply violation of Article 10A of the Constitution of Islamic Republic of Pakistan.

36. The material evidence collected for Show-Cause Notice [SCN] under section 11(2) need to be credible and can at best pass the test of fair trial and due process if it is an outcome of an inquiry or investigation envisaged under the proviso to section 25(2) and or in section 37 and /or in section 38 of the Act. Anything short of this process will not only lead to persecution of taxpayers, it will also make a mockery of the fundamental right of fair trial.

Section 25(2) is reproduced as under: "(2) The officer of Inland Revenue authorized by the Commissioner , on the basis of the record, obtained under subsection (1), may , once in a year , conduct audit: Provided that in case the Commissioner has information or sufficient evidence showing that such registered person is involved in tax fraud or evasion of tax, he may authorize an officer of Inland Revenue, not below the rank of Assistant Commissioner , to conduct an inquiry or investigation under section 38: Provided further that nothing in this subsection shall bar the officer of Inland Revenue from conducting audit of the records of the registered person if the same were earlier audited by the office of the Auditor- General of Pakistan.

(3) After completion of audit under this section or any other provision of this Act, the officer of Inland Revenue may, after obtaining the registered person's explanation on all, the issues in the audit shall pass an order under section 1 1."

The Sales Tax is premised on a self-assessment paradigm, where the tax due is self-assessed by a taxpayer and deposited along with the monthly sales tax return. Supervision and monitoring of the self-assessment regime is through the process of audit provided under section 25 of the Act. Once the taxpay er is selected through audit and the department is of the view that the taxpayer has an outstanding tax liability , the case undergoes assessment of tax through the process of adjudication under section 11 of the Act. Therefore, the self-assessed amount of tax due by the taxpayer in its sales tax return can only be altered through fresh assessment of tax under section 11 of the Act, subject to the process of selection of a taxpayer though audit. Section 11 provi des for assessment of tax where a taxpayer fails to file a return, or pays an amount which is less than the amount of tax due or has made short payment or has claimed input tax credit or refund which is not admissible. The section further provides that where by reason of collusion or deliberate act any tax has not been levied or has been short levied or has been erroneously refunded, or by reason of inadvertence, error or misconstruction any tax has not been levied or short levied or has been erroneously refunded, the Officer of Inland Revenue may pass an assessment order along with penalty and default surcharge [if leviable as per law]. Section 11 is the only provision under the Act which provides for assessment of tux through adjudication in case the self-assessed tax of the taxpayer , according to the department is unpaid or short paid for the above reasons. Post assessment if the taxpayer fails to pay the tax assessed, recovery can be initiated against the taxpayer under section 48 of the Act.

37. Now it is well-settled that subsequent blacklisting of supplier could not be made a tool to deprive the registered person of a valuable right accrued in his favour for purchases or transactions made prior to the suspension of registration of such supplier . Having taking regard to the facts of the case in its entirely and after respectfully following the ratio settled in the referred judgments cited supra, we have no option except to reach the conclusion that Revenue has failed to prove the allegation levelled against respondent that they claimed inadmissible input tax adjustment on the basis of invoices issued by their suppliers which were blacklisted subsequent to the transactions made by the respondent. In this view of the matter the orders of the authorities below are vacated on merit too and the appeal of the taxpayer is hereby allowed.

Conclusion / Summary

38. The upshot of the above discussion the findings / conclusion of the judgment may be summarized and appeal is disposed in the following terms: Jurisdiction of the Commissioner That there is no provisions of delegation of powers enforced to Commissioner like section 210 in Income Tax Ordinance, 2001. Delegetee cannot further delegate his powers, only the Commissioner is competent and empowered to undertake the assessment proceedings under section 1 1 of the Sales T ax Act and not by any other officer . The show-cause notice issued under section 11 by Addl. CIR is of no legal effect. The DCIR and /or Additional Commissioner is not empowered to issue notice and passed the order . Such powers exclusively vests with the Commissioner . That order in original in this case passed by the Addl. CIR is without jurisdiction or in excess of jurisdiction and without any legal effect.

Order -in-original ["OIO"] was passed without assuming jurisdiction as per law and without notice and/or Audit under section 25 Show-cause notices under section 11 of the Sales Tax Act ab initio void and illegal ----Notice ought to be issued under section 25 ibid. Thus, show-cause notice is void and illegal.

Subsequently black listed / suspended All parties which have been black listed subsequently whereas, as conten ded and Web-portal evidence produced, these parties were duly active taxpayer at the time of transactions.

39. In view of the above discussion, the order in appeal is not sustainable both on legal issue of jurisdiction and on merit of the case, we have already vacated the orders of the officers below and accept the appeal filed by the registered person by following the dictum laid down by the higher appellate fora as well as by this Tribunal.

40. Both the Miscellaneous Application (AG) as well as main appeal filed by the Registered Persons stand disposed of f accordingly .

41. Before parting with this judgment, we may observe that taxpayers cannot be presumed to be dishonest, in case of [Pannala Binjraj and others v. Union of India and others AIR 1957 SC 397], the Supreme Cour t has held emphatically that there is no presumption against the bona fide or the honestly of the assessee and normally the Income Tax Authorities would not be justified in refusing to an assessee a reasonable opportunity of representing his views before deciding any matter against him. The Bombay High Court in [Hira bai D. Desai and Sons v. C.I.T.

(1936) 4 ITR 95 (Born) has also held that there is no presumption of bad faith against any assessee permissible in law unless there be sufficient material on record to establish and ascertain the bad faith in relation to the that particular taxpayer nor can the Department presume the goods to have been sold at black market prices which are higher than control rates as was held in [A. S Sivan Pillal v. C.I.T (1958) 34 ITR 328 (Mad.)] Pure guess or bare suspicion or stock phrases is not sustainable while framing assessment against the assessee. [Dharajlal Girdharilal v. C.I.T (1954) 26 ITR 736 (SC)] [I.T.A. No, 1003 of 1957-58 decided on 09.12.1959 (1960) 2-Tax (V-277)] There must be something more than bare suspicion. [Dhakeswari Cotton Mills Ltd. v . C.I.T . (1954) 26 ITR 755 (SC)].

In finale, we would add that one should always remember that truth even if buried has power and a community can never be fed on lies all the time. Some day it will come alive with fury: "When truth is buried underground it grows, it chokes, it gathers such an explosive force that on the day it bursts out, it blows up everything with it." (Emlie Zola)