This appeal was filed against the order dated 20-2-2018, passed by the Commissioner HQ's PRA, Lahore.
2. The facts involved in this appeal are that on 05.12.2017 Additional Commissioner Enf-02 of PRA Lahore issued a show-cause notice to the appellant wherein it was alleged that the appellant (Messrs Citi Bank) received different (detail is mentioned in the table of the show-cause notice) taxable services during the period from 01.01.2016 to 31.12.2016 but failed to withhold and deposit the due tax amounting to Rs.23,668,800/-. It was stated in the show- cause notice that the appellant violated the provisions of sections 14 and 19 of PSTSA, 2012 read with PSTSA (Withholding) Rules, 2015 with the intent to evade tax therefore, why the appellant may not be assessed under section 52 of the, PSTSA and why the said amount may not be recovered under section 70 of the Act along with default surcharge under section 49 and penalty under section 48 of the said Act. The show-cause notice was issued on the strength of the information obtained from the audited financial statement of the appellant. After receipt of the show-cause notice, the appellant appeared through AR, submitted written replies and documents, as well. On 20.02.2018 the Commissioner HQ's passed the impugned order whereby the appellant was held responsible for not providing the documentary evidence in the shape of ledgers and invoices therefore the Rs.310,7301-. Feeling aggrieved of the said order , the appellant has filed the instant appeal.
3. Learned counsel for the appellant has argued that the impugned order is not only bad in law but also against the facts of the case;- That the impugned order was passed beyond the period of limitation as the Commissioner passed the order after more than a year from the date of show-cause notice;-That the legal objections raised by the appellant before' the Commissioner were rejected merely on the ground that those had already been settled by this tribunal but neither any such decision was mentioned in the impugned order nor was provided to the appellant;- That the appellant had provided full information in shape of documents to the Commissioner but he failed to appreciate the same;- That the order impugned was passed in an ad-hoc manner by applying the formula of 33%;- That in the impugned order sales tax demand was raised even on the services/goods rendered beyond the jurisdiction of Punjab Province;- That the authority was not justified in raising the tax demand on account of services which are specifically excluded from the purview of sales tax withholding;- That order impugned amounts to double taxation as the tax demand was raised on the services against which the appellant had already charged and deposited the sales tax with the respe ctive tax authorities;- That the penalty under section 48 was also wrongly imposed upon the appellant,- That witho ut establishing mens rea, default surcharge cannot be charged;- That without prior scrutiny , show-cause notice cannot be issued straight away;- That Rules 2, 9 and 13 of (Adjudication and Appeals) Rules, of PSTSA were violated;- That the appellant was not given a proper and fair opportunity of being heard;-That the show-cause notice was passed by the Additional Commission er whereas the impugned order was made by the Commissioner which act has circumvented the right of one appeal of the appellant. Lastly , the learned counsel argued that the appeal may kindly be accepted and the order impugned may be set aside.
Learned counsel has relied upon the case law cited as Caltex Oil (Pakistan) v. Collector Central Excise , C.P.L.A. No. 1968 of 2002 , heard on 20th August, 2004.
4. On the other hand, learned DR has opposed this appeal by arguing that bare perusal of the impugned order is enough to prove that more than sufficient opportunities were provided to the appellant to present its case and to file the documentary evidence but the appellant did not contest the case properly and failed to submit documents to controvert the show-cause notice therefore, the Commissioner passed the order on the basis of available record, after due appreciation of the same. Learned DR has argued that this appeal has no merits hence it may be dismissed.
5. Arguments heard. Record perused
6. It is a well-settled proposition of law that the first and foremost aspect of importance in a pending lis is, the fairness and grant of ample opportunity to both sides, so that no one feels discrimin ation. The adjudicating officer is supposed and required to dilate upon all issues involved in the case and to make a speaking order thereafter , by looking into every piece of evidence produced/submitted by the parties. Rules 13 and 16 of the (adjudication and appeals) Rules of PSTSA, 2012 provide the principles to be adhered to by the first adjudicating officer and the first appellate forum i.e., Commissioner . The fairness of a trial/adjudication is such an important right that it was inserted in the constitution of the country by way of Article 10-A, which reads as under .
"For the determination of his civil rights and obligations or in any criminal charted against him a person shall be entitled to fair right and due process"
7. After going through the record, this tribunal is of the view that the case in hand was not dealt with fairly, by the lower forum. In addition to this, quite many irregularities amounting to illegalities are apparent on the record. This tribunal is of the view that the learned Commissioner has failed to look into the record/evidence available/produced before him. It is an admitted fact that on 20.02.2018 the last reply of the appe llant was submitted before the Commissioner . This reply was accompanied with quite many documents in shape of annexures A to C, which were copies of invoices and breakup/summary of expenses on the prescribed format. The last paragraph of this reply is important to be reproduced, "In light of the above we would request you to kindly withdraw your show-caus e notice under intimation to us.
However , if you are not in agreement with above, please confirm the same to us along with your reasons in support thereof to enable us to provide you with the required information/clarification accordingly ."
8. The Commissioner passed the order on same date i.e, 20.02.2018 which indicates that the documents provided by the appellant were not looked into properly as apparently there was some haste in the mind of the Commissioner to pass the order on the same date, may be because of rush of work. The appellant had requested in the said reply , for the grant of an opportunity to enable them to submit further information/clarification accordingly . It is mentioned in the order that the appellant failed to file ledgers and invoices, and in absence of these documents the Commissioner was handicapped to assess the exact amount of tax therefore, he applied the formula/principle of 33%. This could have been avoided easily by granting another opportunity to the appellant after specifying the nature of the invoices and ledgers to be provided. It is of importanc e to note here that although the primary responsibility is always of the authority to dig out the truth which enables the authority to assess the tax demand in exact terms and not on presum ptions however , the appellant/taxpayer is not supposed to act in lethargy or try to evade his/her duty to provide/submit the supporting documents/evidence to help the authority to come to a definite conclusion which may also benefit the taxpayer . In this case the taxpayer has also not acted diligently . Due to the above stated reasons the order impugned was passed without the support of documents/evidence. In tax regime no presumption or guess work is allowed to be the basis of tax demand/assessment rather the demand/assessment, essentially requires to be in exactness.
9. The show-cause notice in this case contained the figures of trans provincial activities of the appellant. The officer was duty bound to afford as many opportunities as possible (within the statutory time limitation) to the appellant to get all the relevant data of all the tax authorities operating on trans-national basis to arrive at the exact amount of tax liability payable within the bounds of Punjab. Revenue Authority However , in quite many other cases as well, this tribunal has observed that the orders have been finalized on the basis of such show-causes with tax liabilities according to percentage of bank's branches operating in the Province of Punjab. Non-af fording of proper opportunity in getting aforementioned documents in such cases of taxpayers operating on trans-national basis create complications especially when time limitations do afford ample time for further hearing opportunities. This practice by the of ficers of the authority is not appreciable.
10. It is also observed by this tribunal, in this case as also in many other cases, the initial show-cause notice is issued by the Additional Commissioner but thereafter the proceedings are carried out by the Commissioner without mentioning any reason for the change of forum. Section 60 of PSTSA, 2012 explains the hierarchy of the adjudicating officers. Subsection (2) of the said section empowers the Commission er to adjudicate any case falling in the jurisdiction and powers of any officer subordinate to him. But this power is to be understood in the manner that if the Commissioner feels it appropriate he can initiate the proceedings himself which otherwise falls with the pecuniary jurisdiction of the subordinate officer but that does not mean that a case initiated by the subordinate officer is to be taken up by the Commissioner without mentioning the reason for the same because this act amounts to curtailment of a forum for the taxpayers. There is no cavil that Commis sioner is empowered to take up any case falling in the jurisdiction of his subordinates however , this should be done by mentioning the reasons, for intimation of the taxpayer , but usually this is not done by the Commissioner which practice is against the spirit of law and it can also vitiate the proceedings . The learned DR usually intimates this tribunal about the non-availability of certain officer(s) as the reason for commissioners to assume jurisdiction in cases initiated by their subordinates and as per prevalent practice a hearing opportunity by the succeeding officer is afforded to the taxpayer . The said opportunity was provided to the appellant vide hearing letter dated 09-01-2019 which nonetheless mentioned only the change of officer but was not even challenged by the appellant on that count during the said proceedings.
Furthermore there is no denying to the fact that in this particular case, the jurisdiction of Additional Commissioner was not assumed by the Commissioner due to non-availability of Additional Commissioner but exclusively given to him vide jurisdiction Notification dated 08-12-2017. Be that as it may, the Commissioner , while taking up the proceedings can easily mention this fact in the record which is not done in majority of cases. However , in this case the Commissioner has mentioned in the impugned order regarding the change of officer but surprisingly while issuing the notice of hearing dated 09.01.2018, to the taxpayer/appellant, no such reason is stated.
11. Moreover in the impugned order , under the heading of "judgment" the Commissioner has stated as under .
"I have gone through the case record and examined the contentions of the respondent bank. The taxpayer has raised legal objections vide letter No. LT/2319/18 dated 23.01.2018 with respect to non-applicability of section 52 of Punjab Sales Tax on Services Act, 2012 for withholding. The said legal objections do not hold water as the same had already been decided by the appellate tribunal, PRA".
However , neither the citation of the decision made by the appellate tribunal is mentioned in the order nor the detail/title of the case has been shared. The Commissioner could have reproduced the relevant portion of the said decision in its order , at least. Mere mentioning of an unknown decision of PRA tribunal amounts to non-deciding the legal objections of the appellant regarding non applicability of section 52 of PSTSA, 2012.
12. In all the circumstances discussed above, this tribunal is of the considered view that case of the appellant needs a fresh decision, therefore, the appeal in hand is accepted and resultantly the impugned order dated 20.02.2018 is set-aside. The case of the appellant is F remanded to the competent authority with a direction to decide the-case afresh after going through the available record. It is further directed that the officer/authority shall give one clear opportunity to the appellant to provide all the necessary documents/evidence required by the authority for a fair and proper decision of the case. If the appellant fails to submit/produce the documents/evidence, required by the authority or by the appe llant himself to prove its case, the authority/of ficer will decide the case afresh in light of the observations made by this tribunal on the basis of available record. However , the legal issues will be dealt with afresh in accordance with law. The appellant/taxpayer is directed to substantiate its contentions by producing all the supporting evidence/documents including returns/ledgers/invoices and CPRs pertaining to all the respective provincial sales tax authorities to avoid any branch wise formula by the assessing of ficer.
The Registrar of the Tribunal is directed to communicate this order to all concerned immediately . File of appeal be consigned to record room.