This appeal under section 66 of the Punja b Sales tax on Services Act, 2012 read with Punjab Sales tax on services (Adjudication and appeals) Rules, 2012 was filed against the Order No.16/2019 dated 16.07.2019, passed by the Commissioner , PRA, Faisalabad.
2. The genesis of the controversy in hand is that on 21.12.2017 Additional Commiss ioner Enforcement-I (Assessing officer) PRA, Faisalabad issued show-cause notice to the appellant alleging therein that the appellant received taxable services for the period from 01.03.2015 to 31.05.2016 but failed to deposit the amount of sales tax as required by the PSTSA on services (withholding) Rules, 2015, in the following tune.
Sr.No. Nature of taxable services receivedAmount paid Entry number of 2nd schedulePunjab Sales Tax deductible and payable (Rs.)
1. Transportation 224,1 16,908/- 48 35,858,705/-
2. Contractual Execution work 226,705,410/- 16 36,752,865/- Total 453,822,318/- 72,61 1,570/-
3. The appellant filed the reply accordingly and contested the show-cause notice on different grounds. However , after hearing of the case, the Additional Commissioner Enforcement-I passed the order on 15.03.2018. Feeling aggrieved of the said order , the appellant filed an appeal before the Commissioner . The appeal was finally decided on 13.09.2018. Being dissatisfied with the said decision, the appellant filed an appeal before this tribunal. After giving audience to the parties, the Appellate Tribunal came to the conclusion that both the forums below had not appreciated the controversy properly , therefore both the orders in question i.e., dated 15.03.2018 of the Additional Commissioner Enforcement-I and dated 13.09.2018 of the Commissioner (Appeals) PRA Lahore were set aside and the case was remanded to the assessing officer, the (Additional Commission er Enforcement-I) to examine it afresh.
4. The appellant contested the show cause notice dated, 29.04.2019 (issued by the Commissioner after the remand order) before the Commissioner Faisalabad and finally , on 16.07.2019 Commissioner Faisalabad passed the orders which is now impugned before this tribunal.
5. Learned counsel for the appellant has opened his arguments by questioning the validity and legality of the show- cause notice dated 29.04.2019 and the Act of assuming jurisdiction by the Commissioner Faisalabad without any mandate particularly in light of the remand order . Learned counsel argued that the issuance of show-cause notice dated 29.04.2019, the proceedings initiated by the Commissioner Faisalabad and the decision dated 16.07.2019 are quorum non judice. Learned couns el argued that even in the said decision there is no mention of the observations made by this tribunal in the previous round of litigation and that the Commissioner Faisalabad failed to consider and discuss the points highlighted by this tribunal in the remand order therefore the order impugned is liable to be set aside. Learned counsel further argued that the appellant is being burdened for the inaction of the PRA who failed to declare the "truck addas" as mentioned in Serial No. 48 of second schedule of PSTS Act, 2012 and in the Circular No. 2 of 2015 dated 01.09.2015. Learned counsel has also argued that the appellant got registered himself as withholding agent on 18.01.2016 whereas the show-cause notice contains a portion of the period i.e., March 2015 to December 2015 during which period the appellant was not acting as withholding agent therefore the appellant cannot be asked to deposit the sales tax as withholding agent for the said period but the order impugned has ignored this material fact. Lastly the learned counsel has relied upon the following judgments.
1. 1990 PTD 948 (Karachi High Court)
2. PLD 2005 Supreme Court 605
3. PLD 2016 SC 808 = 2016 PTD 2269
4. 2013 PTD (T rib.) 2130
5. 2017 SCMR 197 = 2017 PTD 1540
6. Conversely , the learned DR has opposed this appeal by arguing that under section 60 of the Punjab Sales Tax on Services Act, 2012 the Commissioner can assume the jurisdiction of any of his subordinates; that the seat of additional Commissioner is lying vacant since long and that due to this reason the Commissioner Faisalabad himself decided the matter and that no prejudice is caused to the appellant by the order impugned. However , the learned DR too could not rebut the verac ity of this fact that neither in the show-cause notice nor in the impugned order , there is any mention as to why despite specific directions the Commissioner Faisalabad himself assumed the jurisdiction and decided the matter .
7. Arguments heard. Record perused.
Before discussing the merits of this appeal, it would be appropriate and convenient for easy understanding of the controversy that the relevant paragraphs of the remand order are reproduced hereunder;-
3. "It is borne on record that appellant's claim to avail exemption provided under the Schedule of the Act was not properly appreciated by both the forum below . The learned assessing of ficer himself observed as under . the taxpayer contention that transportation services were paid to individual owners of truck and exempted from withholding and deduction of Punjab Sales Tax as per Serial No.48 of the Second Schedule of Punjab Sales Tax on Services Act, 2012. The taxpayer fail to provide documentary evidence to support his contention in this regard"
4. As far as Circular No. 02 of 2015 is concerned, in the given facts of the case, it is to be read conjunctively with and applied in concurrence with Sr. No. 48 of the Second Schedule of the Act of 2012. A harmonious reading of the statutory provision and the circular leaves no doubt that services received from individual owner of a vehicle for carriage of goods shall not be liable to sales tax whether operated independently or acquired through a Truck Adda.
Rather Circular No. 02 of 2015 intended to extend the exclusion to other informal non-corporate transporters of goods (apart from individual owner of a goods transport vehicle) operating through Truck Addas declared as such by the Authority . The question whether in the absence of a formal declaration of such Truck Addas by the Authority the exemption could validly be extended to individuals who own more than one goods transport vehicle or to other non-corporate owners of vehicles has not been agitated before this bench in the case, therefore it will be decided as the occasion arises.
5. We therefore feel no hesitation to decla re that both the forum below defectively appreciated the facts of the case and conclusion was reached in a hasty manner by denying the appellant a speaking order in the case. The order in original dated 15-03-2018 and order in appeal dated 13-09-2018 are set-aside and the case is remanded to the concerned assessing officer to examine afresh the documentary evidence produ ced by the appellant regarding transportation services under various categories (tax periods March 2015 to May 2016) falling in Sr.No. 48 of the Second Schedule of the Act, 2012 and pass a speaking order in the case under the law in the light of observations made supra. The appellant will appear before the concerned assessing officer along with evidence/record on 04- 03-2019 who shall complete the adjudication process within 15 days thereof."
8. As per remand order the case was sent to the assessing officer, to be heard by him afresh but surprisingly the Commissioner Faisalabad took up the matter in his own hands by issuing a fresh show-cause notice dated 29.04.2019. It is an undeniable fact that in the said show-cause notice, there is no mention of the remand order , or the provision of law through which, Commissioner Faisalabad PRA circumvented the jurisdiction of the Additional Commissioner (Assessing officer). The Commissioner Faisalabad did riot bother to mention or to give any reason for not complying with the orders of this tribunal.
9. It is a golden principle of law that a thing or an action must be done or taken in the manner as provided in or directed by the law. It is an admitted fact that in the previous appeal, this tribunal while remanding the case made the specific directions that the matter should be heard afresh by the first forum i.e., the assessing officer (Additional Commissioner-1). This tribunal had further directed that while deciding the matter afresh, the observations made in paragraphs Nos. 3, 4 and 5 of the order should be taken into consideration and to pass a speaking order , but none of the said directions were complied with. The Commissioner Faisalabad PRA improvised a self-serving method, circumvented the jurisdiction of the asse ssing officer, issued fresh show-cause notice dated 29.04.2019 without having any need for the same and then passed the order without making any reference to the observations made by this tribunal in the previous appeal as already stated.
10. Arguments of the learned DR that under section 60(2), of PSTSA, 2012 Commissioner Faisalabad PRA Lahore has the authority to adjudicate any case falling in the jurisdiction and powers of any officer subordinate to him, is of no avail because the situation in the case in hand is altogether different because it is the non-compliance of the specific directions made by this tribunal. If this argument is accepted, it would open an easy way out for the lower forums to ignore and flout the orders/directions passed by this tribunal which cannot be allowed in any circumstances.
11. In light of discussion made above we are constrained to remand this case again after setting aside the order dated 16.07.2019, of the Commissioner Faisalabad PRA. The issuance of fresh show-cause notice dated 29.04.2019 is held unwarranted, particularly in presence of the initial/basic show-cause notice dated 21.12.2017.
The additional Commissioner Enforcement-I will decide the case afresh in light of and in compliance with the directions and observations made in paragraphs 3, 4 and 5 of order dated 21.02.2019, of this tribunal.
12. Copy of this order be sent to chairperson of PRA so that he may be able to understand the illegality committed by Commissioner Faisalabad PRA to ensure strict compliance of the provisions of the Act.
The Registrar of the Tribunal is directed to communicate this order to all concerned immediately . File of appeal be consigned to record room.