MUNIB AKHT AR, J.---The respondents issued a show cause notice on 31.12.201 1 to the petitioner under the provisions of Sales Tax Act, 1990 ("Act"). The tax periods covered by the notice were from July 2008 to June 2009.
One of the objections of the petitioner to the proceedings undertaken was that the notice was time-barred, at least in respect of part of the periods covered thereby (being July to November , 2008). The matter went up to the learned Appellate Tribunal ("Tribunal"), which vide its order dated 25.09.2012 held that section 36(2) of the Act was applicable to the facts of the case, and not subsection (1) under which the show cause notice had been issued. As a result, in respect of the allegations levelled against the petitioner therein, the applicable limitation period for issuance- of the notice was not 5 years as claimed by the tax authorities, but 3 years. A direction was accordingly given "to treat the show cause notice as issued under section 36(2) and procee d de novo keeping in view the limitation provided therein."
2. The respondent-tax authorities understood the said order to mean that the tax periods July 2008 to November 2008 had become time-barred, and they commenced de novo proceedings in respect of the subsequent periods, from December 2008 to June 2009, under the original notice dated 31.12.201 1. Those proceedings culminated in an order in original dated 25.04.2013, which does not form part of the present proceedings.
3. The respondent department also decided to reopen the tax periods that had become time-barred under section 36(2) (i.e., July to November 2003). 'Having accepted the findings of the learned Tribunal in its aforementioned order dated 25.09.2012, the respondent authorities applied to the Federal Board of Revenue under section 74 of the Act to obtain extension in the limitation period under section 36(2) in order to open proceedings for the closed tax periods, by the issuance of a fresh show cause notice. That notice is dated 24.06.2013. The notice opened with four paragraphs of recitals, which set out the manner in which it had come to be issued. The fourth recital stated that the FBR had extended the time limit under section 74. That order of the FBR is dated 08.06.2013.
4. The petitioner , being aggrieved by the said extension granted by the FBR, filed a writ petition challenging the same on the ground of lack of jurisdiction. The show cause notice dated 24.06.20 13 was also challenged. Through the impugned judgment dated 20.09.2019 the learned High Court dismissed the writ petition, holding that the extension in time was granted lawfully by the FBR. The submissions made by the learned counsel for the petitioner are that the respondent-department as per its own interpretation with respect to the order dated 25.09.2012 of the learned Tribunal accepted that its proceedings in relation to the tax periods July 2008 to November 2008 were time-barred. Rather than challenging that finding in tax reference before the High Court, the respondent- department opted for an executive "solution" by way of approaching the FBR in terms as noted above. In such manner , the judicial outcome of the appeal before the learned Tribunal was sought to be circumvented and frustrated. To our mind resort to such executive "remedy" under section 74 of the Act is not permissible in relation to any proceedings which are pending before a judicial forum, or have become time-barred on account of judicial findings given by such a forum.
4(sic.) In this background of the matter , we consider that commencement of the proceedings for the time-barred periods under a fresh show cause notice was legally invalid. Hence, the same are struck down. Learned counsel for the respondent authorities sought to argue that a show cause notice could not be challenged directly by filing a writ petition under Article 199 of the Constitution. However , the basic challenge here is to the order of the FBR under section 74. The finding that that order was without jurisdiction is fatal for the subsequent action taken on the basis thereof, i.e., the show cause notice dated 24.06.2013, which is also, in the peculiar facts and circumstances of the case, liable to be struck down. The learned High Court did not appreciate these aspects of the case and arrived at the wrong conclusion. The impugned judgment must accordingly be set aside.
5. Resultantly , this petition is converted into an appeal and allowed. The petitioner is entitled to suitable declarations in respect of both the order of the FBR dated 08.06.2013 and the show cause notice dated 24.06.2013 and all proceedings and actions in respect thereof or based thereon.