This appeal under section 66 of the PSTSA 2012 (The Act) was filed against the order dated 13.02.2019, passed by the Commissioner (Appeals) Lahore.
2. Briefly the facts of the case are that on 23.07.2018 show-cause notice (SCN) was issued to the appellant alleging therein that the authority learnt from reliable sources about providing construction services by the appellant to Allama Iqbal International Airport Lahore A under a contract of Rs.10 Billion during the year 2017-18. It was further stated in the said SCN that despite providing taxable services the appellant, deliberately neither declared the same in sales tax returns nor paid the tax under PSTSA 2012. By way of the SCN the appellant was charged with violation of sections 3, 10, 11, 18 and 35 of The Act read with PSTS (Filing of Return) Rules, 2012. The appellant further charged for committing tax fraud as defined under section 2(43) of The Act. The appellant was asked to show cause for failure to pay tax amount of Rs.500 Million under section 24 of The Act and that why the said amount may not be recovered under section 70 read with Rule 4 of PSTS (Rec overy) Rules, along with default surcharge and penalty under sections 49 and 48 of The Act respectively .
On receipt of said SCN the AR, on behalf of the appellant submitted replies supported with documents whereby the issuance of SCN was challenged on different grounds. After hearing to the appellant and going through the record, Additional Commissioner Enforcement passed the order dated 28.12.2018 wherein the appellant was held liable to pay tax amount of Rs.525,000,000/-, along with default surcharge (to be calculated at the time of the payment).
Feeling aggrieved of the said order the appellant filed an appeal before the Commissioner (Appeals) Lahore but it was dismissed vide order dated 13.02.20 19 whereby the order of the Additional Commissioner Enforcement was modified and the tax amount payable by the appellant was declared as Rs.180,021,661/-. The amount of penalty was also modified from Rs.25,000,000/- to Rs.9,001,083/-, along with default surcharge (to be calculated at the time of the payment). Being dissatisfied with this order , the appellant has preferred the appeals in hand.
3. Learned counsel for the appellant has contended that the figure of 10 Billion as mentioned in the SCN is based on no evidence/documents rather it is a figment of imagination of the officer;-That the appellant neither challenged nor argued the validity of Article 165 of the Constitution;- That both the orders impugned are non-speaking and are passed without jurisdiction;- That on the one hand the assessing officer herself observed in the order that the appellant provided invoices of Rs.3 Billion approximately but on the other hand she also stated in the order that no evidence was provided by the appellant and that this contradiction shows that the officers were confused and had not looked into the record carefully;- That indirect tax is always a burden on the end consumer;- That no provincial authority is legally competent to tax Civil Aviation Authority;- That the authority has in fact taxed the CAA and not the appellant because this tax is to be collected from CAA by the appellant. Lastly , learned counsel has argued that the appeal may kindly be accepted. Learned counsel has relied upon;
1. [PLD 1972 SC 271 (SC), 1990 PTD 389 (KHC)]
2. 2004 PTD 1388 , 1990 PTD 903 , 2013 PTD (T rib.) 1402, 201 1 PTD (T rib.) 1399.
3. PLD 1968 SC 313 , 2016 PTD 2685 , 1997 PTD 1872
4. 2017 SCMR 1344 ;
5. 2015 PTD 619 (SC), 2017 PTD 1257 .
6. 2009 PTD 722 .
7. PLD 2005 SC 605 = 2005 PTD 2286 , 2002 PTCL 115 (LHC), 2010 PTD 967, 2010 PTD (Trib.) 2144, 2013 PTD (Trib.) 1402].
On the other hand, the contention of the appellant are controverted by Sadia Akmal Additional Commissioner Enforcement-I PRA Lahore and the learned DR. Both argued that the orders impugned were rightly passed and no violation of any law or the judgment of the Supreme Court was committed by the authority;- That all other departments providing different services to CAA, are paying tax to PRA and other provincial authorities;- That CAA is not an aggrieved party and it never challenged the imposition tax to the appellant;- That despite having an opportunity , CAA never filed any application before the authority , for becoming party to the proceedings. Lastly they argued that appeal may kindly be dismissed.
4. Arguments heard. Record perused.
5. Main thrust of the arguments of the appellant is that Civil Aviation Authority cannot be taxed by any provincial authority directly or indirectly and that since the appellant is an agent of CAA, taxing the appellant would amount to taxing CAA, indirectly and that the said action will become violative of the law laid down in the judgment 2017 SCMR 1344 . In humble view of this tribunal, the circumstances and merits of the case dealt with in the above cited judgment are markedly distinguishable from the case in hand. Without going into the detail of the said case, suffice it to mention that in the case referred above CAA was the main and actual aggrieve d party , the tax by the SRB was directly imposed on the CAA, the imposition of tax was challenged before the court of law by CAA itself and the matter was contested by the CAA up to the august Supreme Court of Pakistan. On the contrary , CAA does not figure anywhere in the present proceedings. It is the appellant who is trying its utmost to make it a case against the CAA whereas CAA never felt aggrieved of the impugned orders and never made any effort to become party to this proceeding. It is of much importance that during the pendency of the proceedings before the Commissioner (Appeals), CAA filed a Writ Petition No. 10127 of 2019, titled "Pakistan Civil Aviation v.' Punjab Revenue Authority and others " wherein the CAA contended that the assessment order was passed against the appellant directing him to collect the sales tax on services from CAA. It was further contend ed that the assessing officer did not appreciate the decision made by the Supreme Court of Pakistan in the case of "Sindh Revenue Board v. Civil Aviation Authority of Pakistan (2017 SCMR 1344 ). It was also contended that the CAA was not associated with assessment proceedings before burdening it with the tax in question. For clear understanding of the previous facts it would be appropriate to reproduce paragraphs 5 and 6 of the order dated 28.02.2019 passed in the above referred writ petition.
5. In presence of admitted fact that tax has been charged from respondent No. 5 (M/s Izhar Corporation Private Limited), the petition cannot be entertaine d. To determine whether respondent No. 5 is an agent of the petitioner , interpretation of contract between the petitioner and respondent No.5 is required. To see whether judgment in Civil Aviation Authority of Pakistan's case is applicable, an interpretation, under the determined facts is to be made by an Authority , competent under the statute.
This Court desist from embarking on, at this stage, to interpret the words "any person aggrieved" used in Section 63 of the Act of 2012. The question, whether the petitioner can join as party has to be decided at the first instance by the Appellate Authority .
6. At this stage, learned counsel for the petitioner does not press this petition if Commissioner (Appeals) is directed to entertain an application of becoming party and decide the same strictly in accordance with law .
The CAA did not press the said petition rather sought a direction to the Commissioner (Appeals) to entertain the application for becoming party to the proceedings but surprisingly the CAA neither filed any such application before Commissioner (Appeals) nor joined the proceedings in any manner what so ever. This inaction on part of the CAA proves that the proceedings in this case were not against the interests of the CAA and that the CAA is not an aggrieved party . The contention of the learned counsel that the impugned orders will have negative effect on the judgment of the Supreme Court of the Pakistan, is not correct as the proceedings in this matter do not affect the CAA. Had it been felt adverse, it would have been challenged by the CAA.
Ground 15., of this appeal is as under:- "that the entire edifice of RP's case is based on rightful implementation of SC's ruling in CAA's own case 2017 SCMR 1344 without attributing redundancy to any provision of law and without seeking any special treatment to the disadvantage of other persons while the Commissioner Appeals has erred to observe otherwise".
The most concerned persons/entity , for implementation of the above mentioned, judgment is CAA, but as already discussed above, the said entity has never tried to become party to the proceedings and to put forth its version. In humble view of this tribunal, the appellant is trying in vain to get a relief, not for itself rather for CAA and that too on the basis of a wrongful notion of law and facts hence, this plea ground of the appellant was rightly rejected by the Commissioner (Appeals) PRA. Lahore.
6. It is an admitted stance of the appellant that there is a contract between CAA and the appellant for building a car park at Allama Iqbal International Airpo rt Lahore. Although the appellant provided some documents to the assessing officer but despite demand the contract was not provided by the appellant. The said contract is an important document and the appellant was required to produce it before the concerned officer but he failed to do so which shows that appellant has tried to conceal something from the PRA. This document was also important to prove the status of the appellant being an "Agent" of the CAA. Shyness of the appellant in producing the said contract suggests otherwise.
7. The grievance of the appellant that the assessing officer failed to tax the invoice value or receipts by the RP, has already been redressed in the impugned order passed by the Commissioner Appeals and that is why the assessment order was modified which resulted into reducing the tax demand.
8. Both the orders impugned, are well reasoned and speaking order wherein all the aspects of the case as contended by the appellant were attende d, discussed and decided effectively . However, this tribunal has observed that the order of the assessing officer has some over doing to the extent of making observations, regarding the liability and responsibility of the CAA. Since CAA was not party to the proceedings therefore the assessing officer was not required to make any observation or decision against it. The said discussion, observation and decision, touching the responsibilities and liabilities of the CAA is declared unwarranted and not a part of the said order .
9. The corollary of the above discussion is that the appeal in hand has no merits hence, dismissed.
The Registrar of the Tribunal is directed to communicate this order to all concerned immediately . File of appeal be consigned to record room.