WAJID AKRAM, ACCOUNT ANT MEMB ER.----Titled appeal has been filed by the appellant/registered person directed against the Order-in-Appeal No.352/2018 dated 15.1 1.2018, passed by the learned CIR(A), Faisalabad .
2. Brief facts of the case are that during the audit of appellant-registered person for the tax period from 07-2014 to 06-2015, following discrepancies/deficiencies were observed as under-
1. Suppression of production and sales
2. Input Tax Adjustment not allowed under section 8(1)(A) of the Sales Tax Act, 1990.
3. Inadmissible input tax against invoices of suspended/blacklisted supplier .
4. Inadmissible input tax due to non-compliance of section 73 of the Sales Tax Act, 1990.
Based upon the above said discrepancies, the registered person was charged with the violation of provisions of sections 3, 3(1A) 4, 6, 7, 8, 8A, 10, 11, 22, 23, 26 and 73 of the Sales Tax Act, 1990 read with sections 2(14) and 2(37) further read with S.R.O 1125(I)/201 1 dated 31.12.201 1 SRO 154 dated 28.02.2013 SRO 221(I)/2013 dated 19.03.2013, SRO 682(I)/2013 SRO 898(1)/2013 and are called upon to show the cause under section 11 of the Sales Tax Act, 1990 as to why sales tax amounting to Rs.7,425,778 /- may not be recovered along with default surcharge and penalty under sections 34 and 33 of the Sales Tax Act, 1990 respectively . In response to the reply of the show-cause notice, appellant filed written detailed reply which was considered and denied the charges levelled against the appellant but adjudicating authority vacated the amount of Rs.6 257,263/- whereas upheld recovery of Rs.1,168,515/-along with default surcharge and penalty . The adjudication proceedings culminated in passing of Order-in-Original No.15/2018 dated 05.03.2018.
3. The appellant being aggrieved with the treatment accorded by the assessing officer filed appeal before the CIR(A) who rejected the appeal of the appellant. The appellant being dissatisfied with the orders of the authorities below filed instant appeal before the Tribunal.
4. The AR of the appellant besides assailing the orders of the authorities below on numerous grounds has also vehemently contested that principles/law settled by the Hon'able Lahore High Court in the Writ Petition No.37295 of 2016 (Messrs Hamza Nasir Wire v. Federation of Pakistan and others ) holds that a statutory delegate could not sub-delegate his or her powers whereas in the instant case, the ACIR passed the order under section 11(2) of the Act without having jurisdiction and lawful authority because the ACIR was not vested with the power/jurisdiction to issue a show-cause notice under section 11 of the Act in view of above mentioned decision of Hon'able Lahore High Court, Lahore. The AR added that the Commissioner Inland Revenue alone is vested with power and jurisdiction under section 11 of the Act hence orders of authorities below are liable to be cancelled on this legal ground.
5. The DR on the other hand, supports the orders of the authorities below .
6. We have given due consideration to the arguments advanced by the AR and DR and have perused the relevant available record. It is observed that the argument of A.R. as regard the point of jurisdiction i.e. the ACIR/assessing officer was not vested with the jurisdiction to issue the impugned notices/order as held by Honorable Lahore High Court Lahore W. P. No.37295 of 2016 titled Messrs Hamza Nasir Wire v. Federation of Pakistan and judgment of Hon' able Islamabad High Court cited as 2016 PTD 1675 titled Oil and Gas Development Company Ltd. v. Federal Board of Revenue as well as another reported judgment of Hon' able Islamabad High Court cited as 2016 PTD 2332 in case of Zaver Petroleum Corporation Ltd. v. Federal Board of Revenue carries weight. The relevant part of the judgment of the Hon'able Islamabad High Court cited as 2016 PTD 1675 as under:- "19. In the light of the above, the order dated 23.01.2014 issued by the Commission er Inland Revenue was without lawful authority and jurisdiction. The Board had expressly conferred power of adjudication under the Act of 1990 on the Commissioner vide order 21-01-2014. The later had no authority or 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. Pursuant to the Board's order dated 21-01- 2014."
7. It may be added that the ATIR, Islamabad Bench, while deciding taxpayer's appeal bearing S.T'.A. No.2/IB/2017 re: Messrs Mari Petroleum Company , Ltd., Islamabad has also decided the issue in favour of the taxpayer by following the above mentioned Islamabad High Court's judgment in following manner:- "We have perused the judgment of Hon'ble High Court very carefully . The Hon'ble court has discussed the issue of jurisdiction in cases of the Sales Tax comprehensively and decided the same in accordance with law by declaring the process of issuing notice under section 11 of the Sale Tax Act, 1990 as void if the same are issued other than the Commissioner who is notified/delegated the power/jurisdiction by the Board. Respectfully following dictum laid down by the Hon'ble Islamabad High Court, we are constrained to hold that the Assessing Officer was not empowered nor had jurisdiction over the case and he passed the void order without lawful authority . Consequently , the appeal is accepted and the orders passed by the authorities below are vacated being ab initio void and without jurisdiction."
8. After perusing the aforesaid judgment of honorable Courts we have no hesitation to conclude that impugned assessment order was passed by the assessing officer without any lawful jurisdiction hence the orders of authorities below are liable to be annulled and we order so. The appeal is accepted. The case is decided on legal premises, therefore, there is no need to discuss the merits of the case. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.