Through instant Reference Application under Section 47 of the Sales Tax Act, 1990 ("the Act of 1990 "), following questions of law, asserted to have arisen out of impugned judgment dated 23.09.2008, passed by learned Customs, Central Excise Sales Tax Appellate Tribunal, Islamabad Bench-II ("Appellate Tribunal "), have been proposed for our opinion:
(i) Whether Sales Tax is chargeable on freight charges, where freight was not received as a part of the price but was separately borne by the purchaser? (ii) Whether the limitation period for completing the adjudication proceedings as mentioned under Section 11(4) and 36(3) is mandatory?
(iii) Whether the authority , who has to issue a Show-Cause Notice, responsible to make out a cause in the Show- Cause Notice itself under which provision the case falls and will also have details of allegations, if authority fails to provide any detail of allegations, the Show-Cause Notice is illegal, invalid in the eye of law?
(iv) Whether non-mentioning of charges in the Show-Cause Notice does not amount to violation of principle of natural justice?
(v) Whether findings of mala fide is essential for imposition of penalty and additional tax under Sections 33 and 34 of the Sales Tax Act, 1990?
2. Brief facts of the case are that respondent-department issued a Show-Cause Notice ("SCN") to applicant- taxpayer , alleging therein that applicant-taxpayer had not paid sales tax on total value of supplies and evaded sales tax amounting to Rs.16,40,632/-, which culminated in passing of order-in-original ("ONO") dated 02.06.2003.
Feeling aggrieved, applicant-taxpayer filed appeal before Collector (Appeals), which was rejected vide order dated 31.03.2005. Being dissatisfied, applicant-taxpayer filed appeal before learned Appellate Tribunal, which was dismissed vide judgment dated 23.09.2008. The said judgment has been assaile d by applicant-taxpayer through instant Reference Application.
3. Learned counsel for applicant-taxpayer submits that order-in-original is barred by time, having been passed after expiry of more than 01-Year, 06-Month s. He further submits that learned Appellate Tribunal, while passing impugned judgment, has not given any findings as to whether SCN is barred by time or not, thus, impugned judgment is violative of Section 24-A of the General Clauses Act, 1897, and law laid down by the superior Courts.
In the end, he submits that impugned judgment is not sustainable in the eye of law .
4. Confronted with the above, learned counsel for respondent-department, despite arguments at some length, failed to rebut that impugned judgment lacks valid lawful reasons and does not cover all aspects of the matter .
5. Arguments heard. Available record perused.
6. The operative part of impugned judgment dated 23.09.2008" is reproduced hereunder:- "7. ...The respondents have further claim ed that under Article 254 of the Constitution of the Islamic Republic of Pakistan, it is explicitly provided that any order passed after the expiry of the limita tion period will not be invalid or void ab-initio. In this behalf, judgment of the honourable Supreme Court of Pakistan in case of Muhammad Nadeem v. State 1992 PCr.L.J 1520 is referred. I have considered these divergent views of the rival parties and hold for the sake of consistency that the time limit prescribed in the proviso to section 11 and section 36 of the Sales Tax Act, 1990 is of the nature of direction as the same does not provide the consequences in the event of non compliance of the aforesaid limitation period. ..."
7. Perusal of the Appellate Tribunal's judgment shows that the Appellate Tribunal has not applied its independent mind to the contentions raised by learned counsel for the applicant-taxpayer qua the order-in-original being barred by time by more than 01 Year, 06 Months and latest judgment of the Hon'ble Apex Court, reported as The Collector of Sales Tax, Gujranwala and others v. Messrs Super Asia Mohammad Din and Sons and others (2017) 116 TAX 194 (S. C. Pak.) = 2017 PTD 1756 = PTCL 2017 CL. 736), before holding that such an order is not valid Learned Appellate Tribunal has simply referred the IB order of the adjudicating officer which is not a proper exercise of jurisdiction within the contemplation of law laid down by the Hon'ble Supreme Court of Pakistan in case titled Commissioner of Income Tax Companies Zone-II Karachi v. Messrs Sindh Engineering (Pvt.)
Limited, Karachi (2002) 85 TAX 386 (SC Pak.) = 2002 SCMR 527 = 2002 P7D 419). The relevant portion of said judgment is reproduced hereunder:- "10. As it has been pointed out hereinabove that Income Tax Appellate Tribunal had not independently assigned any reason in holding that respondent organization was a public company because it has based its finding on some earlier decision referred to hereinabove and we were not aware that what reasons prevailed upon learned Tribunal while deciding those cases. Thus in such-like situation it was obligatory upon the Tribunal either to have disclosed the facts as well as reasons of earlier case on which reliance was placed or the respondent's case should have been examined independently . As such, we are of the opinion that the Income Tax Appellate Tribunal did not exercise its jurisdiction in accordance with law. Therefore, question of non-exercising of jurisdiction properly by the Tribunal, being a question of law, was liable to be answered by the High Court its appellate jurisdiction under section 136(2) of the Ordinance but it failed-to do so."
8. Even otherwise, impugned judgment has been passed in violation c of the Section 24-A of the General Clauses Act, 1897, inasmuch as it lacks valid lawful reasons. It is now well-settled that an order passed by judicial or quasi judicial authority , has to be supported by lawful, reasons. In this regard, reference can be made to the judgments reported as Adamjee Jute Mills Ltd. v. The Province of East Pakistan and others (PLD 1959 SC (Pak.) 272), Gouranga Mohan Sikdar v. The Controller , Import and Export and 2 others (PLD 1970 SC 158), Mollah Ejahar Ali v. Government of East Pakistan and others. (PLD 1970 SC 173), Muhammad Ibrahim Khan v.
Secretary , Ministry of Labour and others (1984 SCMR 1014 ), Al-Hadayat Textile through Proprietor v.
Soneri Bank Limited (2003 CLD 105) and Wagar Alam Saeed v. District Coordination Officer/Chairman and 3 others (2005 YLR 1742 ).
9. In our opinion, it was obligatory upon learned Appellate Tribunal to have examin ed the case independently and given the reasons in support of the impugned judgment.
10. In this view of the matter , the impugned judgment dated 23.09.2008 is set aside, and the matter is remanded back to learned Appellate Tribunal for decision afresh after providing opportunity of being heard, to both the parties.
11. For the reasons stated above, instant Reference Application is disposed of.
12. Office shall send a copy of this order under seal of the Court to learned Appellate Tribunal as per Section 47(5) of the Act of 1990.