SHAHID MASOOD MANZAR, CHAIRM AN.----Through the titled appeal, the taxpayer has challenged the impugned order dated 12.02.2018 passed by the learned CIR(A) Zone-I, Lahore on the following grounds: "13). That the adjudicating authorities adjusted the order in original as well as Order -in-Appeal without giving the proper hearing in the subject orders which is sufficient ground to vacate the order in original.
14. That the registered person provided soft copy data on the RCPS prescribed under the relevant procedure of law however neither the department process the claim, nor any hearing opportunity has been provided to the registered person.
15. That all the taxes has been duly verified by the concerned desk along with stock production and supplies of the registered person under the relevant period so rejection of refund without logic and merit is illegal, unwarranted, injustice and against the spirit of law .
16. That it is settled principal of law that proper hearing opportunity should be provided to the Appellant however in the subject case no hearing opportunity has been provided to the Appellant and the case was adjudged as ex- parte.
17. That impugned orders are manifestation of a slipshod exercise of legal discretion as respondent instead of dilating upon the allegations maintained in the show-cause notice and making the same basis of the order , he has jumped at jaundiced inference and passage of order under this scheme of action without sticking to available facts renders it a non-speaking exercise of executive discretion.
18. That during the hearing proceedings, against the alleged show cause notice all the relevant records/documents along with reply of the show-cause notice, were duly submitted before the adjudicating officer for adjudication.
Imperative to mention is the fact that provided record was never repudiated nor rebutted on the legal touchstone as alleged discrepancy if any was not unearthed in anyway , instead a hollow standpoint was held in hostility to legal rational and factual introspection and allegation of non provision of record is unfounded and cooked up.
19. That order -in-original as well as Order -in-Appeal speaks of the fact that entire episode from issuance of show- cause notice to the passage of order is structured on surmises and conjectures wherein all the documents which were placed for nullifying the crest discrepancies were not perused and order was passed in isolation from the produced record to legitimize unbridled discretion.
20. That the adjudicating officer himself admitted that FED is collectable on edible oil in sales tax mode within entitlement for adjustment/refund of Sales T ax in Sales T ax mode.
21. That it is fact that vegetable ghee and cooking oil are exempt from sale tax under at Sr.No.24 of Table 1 of Sixth Schedule of the Sales Tax Act, 1990 however at the same time the said vegetable ghee and cooking oil are dutiable under FED in Sales Tax mode @ 16 per cent and val" under "serial No.1 of table 1 of the first schedule of the Federal Excise Act, 2005 read with section 2(21a), 7 and Sr . No.1 of the Second schedule Ibid.
22. That under the above said discussion the adjudicating officer himself admitting that vegetable ghee and cooking oil are dutiable under FED in Sales Tax mode @ 16 per cent and val "under "serial No. 1 of table I of the first schedule of the Federal Excise Act, 2005 read with section 2(21a), 7 and Sr. No.1 of the Second schedule Ibid and at the same time the said officer is rejecting the refund claim under section 11(2) of the Sales Tax Act, 1990 which is himself contradictory order between the Sales T ax Act, 1990 and Federal Excise Act, 2005.
23. That it is the stance of the registered person that vegetable ghee and cookin g oil are exempt from sales tax under Sales T ax Act, 1990 however it is taxable under the Excise Act, 2005 in Sales T ax mode.
24. That the impugned order in original is deemed to be recognized as an act void ab initio as it carries, jurisdictional error .
25. That the impugned order in original is disclosing violation such as section, 14(1) of the Federal Excise Act, 2005 further read with rule 37 of Sales tax Rules, 2006 read with sections 29(1), 3, 6, 7, 8(1), 11, 22, 23, 26 and 66 of the Sales Tax Act, 1990 has been committed by the appellant neither disputed amount is placed nor transactional units is mentioned. Whereas there is no violation of any section of Federal Excise Act as well as Sales Tax Act, 1990. It is pertinent to mention here that the said amount was not claimed in the regular Sales Tax Return Cum Payment challan due to accruing the CREST discrepancies and that is why the said amount is claimed under section 66 of the Sales T ax Act, 1990 in spite the claim it in the regular or month wise.
26. That superior fora of the state have maintained the factum when a thing is to be done in a particular manner it is meant to be done in that manner and not otherwise.
27. That the impugned order is violative of the cardinal principle of rule of law thus same stands to be set aside on this score.
28. That the impugned order has been passed in a mechanical fashion and is bad in law thus cannot be sustained.
29. That the rejection of lawful input tax/adjustment/refund is not permissible wherever it is surfaced in consequence of taxable activity and addresses all the chain of stipulations thus it's being put at naught under the falsified notions is nullity in the course of law .
30. That appellant paid Federal Excise duty on local purchased raw cooking oil for producing cooking oil and paid again Federal Excise duty on its supplies as describes under section 7 of the Federal Excise duty on its supplies as mode. The said matter is pertaining to Federal duly under serial 2 of the second schedule read with section 7 of the Federal Excise Act, 2005, so, the Appellant is also directed to claim the refund under section 44(3) of the Federal Excise Act, 2005.
2. Facts of the case are that the appellant is aggrieved of assessment Order-in-Original No.1137 dated 11.08.2017 whereby the Assistant Commissioner Inland Revenue, Enforcement-19, Zone-III, Large Taxpayers Unit, Lahore observed that the appellant had filed a refund claim of sales tax pertaining to tax period April and May 2013 amounting to Rs.65,227,162/- under section 66 of the Sales Tax Act, 1990 which was not admissible under section 11(2) of the Sales Tax Act, 1990. The taxpayer filed appeal, against the said order of the OIR, before the learned CIR(A) who vide order under section 45B No.04 dated 12.02.2018 confirmed the order of the OIR. Hence, the instant appeal by the taxpayer .
3. Both the parties have been heard and relevant orders perused. The learned counsel of the taxpayer contended that the stance of the department regarding the exemption in the instant matter such as manufacturing of Cooking Oil and Vegetable Ghee is misconceived and contrary to the very arrangement as enunciated in sections 7, 8 of the Sales Tax Act, 1990 as these sections define the scheme of input tax. He further argued that the department has deliberately mixed the genre of product which is distinguishable from import to local purchase as sections 3 and 7 further defines the position when the appellant has also added value to the stage of value addition and paid sales tax and seeks the same tax credit under section 8(2) claimed the refunds as per law. The learned AR argued that the view of the department regarding the maintainability is also unfounded as proper T.No./Claim No. were allocated to the refund claims of the appellant and subsequently miss application of law took part by the assessing officer who wrongly viewed the matter under the head of exemption as it was to be treated with the fact whether value addition took place or not so much so the categorization of purchase from local market as RAW Material where tax was paid has not been brought into the fold of reason and juristic wisdom.
It is contended by the learned AR that the appellant paid Federal Excise Duty on local purchased raw material of cooking oil for producing cooking oil and paid Federal Excise Duty on its supplies as describes under section 7 of the Federal Excise Act, 2005, under Sales Tax mode. So, the said matter is pertaining to Federal Excise Duty under serial No.02 of the Second Schedule read with section 7 of the Federal Excise Act, 2005, so, the Appellant is also directed to claim the said refund under section 44(3) of the Federal Excise Act, 2005.
He also brought the fact before this Court that the Honourable FTO in the wake of complaint lodged by the appellant vide No.L TU/ST/ZONE-III/E and C-19/91 10 dated 30.03.2017 has already maintained the legality of the refund and directed the department to proceed the matter in the light of actual factual position instead of under the preconceived notion.
4. The learned DR on the other hand supported the impugned orders of the authorities below and prayed for maintaining of the same.
5. Both parties were heard and relevant record was also perused. We agree with the stance of the taxpayer that tax credit is admissible under law. Furthermore, the FTO vide its order on the comp laint lodged on 30.03.2017 has directed to proceed the matter in the light of actual factual position instead of under preconceived notion. Perusal of the impugned order reveals that refund of the appellant was considered inadmissible with the observation that it was claimed under section 66 of the Sales Tax Act, 1990 whereas in the instant case provisions of Federal Excise Act, 2005 were applicable. Considering the facts and circumstances of the case in its entirety we deem it appropriate to annul the impugned order with the direction to the appellant to claim refund under section 44(3) of the Federal Excise Act, 2005. The concerned processing officer is also directed to process/allow the same in accordance with law .
6. Appeal of the taxpayer succeeds in the manner discussed above.