SHAHID JAMIL KHAN, J. This judgment deals with misuse of the rectification jurisdiction under Section 57 of the Sales Tax Act, 1990 ("Act of 1990") by Appellate Tribunal Inland Revenue ("Appellate Tribunal"), in a matter, which had finally been decided by learned Division Bench of this Court in reference jurisdiction under Section 47 of the Act of 1990.
2. An appeal filed by respondent-taxpayer was allowed by the Appellate Tribunal, vide order dated 19.07.2012. Department filed Reference Application (STR No. 284/2012), which was allowed by learned Division Bench of this Court vide order dated 17.04.2017, deciding the case against respondent-registered person. Operative part of which is reproduced below:- "13. As already noted above, on 07-03-2009, the Petitioner issued an order under Section 25 directing the Respondents to produce its sales tax record for inspection but it did not. In the meantime, the Petitioner received an information that the Respondent was involved in massive tax evasion so he invoked Section 40B and ordered posting of Sales Tax officers at its premises to monitor its sales. Since we have already held that the Respondent was liable to be registered under the STA, no exception can be taken to the powers exercised by the Petitioner under Section 40B.
14. For the above reason, we answer the questions hereinabove in the "affirmative", i.e. in favour of the Petitioner and against the Respondent. Resultantly, these applications are allowed."
(emphasis supplied)
However, a rectification application was moved before the Appellate Tribunal, pleading that few grounds on merits raised by the registered person were not adjudicated upon. A writ petition (W.P.
No. 80455/2017) was filed, simultaneously for a direction to decide the rectification application.
Learned Single Bench directed the Appellate Tribunal, by framing questions, to see whether rectification application was maintainable. Appellate Tribunal answered the questions in favour of maintainability and rectified earlier order dated 19.07.2012 by a Bench consisting of two Members, other than the two Members, who decided the rectification application. The application for rectification was allowed on 10.10.2017, by adjudicating upon the grounds, allegedly not decided earlier, and appeal was allowed, reversing the earlier decision by Appellate Tribunal.
3. Learned counsel for respondent-taxpayer is confronted, at the outset, that impugned judgment is not passed as per the guidelines given by this Court in Commissioner Inland Revenue. v. M/s. Lahore Rubber Store (2022 LHC 7179) [LHC Website], therefore, the same is liable to be set-aside and rectification application should be decided afresh by the Appellate Tribunal by identify the mistake of fact, with reasons. He insists to argue the case on merits and read Paragraph 10 onwards, of the impugned order, to show that certain questions framed by learned Single Bench of this Court were answered before proceeding to decide the rectification application.
4. Heard. Record perused.
5. Before decision on merits, it is noticed by the Court that at the time of passing original order dated 19.07.2012 jurisdiction of rectification was not available. Section 57 of the Act of 1990, at that time, was allowing correction of clerical and arithmetical errors, which was substituted through Finance Act, 2013, effective from 01.07.2013. Both provisions are reproduced respectively:- "57. Correction of clerical errors, etc.-- Clerical or arithmetical errors in any assessment, adjudication, order or decision may, at any time, be corrected by the officer of Inland Revenue who made the assessment or adjudication or passed such order or decision or by his successor in office: Provided that before such correction, a notice shall be given to the registered person or to a person "affected by such correction," ______ "57. Rectification of mistake.- (1) The officer of Inland revenue, Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner.
(2) No order under sub section (1) which has the effect of increasing an assessment, reducing a refund or otherwise applying adversely to the taxpayer shall be made unless the taxpayer has been given a reasonable opportunity of being heard.
(3) Where a mistake apparent on the record is brought to the notice of the officer of Inland Revenue, Commissioner or Commissioner (Appeals), as the case may be, and no order has been made under sub-section (1), before the expiration of the financial year next following the date on which the mistake was brought to their notice, the mistake shall be treated as rectified and all the provisions of this Act shall have effect accordingly.
(4) No order under sub-section (1) shall be made after five years from the date of the order sought to be rectified."
(emphasis supplied)
Comparative reading of existing and repealed provisions of Section 57, confirms the legal position of absence of rectification jurisdiction for the order passed before 01.07.2013. The rectification of an order, being a substantive right, could not be applied retrospectively.
6. The impugned decision by Appellate Tribunal is in sheer violation of the mandate of rectification given by the statute, read with dictum of law laid down in Commissioner of Income Tax Company's II, Karachi v. Messrs National Food Laboratories (1992 PTD 570), wherein Hon'ble Supreme Court of Pakistan has unequivocally held that a mistake does not require re-appraisal of evidence or any interpretation of a provision of law.
Strangely, the Appellate Tribunal has decided main appeal, which attained finality after decision by learned Division Bench of this Court. The Appellate Tribunal has also violated the presumption of truth, under Article 129(e) of the Qanoon-e-Shahadat Order, 1984, attached with the judicial proceedings. August Supreme Court in Fayya z Hussain v. Akbar Hussain and others (2004 SCMR 964) has held that presumption of correctness is always attached with judicial proceedings, strong and unimpeachable evidence is required to rebut such presumption. Any ground not addressed by a judicial forum is presumed to have not been pressed and argued. To displace this presumption, strong evidence was required to be placed before the same Bench of the Appellate Tribunal, which alone, could decide that the grounds were pressed and argued but not decided. Such indecision, if proved, and recorded through speaking order, could be taken as identification of mistake of fact.
Perusal of both the orders show that the rectification application was allowed by another Bench, consisting of different Members and that too without determining the alleged mistake of fact. The practice of moving an application for rectification, with a delay, when original Bench is not available, should be attributed with mala fide, unless otherwise proved and delay in filing the rectification application is explained. Another Bench, before which the fact of indecision did not accrue, could not identify the alleged mistake. The Appellate Tribunal has in fact amended / reviewed the earlier order which had attained finality and merged into the judgment by Division Bench of this Court. Limitation of five years in rectification jurisdiction is meant to protect just decision and not to open a past and closed transaction or an order which had attained finality.
7. For what has been discussed above and under the facts and circumstances of this case, the following legal questions arise:- i) Whether rectification jurisdiction under Section 57 of the Sales Tax Act, 1990, extended to the Appellate Tribunal Inland Revenue on 01.07.2013, could be exercised retrospectively i.e., for an order passed on 19.07.2012? ii) Whether the Appellate Tribunal was justified to re-decide on the ground not attended in earlier order through rectification application, without identifying the alleged mistake of facts with reasons? iii) Whether plea of indecision of the grounds on merits, could be allowed, without rebutting the presumption of truth attached with judicial proceedings under Section 129(e) of the Qanoon-e- Shahadat Order, 1984? iv) Whether the Appellate Tribunal was justified to decide main case in a miscellaneous application, which had merged with the decision of High Court in Reference jurisdiction?
8. Our answer to the above questions is in negative, therefore, the impugned order passed by Appellate Tribunal is held to be without jurisdiction.
9. In view of the above, this and connected Reference Application (i.e., STR No. 162986 of 2018) is decided in favour of applicant-department and against the respondent-taxpayer.
10. Office shall send a copy of this order under seal of the Court to the Appellate Tribunal Inland Revenue as per Section 47(5) of the Sales Tax Act, 1990.