The above titled appeal was filed before this tribunal on 29.10.2019 against the order dated 17.09.2019, passed by Commissioner PRA Faisalabad.
2. Briefly the facts are that on 26.04.2018 Additional Commissioner , PRA Faisalabad issue a show-cause notice to the appellant alleging therein that being a company the appellant was required to withhold and deposit the sales tax on services but the authority found from the available record of the appellant that despite receiving taxable services (according to the following table) during the period from 01.03.2015 to 30.06.2016, the amount of sales tax of Rs.80,015,045 /- was not deposited.
Sr. No. Nature of taxable services receivedAmount paid Entry number of 2nd SchedulePunjab sales tax deductible and payable (Rs.)
1. Transportation 491,196,965/- 48 78,591,514/-
2. Contractual Execution of Work8,858,599/- 16 1,417,376/-
3. Commission 38,467/- 40 6,155 Total 500,094,031 80,015,045/- It was further stated in the said notice that since the appellant had committed the violation of sections 3, 4, 11, 14, and 16 of PSTSA, 2012 (hereinafter called The Act) therefore, why the amount may not be assessed and recovered along with default surcharge and penalty according to the relevant provisions of The Act. The first date of hearing was fixed for 08.05.2018 and then 22.05.2018 where after, the appellant filed a writ petition and the proceedings before the Additional Commissioner remained pending without adjudication until 19.07.2019 on which date, the writ petition was dismissed. Thereafter the date of hearing was fixed for 09.09.2019 and then to 13.09.2019, and finally the order impugned was passed on 17.09.2019 whereby the appellant was held liable to pay the above stated amount along with default surcharge and penalty . Feeling aggrieved of the said order , this appeal is preferred.
3. Learned counsel for the appellant has argued that the order impugned is bad in law and against the facts of the case;- That the order was passed in haste without allowing sufficient time;- That order impugned is against the rules of adjudication because the procee dings were initiated and heard by the Additional Commissioner but the impugned order was passed by the Commissioner without assuming the jurisdicti on;- That the impugned order is practically an ex-parte order:-That it appears to be a conscious step of the Commissioner whereby the right of appeal of the appellant was snatched;- That the show cause notice was wrongly issued under section 70 of The Act;- That the Commissioner failed to distinguish between the assessment of tax and withholding of tax;- That the show cause notice do not provide any reference to the figures quoted therein;- That the imposition of default surcharge and penalty without establishing mens rea is against the law and facts of the case. Lastly contends that appeal may kindly be accepted and the order impugned may be set-aside. Learned counsel has submitted a written "brief summary of grounds and evidence" (consisting 28 pages).
Learned counsel has relied upon the following case law;- i. 1999 PTD 1358 ii. 2019 PTD 1213 iii. 2015 PTD 2639 iv. 2009 PTD 1507 v. 2015 PTD 374 vi. 2018 PTD 1071 vii. 2017 PTD 1030 viii. 2019 PTD 776 ix. 2017 PTD 1579
4. On the other hand learned DR has opposed the merits of this appeal by arguing that the appellant's conduct before the Commissioner was contumacious as he failed to provide/submit any evidence despite availing many opportunities;- That the Commissioner granted sufficient time to the appellant and no haste is apparent on the face of record;-That Commissioner had the jurisdiction to adjudicate the matter therefo re order impugned was passed by him, in accordance with law;- That mere issuance of notice of hearing by the Deputy Commissioner does not affect the proceedings. Lastly contends that the appeal may kindly be dismissed as filed without merits.
5. Arguments heard. Record perused.
6. There is no denial of the fact that the show-cause notice dated 26.04.2018 was issued by the Additional Commissioner , PRA Faisalabad and he continued with the proceedings till 02.09.2019 on which date Deputy Commissioner PRA Faisalabad issued notice of hearing to the appellant, to appe ar before the Commissioner on 09.09.2019, for further proceedings. Neither in the said notice nor anywhere in the impugned order there is mention of any reason for assuming the jurisdiction and taking up the matter by the Commi ssioner himself. A similar type of proposition was dealt with by this tribunal in another case (Appeal No.71/2019) and it was observed and held by this tribunal as under;-
10. It is also observed by this tribunal, in this case as also in many other cases, the initial show-cause notice is issued by the Additional Commissioner but thereafter the proceedings are carried out by the Commissioner without mentioning any reason for the change of forum. Section 60 of PSTSA, 2012 explains the hierarchy of the adjudicating officers. Subsection (2) of the said section empowers the Commission er to adjudicate any case falling in the jurisdiction and powers of any officer subordinate to him. But this power is to be understood in the manner that if the Commissioner feels it appropriate he can initiate the proceedings himself which otherwise falls with the pecuniary jurisdiction of the subordinate officer but that does not mean that a case initiated by the subordinate officer is to be taken up by the Commissioner without mentioning the reason for the same because this act amounts to curtailment of a forum for the taxpayer . There is no cavil that Commissioner is empowered to take up any case falling in the jurisdiction of his subordinates however , this should be done by mentioning the reasons, for intimation of the taxpayer , but usually this is not done by the Commissioner which practice is against the spirit of law and it can also vitiate the proceedings.
In this view of the matter the order impugned is bad in law as it amounts to the curtailment of a right of appeal of the appellant.
7. Learned counsel for the appellant had also argued that the amount asses sed against him in the head of "transportation" is also against the law and facts because vide Circular No.2 of 2015 dated 01.09.2015 the Government of Punjab had decided to hold in abeyance the levy and collection of Services Tax on transportation of goods by informal non-corporate transporter of goods operating through "TRUCK ADDAS" until 31.12.2015, Learned counsel has further stated that said notification/circular remained effective till 16.03.2016. Apparently this contention of the appellant seems correct on legal side but it was duty of the appellant to submit documentary evidence to prove before the Commission r that he transported the goods through such "TRUCK ADDAS" and for that purpose the relevant record should have been produced before the Commissioner but the appellant failed to submit such evidence despite the fact that on 15.05.2018 the Additional Commissioner issued a letter/notice to the appellant whereby he was requested to provide the invoices/documents along with payment proof in respect of transportation, contractual execution of work and of commission paid to petroleum agent. It is noted by this tribunal that apparently both sides i.e., the appellant and the Authority overlooked the significance of letter dated 15.05.2018, may be because it was issued prior to the filing of writ petition before the Hon'ble High Court where after the, matter remained pending without any proceedings for more than a year. Be that as it may, the importance of those documents cannot be brushed aside by this tribunal because without looking into the said documentary evidence, no fair and effective decision can be passed. The record shows that the appellant acted in lethargy and the Authority acted in somewhat haste. After dismissal of writ petition the first date of hearing was fixed on 09.09.2019 and thereafter the case was adjourned to 13.09.2019 i.e., an adjournment of only four days was allowed and that too without reminding the appellant to submit the required documents. It is also notable that order impugned finds mention of the filing of written reply by the appellant on 08.05.2018 but surprisingly there is no mention of the detail/stance/defense of the appellant, taken in the said reply . This fact also strengthens the impression of this tribunal that the Commissioner has not only acted in haste but also failed to look into the reply of the appellant and to discuss and answer the grounds/defense taken by the appellant. In the said reply , the appellant had taken specific grounds/defense regarding the exemption of transportation services from withholding tax, vide circular No.2, stated above, about the deduction and deposit of the amount concerning the advertisement services, and regarding the commission paid to the petroleum agent as not falling in the ambit of PRA.
8. Considering the above discussed factu al and legal scenario of this case, this tribunal is of considered view that the case in hand is liable to be remanded back to the competent authority for deciding it afresh after giving only one clear opportunity to the appellant for submitting all the required documents/evidence including the documents mentioned in the letter dated 15.05.2018 . Resultantly the order impugned is set-aside and the appeal in hand is accepted in the above stated terms.
The Registrar of the Tribunal is directed to communicate this order to all concerned immediately . File of appeal be consigned to record room.