ZAHID SIKANDAR, JUDICIAL MEMBER. Through these miscellaneous applications, the applicant/department seeks rectification of the Tribunal's consolidated order' dated 03.08.2017 passed in S.T.As. Nos.325 to 328/LB/2017.
2. The learned counsel appearing on behalf of the applicant contends that this Tribunal passed the impugned order beyond lawful jurisdiction. It is contended that the ATIR while passing the impugned order erred in law by modifying the CIR(A)'s order to the effect that CIR(A)'s direction regarding remand of case for de novo consideration is vacated. The learned counsel maintained that provisions given in section 45(2) were completely ignored which empowers the CIR(A) to pass any order he thinks fit if he does not inquire the matter himself. The learned counsel submits that the vacation of the order of the CIR(A) is patently illegal and a clear mistake of law floating on the surface of the impugned order, hence, warrants rectification. Finally, the learned counsel prays for the acceptance of the titled rectification applications. Conversely, the learned AR for the respondent supported the impugned order being rightly passed without any mistake or error.
3. Arguments Heard, Order perused.
4. It is the claim of the applicant that the CIR(A) is empowered to remand the case under section 45(2) which provides that the CIR(A) may pass any order as he thinks fit if he does not inquire the matter on his own. The record reflects that the respondent taxpayer was alleged to be involved in a evasion through making taxable supplies without obtaining STRN and charging sales tax on various taxable supplies. Assessm ent proceedings were initiated against the respondent and the respondent was charged sales tax confronted along with default surcharge and penalty. The taxpayer filed appeals before the CIR(A) who annulled the impugned drder and remanded back the matter to the OIR for decision afresh through a speaking order. This tribunal relying upon the decision of the Hon'ble Lahore High Court in a case titled as CIR v. Supreme Tech observed that the appellate authority exceeded its jurisdiction in remanding the case back for de novo consideration and vacated the impugned remand order and maintained the annulment of assessment order.
The relevant extract of the impugned Order under challenge is as under: "6. We have heard both sides and perused the record. We have carefully gone through the impugned order of the learned CIR(A). Operative part of his decision is duly reproduced supra.
Admittedly, the impugned assessment order passed by the Deputy Commissioner Inland Revenue was without jurisdiction, hence, it was rightly annulled. The learned CIR(A) howover, exceeded his jurisdiction in remanding the case for de novo consideration. Subsection (3) of Section 45-B of the Sales Tax Act, 1990 is unambiguous and clearly prohibits remand of the case for de novo consideration by the Commissioner (Appeals). The Hon'ble Lahore High Court held in the case of CIR v. Supreme Tech International that remand for de novo consideration is prohibited under section 45B(3) of the Act. Besides, remand in the case will also nullify provisions providing limitation. Statutory limitation cannot be extended through remand. Remand was set at naught the rights already accrued to the appellant The rival contentions of the parties regarding revenue involvement are not material as the case was decided on the issue of jurisdiction. The appellate authority rightly annulled the impugned assessment order but exceeded its authority in remanding the case for de novo consideration. Accordingly, the consolidated order passed by the CIR(A) in all the four appeals is modified to the effect that his order/direction regarding remand of the case for de novo consideration is vacated."
5. Question as to whether the CIR(A) has the power to remand the case to the Assessing Officer for de-novo consideration, came before the Hon'ble Division Bench of the Lahore High Court in the case bearing S.T.R. No.12/2012 dated 28-10-2013 titled as Commissioner Inland Revenue v. M/s. Supreme Tech International, in which their lordship Mr. Justice Syed Mansoor Ali Shah has observed as under:- 'We have heard the learned Counsel for the parties and have reviewed Section 45-B of the Sales Tax Act, 1990. It is trite law that the power of remand is inherent in any judicial or quasi-judicial forum, however, it must be sparingly used. Reliance is placed on Messrs Karass Paints and Allied Industries, Faisalabad through Director v. Collector of Sales Tax, Faisalabad and others 2006 PTD 2482, Messrs Ayenbee (Pvt.) Ltd. v. Income Tax Appellate Tribunal (Headquarters), Karachi and others (2002 PTD 407), Chairman, WAPDA, Lahore and others v. Gulbat Khan (1996 SCMR 230), Rushpa Devi and others v. Binod Kumar Gupta and another (AIR 2004 SC 1239) and Ashwinkumar K. Patel v. Upenda J. Patal and others (AIR 1999 SC 1125). In the light of the above case law, if we review Section 45-B of the Act it appears that the legislative policy behind the said provision is to curb protracted tax litigation and help disentangle the taxpayer from the extended litigation process. It is for this reason that power has been vested in the appellate forum i.e. Collector (Appeals) to make further inquiry as may be necessary to ascertain the fact rather than remitting the case to a lower forum, Having empowered the Collector (Appeals) to hold a further inquiry at the appellate stage, the law has also prohibited the remand of such a ease for de novo consideration.
It is axiomatic that avoiding long-drawn litigation under section 45-B(3) of the Act is equally beneficial for the taxpayer and the tax collector. Beneficial legislation needs to be liberally construed to actualize the object of the statute. We therefore hold that Collector (Appeals) cannot remand a case for de novo consideration to the lower forum but instead use the power or further inquiry to conclude the matter before him.
In this view of the matter, the question of law raised in the reference is answered in the negative.
Disposed of."
In view of the decision of case supreme tech supra, this Tribunal vacated the remand order.
6. The rectification is a jurisdiction ancillary to the appellate jurisdiction intended to rectify a mistake of fact or law apparent on the face of record which does not require investigation, appraisal of evidence, interpretation of law or an enquiry into facts. August Supreme Court of Pakistan in Commissioner of Income Tax Company's II Karachi v. Messrs National Food Laboratories (1992 PTD 570) enshrined the principle of identifying mistake of fact or law. Relevant part is reproduced as under: "5........
Section 35 of the repealed Income Tax Act, 1922 hereinafter referred to as the 'the Act' confers a power to rectify any mistake in the order which is apparent from the record. Such power can be exercised suo motu or if it is brought to the notice by an assesse. Therefore, essential condition for exercise of such power is that the mistake should be apparent on the face of record; mistake which may be seen floating on the surface and does not require investigation of further evidence. The mistake should be so obvious that on mere reading the order it may immediately strike on the face of it. Where an officer exercising power under section 35 enters into the controversy, investigation into the matter, reassesses the evidence or takes into consideration additional evidence and on that basis interprets the provision of law and forms an opinion different from the order, then it will not amount to rectification of the order. Any mistake which is nor patent and obvious on the record cannot be termed to be an order which can be corrected by exercising power under section 35. In this regard reference can be made to Sheikh Muhammad Iftikhar ul Haq v. Income Tax officer, Bahawalpur, PLD 1966 SC 524 and Pakistan River Steamer Limited v. Commissioner of Income Tax, 1971 PTD 204. In the present case the mistake pointed out by the petitioner was not of a nature to attract section 35 and therefore, the High Court has correctly answered the first question in negative."
(Emphasis supplied)
7. In Mushtaq Ahmad and Co. v. CIR, 2015 PTD 1926, it was held by this tribunal that an error of law or fact having direct nexus with a question of termination of rights of parties affecting their substantial rights or causing prejudice to their interest is not a mistake apparent from record to be rectified under section 221 of ITO.
8. The law intends rectification of an identified mistake within the existing final order and not another independent order for different reasons. After exercising original jurisdiction, the Tribunal becomes functus officio with a little window for rectification of a mistake which is an equitable remedy. The scope of section 221 of the ITO is restricted to rectify the mistake apparent from the record. The expression "mistake from the record" as used in section 221 of ITO means that error or mistake is so manifest and clear that if permitted to remain on record may have material effect on the case. There appears to be no error floating on the surface of earlier order passed by this tribunal which could be considered as a fair reasoning for rectification of the impugned order hence, these titled applications are misconceived.
9. Further, during the course of hearing the learned Counsel for the respondent stated that apart from filing these rectification applications the department also filed tax references before the Hon'ble High Court against the impugned decision of the ATIR and the tax references were dismissed as withdrawn as the matter of jurisdiction to hear the appeal had already been settled.
In order the support the submission, the learned counsel also placed upon coy of order of STR No. 237673/2018 titled as CIR v. Messrs Pakistan Wapda. After perusing the same we find the contention of the learned at as correct.
10. Against the order of the ATIR, any aggrieved party is entitled to file tax reference under section 133 of Income Tax Ordinance within 90 days of the communication of the impugned order. The taxpayer also has a right to file a rectification application against an error or mistake in the impugned order under section 221. However, once the matter arising out of the of order of the ATR has already been challenged by the applicant in the tax reference before the Hon'ble High Court and has attained finality, the applicant cannot be allowed to re-agitate the same matter by means of an alternative remedy that was not resorted to earlier. If this is allowed, this would go entirely contrary to 'Doctrine of election' which exists to ensure that once a litigant has made the choice of pursuing a certain course of action available to him or has abandoned a certain plea/action, he is not alloyed to re-open the same matter only because he has received unfavourable results in proceedings of his first choice. The applicant opted to file tax references against the order of the ATIR and also filed rectification applications. The Hon'ble Lahore High Court has dismissed the tax references as withdraws with the observation that the question of jurisdiction already stood settled. Now at this juncture, the department cannot be allowed to re-agitate the matter in the garb of rectification applications and that too after the dismissal of tax references.
11. In view of the above narrated reasons, the titled miscellaneous applications for rectification filed at the behest of the department are dismissed.
12. We order accordingly.