DR. TAUQEER IRTIZA, ACCOUNTANT MEMBER. The instant appeal has been filed by the appellant/taxpayer against the impugned Order No. 08/2021, dated 30-8-2021 passed by the learned Commissioner Inland Revenue (Appeals VII), Karachi, on the following grounds:- a) That the Impugned Order dated 09.06-2021 for blacklisting of Registration is ab initio void, illegal and without jurisdiction as the authority empowered under the referred provisions of law to suspend or blacklisted a Registered Person, has to proceed first under section 11 Act, 1990 as the case may be for determining the liability of tax or as the case may before recovery of tax non- levied or short-levied or any amount erroneously refunded which was "due process" of law to proceed accordingly, whereby to protect the right of individuals to be dealt with law is the inalienable right of every citizen under Article 4 of the Constitution of Pakistan, 1973. It is now a well settled principle of law that any exercise conducted without due process of law is illegal and Unlawful and without jurisdiction in violation of Article 4 of the Constitution of Pakistan, 1973, as same as also laid down by the Honourable Supreme Court of Pakistan in case of Aftab Shahban Mirani v. President of Pakistan and others reported as [1998 SCMR 1863] which is reproduced for reference as under: "Art.4----Due process of Law----Basic requirements The right of "access to justice to all" is a well-recognized inviolable right enshrined in Article 4 of the Constitution. This right is equally found in the doctrine of "due process of law". The right of access to justice includes the right to be treated according to law, the right to have a fair and proper trial and a fight to have an impartial Court or Tribunal". b) That it is very astonishing that how a person can be penalized through blacklisting order of STRN without any proper adjudication and without adjudging any, liability of sales tax against him, such kind of action by the tax functionaries is totally defiance of law which is not permissible under any provision of law of the land. The act of adjudication under Section 11 had require to be done at first, before taking the extreme step of suspension or blacklisting of Registration. The act of Suspension or blacklisting of Registration without adhering to any adjudication as provided under law for determination of the liability of tax. Reliance in this regard is placed on the judgment of a Division Bench of ATIR reported as [2012 PTD 337] which reproduced for reference as under: "Order of suspension of registration and ultimate order of their black-listing were initiated due to claiming of such excessive and abnormal refunds but all such act were premature, whimsical and assumptive without determining first admissibility of inadmissibility, "legality or illegality "genuineness or in-genuineness", "lawfulness or unlawfulness" of the taxpayers refund claims by adhering to due process of adjudication as provided under S.11(2) of the Sales Tax Act, 1990, which was to be done at the first, before taking of extreme step of blacklisting, had been taken at the last---Refund claims were found admissible by an independent adjudicating authority but he put a restriction on its sanctioning subject restoration of their status from the date of registration---All the proceedings in-between cup and lips were nullity in eves of law and whole exercise of suspension of registration became futile and ultimate order of blacklisting stood null and void in the eyes of law". c) That the entire proceedings can be conducting can be conducted through legal procedure as prescribed under section 25 of the Sales Tax Act, 1990. Whereby, the requisite Sales Tax Record which is retained in the possession of Appellant under sections 22 and 24 Act, 1990 and may acquire for examination/scrutiny the same record. Subsequently, the audit observation shall be issued on which is will be decided either issue notice under 38 in accordance with subsection (2) or subsection (3) of the Sales Tax Act, 1990 to Show-Cause Notice (SCN) under section 11 Act, 1990 the connected Sections with Section 25 Act, 1990. d) That the direct suspension and blacklisting of STRN impugned Order were extreme step having paralyzing effect on business of any commercial/manufacturer enterprise and on their financial reputation as well and such type of action should type of action should be taken as last resort alter establishing the gross violation of main factors i.e. "(i) if registered persons were found to have committed tax fraud, (ii) evaded tax and (iii) registered person had failed to deposit the tax due on his supplies despite having recovered it from respective buyers." e) That the respondent is a quasi-judicial authority is required to give reasons and any judicial findings which called speaking order manifesting by itself under section 24-A of the General Clauses Act (X of 1897). However, without discussing necessary facts and material on record is not a judicial order and consequently is nor sustainable in the eyes of law. f) Although the Appellant is the owner of Registered address No.1 situated at Plot No. CI-398, Sector 16-B, North Karachi Industrial Area, Karachi and having legal posses since registration with the titled holder of Murtaza Abdul Hussain in the Conveyance deed of purchased property duly Registered by the Sub-Registrar vide M.F. Roll No. 2055 dated 04-05-1995. Hence the allegation of non-existence is not sustainable in the presence of two physical verification reports dated 12-04- 2019 and 18-10-2019 issued by the concerned RTO's officials which are on record as evidence.
Hereby the allegation of non-existence at Registered addresses are not sustainable in the eyes of law. g) That the appeal is within time prescribed under section 46 Act, 1990. h) The Appellant craves permission for its counsel to raise or urge further grounds at the time of hearing of the appeal.
PRAYER It is, therefore, prayed in the interest of justice that the Appellate Tribunal Inland Revenue may be pleased to:
(i) That this Honourable Tribunal would set aside the impugned order of blacklisting dated 09-06- 2021 being illegal, without jurisdiction, arbitrary and violation of Section 21 and referred judgments of Apex Courts;
(ii) To direct the Respondent to restorate the STRN of Appellant's from blacklisting to operative as well as active at the entire official websites of FM.
Permanently and pending in disposal of the main appeal, may suspend the operation of impugned order of blacklisting dated 09-06-2021 to maintain the parity and refrain the Respondent from taking any coercive action, orders or notices.
(iv) To grant such further relief which the Appellate Tribunal Inland Revenue may deem fit and proper in the circumstances of the case including the cost of Appeal."
2. Brief facts of the case as transpired from the record are that the appellant was first suspended and later on black-listed vide blacklisting order No.CIR(ENF-II)/CTO/KHI/2021/5104 dated 09-06- 2021 on the basis that the appellant was found non-existing on the available address and the closing stock declared in the returns was also not available.
3. Being aggrieved with the black-listing order of the Commissioner Inland Revenue Enforcement-II, CTO Karachi, the taxpayer preferred appeal before this forum against the black-listing order No. CIR(Enf-II)/(CTO/KHI/2021/5104 dated 09-06-2021 passed by the CIR, Enf.II, CTO, Karachi.
4. On due date of hearing of instant appeal, Mr. Faraz Haroon, Advocate, appeared on behalf of the appellant/taxpayer whereas Mr. Qarib Abbas, learned D.R, represented the department and case was discussed with them in detail in the light of arguments from both the rival parties, the orders of both below authorities and record available to the court.
5. During the course of proceedings the A.R. contended that this perception, which was made the basis of blacklisting, that the appellant is not available on the given address is incorrect, as the department has conducted physical verification twice once on 12-04-2019 and secondly on 18-10- 2019 and verified the physical existence of the appellant on the given address on record. The A.R. produced copies of the aforementioned physical verification reports along with online verification of taxpayer's profile which is available on record.
6. The A.R. further stated that the appellant deals in textile articles (exports) on which no sales tax was chargeable. However, the right course of action available with the department was to take up the proceedings under section 11(2) of the Sales Tax Act, 1990 before blacklisting and order recovery of tax, if any, if the default was proved. However, no such proceedings under section 25 or 11 of Sales Tax Act, 1990 were taken up by the department before blacklisting the appellant. The A.R. relied on AT1R's decision reported as 2012 PTD 337, the relevant portion of which is reproduced below; "Order of suspension of registration and ultimate order of their black-listing were initiated due to claiming of such excessive and abnormal refunds but all such act were premature, whimsical and assumptive without determining first "admissibility of inadmissibility", "legality or illegality", "genuineness or ingenuineness", "lawfulness or unlawfulness" of the taxpayers refund claim by adhering to due process of adjudication as provided under section 11(2) of the Sales Tax Act, 1990- --Act, which was to be done at the first, before taking of extreme step of black-listing, had been taken at the last---Refund claims were found admissible by an independent adjudicating authority but he put a restriction on its sanctioning subject restoration of their status from the date of registration --- All the proceedings in-between cup and lips were nullity in eyes of law and whole exercise of suspension of registration became futile and ultimate order of blacklisting stood null and void in the eyes of law;
7. The A.R. further informed that after the black-listing the department initiated the recovery proceedings and passed an order under section 11(2) of the Sales Tax Act, 1990 vide Order No.C.NO.IRAO/ADC/ENC-II/CTO/KHI/2021/790 dated 29-06-2021, The appellant went into the appeal against the aforementioned order and the learned Commissioner Appeal vide his order No.08/2021 dated 30-08-2021 annulled the order of the assessing officer, hence no sales tax demand is outstanding against the appellant for the period under question.
8. The contention of the A.R. was examined in the light of record and documents available with court and was found to carry a lot of force. We have also carefully examined the blacklisting order and the arguments of the learned D.R. submitted during the course of proceedings.
9. In view of liberation made supra this court finds no reason to keep the status of registered person as blacklisted, hence the impugned blacklisting orders hereby annulled.
9. (sic) The appeal is disposed of in the manner as indicated above.