1. SALEEM AKHTAR, J.--These references relate. To sales tax assessment years 1967-68, 1968-69 and 1969-70 and will be disposed of by this judgment. The assesses filed quarterly returns in respect of four quarters relating to the assessment years 190,7-68 and 1968-69 after the expiry of 30 das of the end of the respective quarters. The return for the first quarter ending 30-9-1969 during assessm ent year 1969-70 was filed on 9-1-1970 but no returns were filed in respect of three remaining quarters. The jurisdiction in this case was originally vested in the Sales Tax Officer `B'
2. Division, Karachi but the Central Board of Revenue by its letter dated 12-11-1971 assigned these cases to the Commissioner of Sales Tax (investigation) Lahore. The letter assigning the cases was signed by the Second Secretary Central Board of Revenue. The Commissioner of Sales Tax (Investigation) then transferred the cases to Sales Tax Officer (Investigation) Circle-1 Karachi who issued summons in S.S.T. Form 24 on 14-4-1973 for all these years. The assessee appeared on 15-5- 1973 and filed revised returns showing total sales at Rs.4,92,697, Rs.26,64,571 and Rs.2,23,033 in respect of three years. The Sales Tax Officer by the assessment order for the year 1967-68 held that there was no provision for filing the revised return under the Sales Tax Act. He rejected exemptions and the sales declared and adopted figures of sales declared in the corresponding income-tax returns and framed the assessm ent accordingly. The sales declared for 1968-69 were accepted as they were reconcilable with the Income-tax return. The assessment for 1969-70 was completed on the basis of the sales shown in the revised return. The assessee filed an appeal before the learned Tribunal which rejected all the pleas raised by the assessee except the plea that the transfer of case by the Central Board of Revenue was not legal and entire assessment proceedings were invalid. Thus all the assessm ents were quashed. The assessment for the year 1969-70 was cancelled as it was framed under section 10(3) without invoking section 28.
3. Both the parties filed application for reference. On the application filed by the assessee the following questions have been referred: S.T.R. 89 /82.
(1) Whether in the facts and circumstances of the case the Tribunal was right in holding that the assessm ent framed under section 10(3) of the Sales Tax Act, without taking recourse to section 28 of the Act is proper, legal and valid?
(2) Whether in the facts and circumstances of the case the Tribunal was right in holding that the order of transfer of the appellant's Income-tax cases from the normal jurisdiction of the Income- tax Officer, `B' Division, Karachi to the jurisdiction of Commissioner of Income-tax (Investigation) was proper and valid for the purposes of Sales tax assessments as well?
(3) Whether in the facts and circumstances of the case, as stated in the statement of the case, the Tribunal was right in holding that there had been no violation of the principle of audi alteram despite the non-issuance of any notice of hearing after 19-5-1973 viz. Date on which the revised returns signed by the Director of the appellant company was placed on record?
(4) Whether the Tribunal was right in holding that the absence of some entries in the prescribed Form S.S.T. 24 was only of procedural nature and it did not cause any prejudice to the assessee?
(5) Whether the Tribunal did not fall into error in holding that the submission of draft order to the Commissioner of Income-tax for approval did not render the assessment order bad in law and void?
4. S.T.R.94/82: On defendants application the following question was referred: "Whether in the facts and circumstances of the case as recorded by the Tribunal in its consolidated order dated 2-4-1975, the Appellate Tribunal was justified in holding that the entire assessment proceedings adopted by the Sales Tax Officer (Investigation) were without jurisdiction and hence a nullity?
5. Question No .1 The contention of the learned counsel for the applicant is that as the returns were filed after expiry of the prescribed time of 30 days, they were not valid and legal and therefore, without recourse to section 28 of the Sales Tax Act, the Sales Tax Officer was not competent to frame assessment under section 10(3) on the basis of the said returns. The contention of the learned counsel for the applicant seems to be that as the returns were not filed as required by section 10(1) assessment could be made only as provided under section 28 and not under section 10(3).
6. Section 10 of the Sales Tax Act casts an obligation on every manufacturer, producer, licensed wholesaler and exporter to file quarterly returns of his sales giving details of sale made by him during the quarter. Such return is to be filed within 30 days of the end of the quarter. If returns are riled as stated above and the Sales Tax Officer is satisfied of their correctness he will frame assessm ent accordingly, But if he is not satisfied then he may call for such particulars, books of account of and documents as may be necessary to determine the tax. Section 10(iv) provides that where returns under subsection (1) have not been filed or if filed and the documents required have not been produced the Sales Tax Officer shall make assessment to the best of his judgment after hearing the assessee. Therefore in cases where return has not been filed within the prescribed time, the Sales Tax Officer has the authority to frame assessment to the best of his judgment provided before making such assessment the assessee is given an opportunity of being heard. In the year 1975 by Finance Act (L of 1975), section 10(7) was added which imposed another embargo upon exercise of such power under section 10 by providing that no assessment shall be made after the expiry of three years from the end of the year in which the sales were made. Thus within a period of three years from the end of the year in which the sales were made, if no return has been filed, the Sales Tax Officer is entitled to frame assessment. This provision will not apply to this case as the assessm ents relate to the sales during the year 1967 to 1970.
7. At this stage it will be proper to examine the provision of section 28 which reads as follows: "S.28. Tax not assessed.--(1) If for any reason in any year tax has escaped assessment or has been under assessed or assessed at a rate lower than that provided under this Act, or excessive relief or refund has been allowed, the Sales Tax Officer may--
(a) Where a return for the relevant quarter, quarters or year has not been filed, serve a notice at any time on the assessee and after making such enquiry as he considers necessary make the assessm ent at any time within two years from the end of the year in which such notice was served: (b)in other cases, a notice at any time within three years from the end of the year in which the assessm ent was first made or excessive relief was allowed or the order for refund was first passed, and after making such enquiry as he considers necessary reassess, at any time two years from the end of the year in which such notice is served, the tax payable, or relief or refund allowed, and the provisions of subsections (2), (3), (4), (5) and (6) of section 10 shall, so far as may be, apply according.
(IA) Notwithstanding anything contained in this Act, or any judgment or order of any court, tribunal or other authority, any assessm ent for the tax payable for any period beginning on the first day of April, 1954, and ending on the thirtieth day of June, 1965, made at any time before first day of July, 1971, shall be deemed to have been validly made and no assessment or re-assessment made, any other proceeding taken or notice issued, shall be called in question by or before any court, tribunal or other authority on the ground that, at the time the assessment or re-assessment was made, proceeding taken or notice issued, the time within which such assessment or re-assessment should have been made, proceeding taken or notice issued under this Act had expired.
8. Explanation. The expression tax payable under this Act', as used in this section, includes the tax payable by a licensed manufacturer in respect of partly manufactured goods under section 12."
9. Section 28 has undergone various changes and was amended in 1959, 1961, 1963, 1964, 1966, 1967, 1970, 1971, 1973, 1974 and 1975. The provision as applicable in 1967 are, to be considered here.
10. Subsection (1) of section 28 as substituted by Finance Act 1967 read as follows: "S.28(1) If any tax payable under this Act has escaped assessment or has not been paid in any year, the Sales Tax Officer, may at any time within five years of the end of that year assess the tax payable after issuing a notice to the assessee and making such inquiry as he considers necessary."
11. It is this provision which is applicable to the present cases because subsection (1) as it stands-was substituted by Finance Act, 1975. Therefore, under this provision a period of limitation of five years for initiating proceedings under section 28 was fixed.
12. Section 10 empowers a Sales Tax Officer to make assessment to the best of his judgment after giving the assessee an opportunity of being heard in cases where return has not been filed under section 10(1). No period of limitation for taking action under section 10(4) was provided. In 1975 section 10(7) was added which provided that no assessment under section 10(4) can be made after the expiry of three years from the end of the year in which the sales were made. So the Income-tax Officer under the unamended law applicable to the assessment years under consideration could exercise jurisdiction for which no period of limitation was provided. However in the absence of any period of limitation the Sales Tax Officer cannot be presumed to have unfettered power for all times to come and may exercise the jurisdiction at his own sweet will. It is well-settled principle of interpretation that all the provisions of an enactment have to be construed harmoniously. Section 28 is another provision which empowers the Sales Tax Officer to open assessm ent in the given circumstances within a period of five years from the date of assessment.
13. Therefore the intention of the legislation was to put a limit to such far-reaching power which may at time be harassing in nature creating uncertainty in the field of taxation which is not favoured. In this regard reference can be made to Commissioner of Income-tax East Pakistan v. Hussain Qasim Dada Karachi 1960 PTD 574. This is a case under the Business and Profit Tax Act, 1947 in which Business Tax Officer issued a notice under Section 11(1) on 16-1-1952 for the chargeable accounting period ending 14-7-1946 and 14-7-1947 and completed the assessment on 30-1-1952. On appeal to the Appellate Assistant Commissioner the assessments were set aside on 26-1-1953 on the ground that no prior approval for the assessment had been taken from the Inspecting Assistant Commissioner for the aggregation of the profit. The reassessments were completed on 31-5-1955 which were upheld in appeal on 8-2-1958. On further appeal to the Appellate Tribunal the assessm ents were set aside on the ground that the assessment proceedings were initiated after the period of limitation contained in section 14 of the said Act. This judgment was upheld by the High Court of Dacca. In an appeal before the Supreme Court while referring to Section 11 it was observed as follows:-- "No liability to pay the tax is created by this section for, as already stated, the charging section is section 4 and the tax is to be levied under that section but subject to the provision of the Act. It may be that whilst laying down the procedure it was not considered necessary by the legislature to prescribe any limitation. Apart from this, it may equally well be that the legislature did not feel the - necessity of fixing any period during which the assessment could be initiated in view of the fact, that by a subsequent section, namely, section 14, it was proposing to fix a time-limit within which profits, which have escaped assessm ent, may be made liable to the tax.
14. The provisions of Business Profit Tax Act particularly section 11 is analogous to section 10 of the Sales Tax Act with the difference that in the earlier Act returns were to be filed only after notice was issued by the Business Profit Tax Officer but under section 10(1) of the Sales Tax Act it is a statutory liability of the assessee to file return within 30 days from the end of the quarter. But this difference does not distinguish the case on the point at issue. Section 11 of Business Profit Tax Act provided for assessm ent without fixing any period of limitation as was the position under section 10 of the Sales Tax Act from the years 1967 to 1975. Section 28 of the Sales Tax Act at the relevant assessment year provided for a period of limitation of five years. In the Business Profit Tax Act the period of limitation under section 14 for reopening the assessment was five years. Therefore, the provisions of sections 10 and 28 of the Sales Tax Act before amendment in 1975 were similar to sections 11 and 14 of the Business and Profit Tax Act to the extent that no period of limitation was provided for making assessm ent but where assessm ent was made on ground that income has escaped a period of limitation was fixed. In this regard the Supreme Court had observed as quoted above and held that while exercising power under section 11 of the Business Profit Tax Act the period should be a reasonable period and within the limits of provided by section 14. Applying the same principle we are of the view that as at the relevant time no limitation for taking action under section 10(4) was provided but limitation under section 28 had been provided if return had not been filed under section 10(1) the Sales Tax Officer could initiate action under section 10(4) within a reasonable time.
15. The subsequent amendments which provide a time limit under section 10(7) point out to the fact that such action should be initiated as early as possible and without unreasonable delay. In our view such action should have been taken within one year from the end of the year in which the sale was made. Sections 10 and 28 cannot be construed to produce conflicting results, nor can section 10 as it stood before amendment in 1975, be extended to make section 28 redundant. The facts as stated, show that for the assessm ent years 1967-68, 1968-69 and 1969-70 the department issued notice on 14-4-1973 under section 10(4) and as it was beyond a reasonable period the entire proceedings were void and illegal. In view of the delay it was necessary to have resorted to section
28. Our answer is in the negative.
16. Question No.2: The assessee has challenged the transfer of cases from the jurisdiction of Income-tax Officer B'
17. Division, Karachi to the jurisdiction of Commissioner of Income-tax Investigation. The contention of the learned counsel for the applicant is that a particular case could not be assigned to the Income-tax Commissioner, Investigation. This contention does not seem to be correct. Section 5 of the Sales Tax Act defines Tax Authorities and provides that every Commissioner of Income-tax, Appellate Assistant Commissioner of Income-tax, Inspecting Assistant Commissioner of Income- tax, Tax Recovery Officer and Income-tax Officer shall exercise the powers of a Commissioner of Sales Tax, Appellate Assistant Commissioner, Inspecting Assistant Commissioner and Sales Tax Recovery Officer and as well as Sales Tax Officer respectively in relation to the same area and cases he exercises jurisdiction under the Income-tax Ordinance. 1979. Thus the Income-tax Authorities having jurisdiction to deal with Income-tax cases of assessee falling under their jurisdiction are competent to deal with Sales Tax Cases of the said assesses. Section 2(5) authorises the Central Board of Revenue to appoint any person by name or by virtue of office to act as Authorities of Income-tax mentioned above. Such appointed authority may exercise concurrent jurisdiction with the authorities mentioned under subsection (1) or may have exclusive jurisdiction as directed by the Board. Therefore, even in respect of a particular assessee or a case, the Board can appoint any person to act as specified Income-tax Authority. The appointment of Income-tax Commissioner Investigation as the Commissioner of Sales Tax was permissible under law anti further that the assignment of assessee's case to him was also proper and legal. The assessee has only challenged the transfer of case from Income-tax `B' Division to Commissioner Income-tax Investigation. For the afore stated reasons our answer is in the affirmative.
18. Question No.3: The learned counsel for the applicant has contended that the return was not signed by the Director and as he signed it after 19-5-1973 he was entitled to a notice before assessment was framed.
19. The return was signed by the Manager of the Company who as its principal officer was competent to sign it. A notice had already been issued and if the Director came forward and signed the return afterwards no notice was necessary as he had merely removed certain technical defect by signing the return accepting it to be correct. After his signature the return could not be treated to be a fresh return. Our answer is in the affirmative.
20. Question No. 4: The learned counsel for the applicant has pointed out that in the notice issued in Form SST-24 to the assessee/purpose for which it was issued was not specified in the blank space provided in the notice for this purpose or anywhere else. The notice was thus illegal and in violation of the principles of natural justice. In this regard it is pertinent to note that Income Tax Officer, Investigation Circle 3, had informed the assessee by his letter dated 30-12-1971 that its assessment cases for the aforesaid years had been transferred and when appearance was made in compliance with the notice issued in Form SST-24 the purpose for which it was issued was explained. If the defendant would have established that on the date of first appearance no time was granted to defend the case or explain its position, then possibly it could be alleged that some prejudice may have been caused to it. But in the absence of any proof that prejudice was caused to the assessee the principles of natural justice have not been violated. It was merely a minor technical or clerical defect which in the facts of the case did not cause any prejudice. We may clarify that in certain cases such lapse may amount to serve, prejudice to the party and in that event the principles of natural justice can be invoked. This however depends, on the facts of each case. The Tribunal has not found that any prejudice was caused to the assessee. Our reply is in the affirmative.
21. Question No. 5: It is an admitted position that the draft of the assessment order proposed to be passed in all the cases were submitted by the Sales Tax Officer to the Commissioner of Income Tax for approval. The Department's stand was that they were submitted to apprise the nature of the order proposed to be passed and not for the purpose of approval of the Commissioner of Income Tax. The Tribunal found that "it is not borne out from the record that the draft orders were in the least amended or modified by the Commissioner of Income Tax". The Tribunal disapproved this practice but ruled that such act will not make the order void.
22. Assessm ent order is made in exercise of quasi-judicial power by an assessing officer under section 10 of the Act. Under the scheme of the Act the assessment is to be made by the Sales Tax Officer and in cases where returns have been filed or have not been filed an assessee aggrieved by the assessm ent order has a right to write appeal before the Appellate Assistant Commissioner and if any party is dissatisfied with that order he can file an appeal before the Income Tax Appellate Tribunal. The cases where any tax has escaped assessment or has been under assessed or assessed at rate lower than provided under the Act or excessive relief or refund has been allowed the Sales Tax Officer may after notice to the Assessee frame assessment in the manner provided by section 28. The procedure for assessment shall be followed as provided by section 10 and an appeal shall lie in the same manner to the Appellate Assistant Commissioner and the Tribunal. In this hierarchy of appellate authorities the Commissioner of Income Tax does not come into the picture. However under section 16 of the Sales Tax Act, the Commissioner may of his own motion call the record of any proceedings under the Act in which order has been passed by a Sales Tax Officer or by an Appellate Assistant Commissioned' or by Inspecting Assistant Commissioner and may make such inquiry and pass such revisional order thereon not being an order prejudicial to the assessee as he deems fit. The only limitation placed on the Commissioner is that he cannot revise an order which is subject-matter of a pending appeal or that one year has passed from the date of the order. It was however left to his discretion to revise order passed more than one year after recording reasons for such action. Previously this suo motu revisional power could be invoked by an assessee by making an application to the Commissioner for revision of the order passed by the Sales Tax Officer. Therefore although now the assessee cannot invoke this jurisdiction the Commissioner has full powers to suo motu revise the order of the Sales Tax Officer. The Sales Tax Officer while passing an order acts as quasi-judicial officer and he should pass the order according to his own reasoning, thinking and finding after analysing evidence on record and applying the provisions of law. In arriving at his decision the Officer should not be influenced by any person be he his superior officer or any one else nor can he behind the back of the parties consult any other person or take advice for framing the assessment unless specifically provided by law.
23. The admitted position is that the Sales Tax Officer had submitted his proposed assessment order which according to the Tribunal was not changed. No provision in the Sales Tax Act provides for submitting the assessm ent order to the Commissioner for consideration, examination or approval.
24. The very fact that it was seen and not changed by the Commissioner shows that the Sales Tax Officer had obtained the blessing of the Commissioner before passing this order. This means that impliedly approval was accorded. There is nothing on record to show that the Commissioner returned the order stating that he is not required to look into it. The Commissioner being a revisional authority the possibility of exercising such jurisdiction at a future date cannot be overruled. Therefore in all propriety and to maintain purity and dignity of the order neither the proposed order should have been forwarded to the Commissioner nor the Commissioner should have allowed to adopt such procedure. The Sales Tax Officer may pass the order according to his own conscious understanding, The Courts and quasi-judicial Officers are required not only to do justice but to perform their duties in such a manner that justice is seen to have been done. In discharge of such duties no steps should be taken which may create apprehension in the mind of a litigant that justice may not be done. If a subordinate officer submits his proposed order to his revisional, appellate or superior authority and after his approval announces it then it will furnish a strong ground for challenging it, although such authority may not have amended the order. Such reference indicates that the judicial mind of the officer passing the judgment was not free and sufficiently tainted as he had in mind the feeling that he has to submit the proposed order to his superior officer and thus may have thought fit to make such an order which may be acceptable to him. These factors which may have been in the mind of the Sales Tax Officer are sufficient to tarnish the purity of the order and we are therefore, of the view that the Tribunal was not justified in holding that there was no wrong in submitting the order to the Commissioner. In fact the whole judicial process culminating in the assessment order was completely vitiated. Our answer is therefore in the affirmative.
25. Question in STR 94/82: The ordinary jurisdiction to deal with the cases was vested in the Sales Tax Officer `B' Division Karachi but by a letter of Central Board of Revenue dated 12-11-1971 they were assigned to the Commissioner Income Tax Investigation, Lahore. This letter was signed by the Second Secretary Board of Revenue. The Income Tax Commissioner Investigation then transferred it to Sales Tax Officer Central ---I--- Karachi. After assessments were framed the assessee filed four appeals before the Tribunal. One of the grounds for challenging the orders was that the order assigning jurisdiction to the Commissioner of Sales Tax. Investigation, was signed by the Second Secretary Central Board of Revenue and hence it was not a valid order in law. Consequently Commissioner of Sales Tax investigation had no jurisdiction to transfer these cases to the Sales Tax Officer, Investigation Central `I' Karachi and hence the entire proceedings were void and Sales Tax Officer had no jurisdiction to make the assessment. The learned Tribunal allowed the appeal holding that the letter assigning the case to the Income Tax Commissioner Investigation was issued under the signature of Second Secretary of Central Board of Revenue, observing that the departmental representative could not produce before them or draw their attention to any order of the Central Government empowering the Second Secretary to perform function of the Secretary under rule 2(d) of the Central Board of Revenue Rules 1967. It was further held that rule 4(1) does not permit that the order or decision of the Board may be notified or issued under the signature of any other person except the Secretary or the Member and therefore the transfer was held to be without jurisdiction. Reliance was placed on Income Tax Officer Investigation Central III Dacca and another v. Shaikh Nasim Ahmad 1966 PTD 657. After the order dated 2-4-1974 was passed by the Tribunal, the Sales Tax Officer Investigation Circlc-1 presented an application on 25-2-1976 under section 30(2; of the Sales Tax Act 1951 seeking rectification of the Tribunal's consolidated order dated 2-4- 1975 on the ground that the Income Tax Officer Investigation who had appeared before the Tribunal had produced the order of Central Government No. C. No. 58(a) (A) Con/66 dated 21-9-1967 empowering Second Secretary to perform the function of the Secretary under rule 2(d) of the Central Board of Revenue Rules 1967. After notice and thorough investigation the application was rejected and it was observed that the said order was never produced before the Tribunal during the hearing of appeal. From the orders of the Tribunal deciding the appeal and application for rectification of order it is clear that the Department did not produce the order dated 21-9-1967 and raised a false plea for achieve its object. This has not been challenged. Therefore the order of the Tribunal is based on record which existed at the time of hearing of appeal. The Tribunal has to pass orders on the basis of the record available to it. In this regard one has to examine the case carefully and critically and if the, documents arc such which a party has to produce the same may not be looked into if not produced at the relevant time, but if reference is to be made to ;tic notifications or gazettes then they have to be treated differently from the documents which require proof. Duly notified order can be referred by looking to the gazettes. It is the primary duty of every party to produce all the records and documents relevant to the case. But so far statutes, rules and notifications which are notified and gazetted are concerned they should not escape notice of the Court and all efforts should be made to find them out so that a wrong order may not be passed.
26. Therefore the Court should not entirely rely upon the parties and their advocates for producing these documents but should make search, to find out the state of law applicable to a case.
27. From the question it is clear that the facts and circumstances as found by the Tribunal have not been challenged. The Tribunal has categorically held that no order was referred or produced by the Department. Therefore in the absence of any order authorising the Second Secretary to issue order, the conclusion drawn by the Tribunal is unexceptionable.
28. We answer the question in the negative.