' SHAMEEM HUSSAIN KADRI, J.-By their order dated 22nd December 1970, the Income-tax Appellate Tribunal, Peshawar Bench, Peshawar, has referred the following question under section 17 of the Sales fax Act:- "Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that sarson oil though an edible oil was not exempt from the levy of sales tax under entry No, 23 of Notification No, 9 dated 27th June, 1951 as it was a vegetable product?"
' The assessee in this case is a manufacturer of oil from sarson and other seeds. For the assessm ent years 1960-61, 1961-62 and 1962 63, the Sales Tax Officer assessed sarson oil to sales tax at 61/1-2 by his three orders passed on 29th June 1968.
' Feeling aggrieved by these orders the assessee filed three appeals before the Appellate Assistant Commissioner, who vide his order dated 2nd September 1968, accepted them and held that there was no liability of the sales tax so far as sarson oil is concerned.
' Again three Appeals Nos. 9, 10 and 11 were filed before the Appellate Assistant Commissioner, Rawalpindi, on 12th May 1969, which were rejected by the said Officer vide order dated 17th July 1969. The assessee as well as the Department filed three appeals each before the Income-tax Appellate Tribunal which were disposed of by a consolidated ender of the Tribunal dated 13th April 1970. The appeals of the assessee were rejected whereas the appeals of the Department were accepted. The orders of the Saks Tax Officer were restored. The Tribunal was moved for reference by the assessee as well as Department to refer certain questions. The Tribunal has referred the above question on behalf of the assessee but has refused to refer the following question, framed by the Department:- " Whether on the facts and in the circumstances of the case the Tribunal was justified in maintaining that sales tax should be charged at the rate of 6.52% on sarson oil when it had itself held that it was edible oil (not mustard) and liable to tax at the rate of 10%?
3. Mr. Mohammad Ali Khan, learned counsel for the applicant referred to item No, 23 of Notification No, 9, dated the 27th June 1951, which exempts vegetable oil other than vanaspati or vegetable products. Explanation to this item added by Notification (ST) No, 430 (K)/1965, dated the 5th May 1965, is reproduced below:-- "The expression 'variaspati or vegetable products' as used in this item means any vegetable oil or fat, which whether by itself or admixture with any other substance has by hydrogenation or by any other process been hardened for human consumption."
He contends that this notification was retrospective in nature and there could be no liability of the assessee to pay the tax at the time when the assessment orders were made. He cited Whitney v.
Commissioners of Inland Revenue (1) in support of his submission that there are three stages for the imposition in of
(1) 1926 A C 37 ' tax, namely, the declaration of liability, the assessment and the recovery, and if at the time of recovery the law grants exemption to the assessee the tax is not chargeable. There is hardly any substance in the arguments raised, for there is no such dictum in the authority in support of this argument. He also cited Chatturam and others v. Commissioner of Income-tax, Bihar (1) in support of the above proposition. He placed reliance on Raja Bahadur Kamakshya Narain Singh, Ramgarh v. Commissioner of Income-tax, Bihar (2). The observation made by the Federal Court is reproduced hereunder:- "The fact that an appeal was pending against the assessment is a material fact. When an Appellate Tribunal (whether it is the Assistant Commissioner, or the Tribunal of Appeal, or the High Court, or the Federal Court) decides the appeal it has to do so according to the law then in operation. If pending the litigation or pending the appeal some relevant legislation is enacted by the appropriate legislative authority, the deciding Tribunal must give effect to it."
' It was argued that the same effect should be given to the notification. The above citation is hardly relevant for the Federal Court has nowhere held that the subordinate legislation could be made retroactive even without mentioning its retoractivity in the Notification. It is Legislature which can alone confer retroactivity to a piece of legislation and that too by making such a declaration in the Statute. Reliance is placed on Sh. Rehmatullah v. The Deputy Settlement Commissioner, Centre A, Karachi and others (3), Works Coperative Housing Society and another v. The Karachi Development Authority (4) and Collector of Central Excise and Land Customs and others v.Azizuddin Industries Ltd., Chittagong (5). Section 3 (4) of the Sales Tax Act clearly says that the tax shall be levied and collected on the value of the goods on the occurrence of any of the events, for instance when the good are delivered to the purchaser. In this situation it does not lie in the mouth of learned counsel for the applicant that the liability of the assessee to pay the tax is uncalled for.
4. We, therefore, answer the question in the affirmative. Respondent shall be entitled to costs.
(1) (1947) 15 I T R 302 (2) (1947) 15 I T R 311 3) PLD 1963 SC 633 (4) PLD 1969 SC 430
(5) PLD 1970 SC 439