MR. S.M. KAZIMI, MEMBER (TECHNICAL).-(1). This judgment disposes of the appeal filed by M/s. SAC Group of Industries Ltd., Hattar, against the Order-in-Original No. 11/2002 dated 20.03.2002 passed by the learned Additional Collector of Customs (Adjudication), Peshawar.
2. Briefly, the facts of the case are that while auditing the record of M/s. SAC Textile Mills Ltd., Hattar, the audit team of the Directorate General of Audit Revenue Receipt (DGARR), Lahore, observed that during the period from 11/98 to 04/99, the said registered person had made supplies of sales taxable goods to M/s. Crescent Textile Mills Ltd., Faisalabad, free of sales tax under SRO 826(I)/98 dated 21.07.1998 despite the fact that the operation of the said notification had been suspended by the Central Board of Revenue vide its OM C. No. 2(19)/STM/98 dated 07.12.1998, resulting in short- realization of sales tax amounting to Rs. 6,222,171/-. Vide notice C. No. ST/Audit/65/99/5124 dated 23.06.1999, the Additional Collector of Sales Tax, Peshawar required M/s. SAC Textile Mills Ltd., Hattar, to show cause why the said of Rs. 6,222,171/-, alongwith the additional tax due, should not be recovered from them besides penal action under section 33 of the Sales Tax Act, 1990. On creation of the Adjudication Collectorates, the Additional Collector (Adjudication) heard, Assistant Manager of M/s. SAC Textile Mills Ltd., Hattar, and found that the Special Exemption Certificate of M/s. Crescent Textile Mills Ltd., was not re- verified and was, therefore, doubtful. He, therefore, passed the impugned order holding that amount of Rs. 6,222,171/- was payable by M/s. SAC Textile Mills, Ltd., Hattar, alongwith the additional tax due thereon. He also imposed a penalty of 5% of the tax involved on M/s. SAC Textile Mills Ltd., Hattar, under section 33 of the Act. Hence this appeal.
3. During the course of hearing before us, the learned counsel for the appellant stated that notification No. SRO 826(I)/98 dated 21.07.1998 was rescinded with effect from 01.07.1999 vide notification No. 543(I)/99 dated 07.05.1999. He produced letter C. No. IV-ST(4)107/98/1291 dated 24.06.2002 from the Assistant Collector, Audit-IV & Registration, Faisalabad, confirming that the Special Registration Certificate No. 08-01-5209-000-02 was issued on 31.10.1998 by the Collector to M/s. Crescent Textile Mills Ltd., Faisalabad, under SRO 826(I)/98 dated 21.07.1998. He argued that supplies made by the appellant, to M/s. Crescent Textile Mills Ltd., during the period from 31.10.1998 to 30.06.1999 (i.e. The validity of that Special Registration Certificate No. 08-01-5209-000-02) was free of sales tax under the then provisions of section 60 of the Sales Tax Act, 1990, read with SRO 826(I)/98 dated 21.07.1998. He prayed for setting aside the impugned order and for acceptance of the appeal.
4. The learned Law Officer stated that supplies made after suspension of the operation of the said notification by the Central Board of Revenue on 07.12.1998 was not lawful. In reply to a query, he admitted that SRO 826(I)/98 dated 21.07.1998 was rescinded with effect from 01.07.1999 vide notification No. SRO 543(I)/99 dated 07.05.1999. He prayed for rejection of appeal at least for the period from 07.12.1998 i.e. The date when the operation of SRO 826(I)/98 dated 21.07.1998 was suspended by the Central Board of Revenue.
5. Having heard the parties and on perusal of record of the case, we find that the provisions of section 21 of the General Clauses Act, 1897 (No. X of 1897) state as follows:-- "21. Power to taken to include power to add to, amend, vary or rescind orders, rules or bye-laws. - Where by any General Act or Regulation, a power to issue notifications, orders, rules or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any), to add to, amend, vary or rescind an notification, orders, rules or bye-laws, so issued.".
6. The aforesaid provisions of section 21 of the General Clauses Act, 1897, clearly show that only Federal Government, through a notification in the official Gazette of Pakistan, could validly add to, amend, vary, or rescind the Federal Governments notification No. SRO 826(I)/98 dated 21.07.1998 issued in exercise of the powers conferred by the then provisions of section 60 of the Sales Tax Act, 1990. Therefore, it is only the Federal Government's notification No. SRO 543(I)/99 dated 07.05.1999 which validly rescinded the Federal Government's notification No. SRO 826(I)/98 dated 21.07.1998.
Central Board of Revenue's letter C. No. 2(19)STM/98 dated 07.12.1998 is only an administrative instruction to its Collectors informing that SRO 826(I)/98 dated 21.07.1998 is under review by the Federal Government and, therefore, no new/further Special Registration Certificates should be issued by the Collectors under SRO 826(I)/98. In fact Central Board of Revenue's that letter states that the Special Registration Certificate issued under SRO 826(I)/98 should not exceed 12 (i.e., 17 Special Registration Certificates issued by various Collectors minus the 5 such Special Registration Certificates surrendered by the parties). Again in paragraph 3 of CBR's subsequent letter C. No. 3(28) STP/98 dated 02.04.1999, it was clarified that "since the 12 persons, mentioned in Col (6) of paragraph 5 of the Board's aforesaid letter dated 07.12.1998 have acquired a vested right for the year 1998-99 in terms of rule 3(5) of the SRO 826(I)/98, they have the option to continue availing of the benefits thereof until 30.06.1999. However, no new Special Registration Certificate should be issued under SRO 826(I)/98.". CBR's aforesaid letters do not deny the benefits of SRO 826(I)/98 dated 21.07.1998 to the 12 Special Registration Certificate holders if they acquired such certificate under the said SRO 826(I)/98 on any date prior to 07.12.1998 and did not surrender it prior to 01.07.1999 when the said SRO 826(I)/98 stood rescinded in terms of SRO 543(I)/99 in accordance with section 21 of the General Clauses Act, 1897. Since the prosecution have not shown any case that Special Registration Certificate No. 08-01-5209-000-02 issued by the Collector of Sales Tax, Faisalabad, on 31.10.1998 in favour of M/s. Crescent Textile Mills Ltd., Faisalabad, under SRO 826(I)/98 dated 21.07.1998 was surrendered or cancelled by the said Collector of Sales Tax, Faisalabad, on any date before 01.07.1999, the impugned order has no force of law and is set aside accordingly.
The appeal stands disposed of as accepted.
7. Inform all concerned accordingly.
8. Announced.