RESTORATION OF APPELLATE PROCEDURE

RESTORATION OF APPELLATE PROCEDURE <!--[if gte mso 9]> RESTORATION OF APPELLATE PROCEDURE By Mir Ahmed Ali, Advocate, Rawalpindi It is said that Law is Blind but none knows about law makers or givers. Before valued readers comprehend title, I would like to jot down a few lines before reaching main object. The terms "Statute" has no precise meaning in English Law but current practice is used interchangeably with Public General Act. Although word "Statute" has been defined a lot many times in numerous books and articles but it did not come into common use by the end of thirteenth century. In early times, before rise of regular Parliamentary system, term "Statutes" was applied through formal pronouncement of legislative character of Ruler occasionally in consultation with his well wishers. With certain changes here are Sir Carleton Allen's views, which he describes for early statute. In his words it, "Sometimes seems it' to have proceeded from Monarch himself and sometime it was act of King on advice of his council; it might be imperative or declaratory, general or local or even in the form of grant, conformation or resolution rather than a sovereign command. They were in short simply decrees of Government, undoubtedly of great force and authority. There was no uniform pattern, defined scope; nor could it be otherwise as we have seen. At that period no mature conception of a distribution of powers and a monarch had to keep his order in the realm as best he deem fit." These factors have not yet been changed, though under Constitution of 1973, which is said to be unanimous one, even its consideration is far away, none even bother to uncover it to look at its face, like bridegroom at first instance look at the face of his bride. Similar position arises in our country. I am not fully aware of other statutory provisions since my basic field is Fiscal Laws and to assist judicial or quasi-judicial authorities to implement it in true letter and spirit. None can deny that these laws are backbone of present world. Thus, bigger fishes searching smaller one for own benefits under present economic tug of war. If we want to enact and amend law according to our requirements and treat it like a firm wall, connecting each other by block to block, we may have a better foundation to face awful and windy storm. The same position appears especially in Fiscal Statutes because the golden principle of interpretation is "Court must look to the words of statute and interpret them in the light of what is clearly expressed and cannot imply and thing which is not expressed and there is no provision in the statute so as to support assumed deficiency". Coming to the real object of my submissions, presently it becomes general tendency that each and every Government whether elected or selected or inducted, makes frequent amendments in Fiscal Statutes without considering its consequential affects. The most clown period for these amendments is 1996 to 2002. In my Article "Mystery of Adjudication" published in various taxing law journals & books, wherein I mentioned that only under Sales Tax Act, 1990, amendments were made thirteen (13) times from March, 1996 to February, 2001. In addition why to far away; 322 amendments were inserted in 240 sections of Income Tax Ordinance 2001, promulgated by Notification No. F. No.2(1) of 2001-Pub, dated 13-9-2001, by Finance Ordinance 2002 and prior to its implementation as provided under subsection (3) of section 1 of said Ordinance. I do not want to pour my hands in hornet's nest of Income Tax Ordinance 2001. The topic concerns, presently, is about amendments be made by Finance Ordinance 2002 in Central Excise, Customs & Sales Tax Acts. You all are aware of the fact that by Finance Act, 2000. Option to file Appeals were replaced by Power of Adjudication and necessary notifications were issued in this regard. Before coming to main subject, it is necessary to pin-point that word "adjudication" is not defined in any of the Acts, since it is used in legal framework, therefore, its meaning is to be gathered from Black's Law Dictionary according to it "Adjudication": (i) Means legal process of resolving dispute. (ii) The formal giving or pronouncing a judgment in a Court proceeding. (iii) The judgment or decision given. (iv) The entry of a decree by a Court in respect of the parties in a case. (v) It implies a hearing by a Court after notice of legal evidence on the factual issues involved. (vi) Adjudicate means to hear or try and decide judicially. The word "Adjudication" means giving or pronouncing a judgment or decree (1990 (45) EL. T 447). It crystallized that words "Adjudication" and "Appeals" are common in its working relation except spelling and pronunciation variation. It is needless to reproduce amendments made by Finance Ordinance, 2000 in such statutes. However, excerpts from said amendments are as under to reconcile same with present one at a glance: 1. Amendments Made By Finance Ordinance 2000 A. Central Excise Act 1944 Section 2: Definitions (a) "Adjudication authority' means any authority competent to pass any order or decision under this Act or the rules made thereunder, but does not include the Central Board of Revenue (Collector of Central Excise Appeals) (omitted by Finance Ordinance, 2000) or Appellate Tribunal. (b) "Central Excise Officer" means any officer of the Central Excise Department, or any person (including an officer of the Provincial Government) invested by the Central Board of Revenue with any of the powers of a Central Excise Officer under this Act. It is to essential to mention here that "Collector" is not defined under section 2 of Central Excise Act, 1944 but it is defined under Rule (2)(c) made in exercise of powers conferred under section 37 as under:--‑ Rule (2)(c) "Collector" means a Central Excise Officer appointed to exercise powers and discharge duties conferred or imposed on Collector under the Act or the Rules in relation to the Collectorate below. Rule (4) Authorization of Officer The Central Board of Revenue may authorize any Central Excise Officer to exercise all or any of the powers conferred by the Act or these Rules. It to be noted territorial jurisdiction is not provided to said authority under any notification, however under S.R.O. 957(K)/60, dated 26-7-1960 jurisdictions assigned to some of Central Excise Staff and Chief Customs Officer under specified provisions only. B. Customs Act. 1969 Section 2 Definitions. (a) "Adjudication Authority" means any authority competent to pass any order or decision under this Act or the rules made there-under, but does not include the Central Board of Revenue (Collector of Central Excise Appeals) (omitted by Finance Ordinance, 2000) or Appellate Tribunal. (o) "Officers of Customs' means an officer appointed under section 3 Section 3 Appointment of Officers of Customs For the purposes of this Act, the Board by notification in the official Gazette, appoint, in relation to any area specified in the notification, any person to be--‑ (a) a Chief Collector of Customs; (b) a Collector of Customs; (c) a Collector of Customs (Appeals); (d) an Additional Collector of Customs; (e) a Deputy Collector of Customs; (f) an Assistant Collector of Customs; (g) an officer of Customs with any designation; C. Sales Tax Act, 1990 Section 2 Definition (5) "Collector" means the Collector of Sales Tax appointed under section 30. (18) "Officer of Sales Tax" means an officer appointed under section 30. Section 30 Appointment of Officer For the purposes of this Act, the Board may, by notification in the official Gazette, appoint in relation to any, area, any case or class of cases specified in the notification, any person to be--‑ (a) a Collector of Sales Tax; (b) a Collector of Sales Tax (Adjudication) [Word -Appeals" substituted by Sales Tax (Amendment Ordinance, 2001, dated 7-2-2001] (c) an Additional Collector of Sales Tax; (d) a Deputy Collector of Sales Tax; (e) an Assistant Collector of Sales Tax; (f) a Superintendent of Sales Tax; (g) an officer of sales tax with any other designation. Now within a span of two years, for the reasons best known to law and Policy makers, they again made amendments by Finance Ordinance, 2002, as under:--‑ 2. AMENDMENTS MADE BY FINANCE ORDINANCE 2002 A. Central Excise Act 1944 A new section 34B is inserted to empower any person or Central Excise Officer to file appeal against any decision or order, other than decision or order or notice given or action taken under section 11 of the Central Excise Act 1944, passed by any Central Excise Officer up to the rank of Deputy Collector of Central Excise. In consequence of insertion of section 34B, section 34C is required to be inducted and Clause (b) of section 35B, omitted by Finance Ordinance 2000, is reinstated with numerical change of section. It is more important to note that under definition clause (2) of section 21 of Act, phrase omitted by Finance Ordinance 2000 is not revived or re-inducted under recent amendment. It to be noted that territorial jurisdiction is not provided to said authority under any notification, however under S.R.O. 957(K)/60, dated 26-7-1960 jurisdictions assigned to some of the Central Excise staff and Chief Customs Officer are provided under specified provisions only. It is astonishing part of hierarchy of Central_ Board of Revenue. The chart below will clear picture before and after amendments made by Finance Ordinance, 2002 for adjudication under section 33 of Central Excise Act 1944. Before 2000 Between 2000 to 2002 After 2002 Adjudication Authorities Adjudication Authorities Adjudication Authorities 1 Collector 1 Collector 1 Collector 2 Additional Collector 2 Additional Collector 2 Additional Collector 3 Deputy Collector 3 Deputy Collector 3 Deputy Collector 4 Assistant Collector 4 Not Provided 4 Not Provided 5 Superintendent 5 Not Provided 5 Not Provided After insertion section 34B adjudicating authorities, other than Collector and Additional Collector, as provided under section 33, will be of no use and may be burden on exchequer. B. Customs Act, 1969 Section 179 was available under Customs Act for adjudication purpose but substituted with certain changes. In consequence thereof section 193 and its related provisions, deals with Appeals were omitted by Finance Ordinance, 2000. Section 179 is substituted by Finance Ordinance 2002 and accordingly section 193 and its related provisions are restored, enabling person and department as well to file appeals before Collector Appeals against any decision or order passed by an officer of Customs below Additional Collector under section 179. Likewise section 194A is amended accordingly. The Chart below will clear picture before and after amendment made by Finance Ordinance, 2002 for adjudication under section 179. Before 2000 Between 2000 to 2002 After 2002 Adjudication Authorities Adjudication Authorities Adjudication Authorities 1 Collector 1 Collector 1 Collector 2 Additional Collector 2 Additional Collector 2 Additional Collector 3 Deputy Collector 3 Deputy Collector 3 Deputy Collector 4 Assistant Collector 4 Not Provided 4 Assistant Collector 5 Any Officer 5 Not Provided 5 Superintendent 6 Not Provided 6 Not Provided 6 Principal Appiaiser Similarly after insertion section 193; adjudicating authorities, other than Collector and Additional Collector as provided under section 179, will be of no use and burden on exchequer as well. C. Sales Tax Act, 1990 Section 45B, in addition to section 45 deals with adjudication, is inserted with slight modification. Whereunder option to file appeal is provided where decision or order is passed under certain sections by officer below Additional Collector. Amendment is made under subsection (1) of section 46 accordingly. It is to be cleared here that Chapter VIII was originally named as "Adjudication of case", this heading was substituted with "Appeals" and sections 43 and 44 deals with "Adjudication" and "Issuance of show-cause notice before confiscation of goods or imposition of penalty" were omitted by Finance Act, 1996. For the purposes adjudication under section 43, powers were conferred under Notification S.R.O. 520(I)/95, dated 14-6-1995. The following Chart will clear picture before and after Finance Ordinance, 2002 for adjudication under sections 43 and 45 of Sales Tax Act, 1990. Before 2000 Between 2000 to 2002 After 2002 Adjudication Authorities Adjudication Authorities Adjudication Authorities 1 Not provided 1 Collector 1 Collector 2 Deputy Collector G-19 2 Additional Collector 2 Additional Collector, 3 Assistant Collector 3 Deputy Collector 3 Deputy Collector G-18 4 Assistant Collector 4 Not Provided 4 Any Sales Tax Officer G-17 5 Any Officer 5 Not Provided 5 Not Provided 6 Not Provided 6 Not Provided 6 Not Provided As aforesaid after insertion section 45B adjudicating authorities as provided under section 45, other than Collector and Additional Collector, will be of no use and may be burden on exchequer also. 3. Summary A. Central Excise Act, 1944 (i) Under Clause (2) of section 2 the phrase "Collector of Central Excise (Appeals)", omitted by Finance Ordinance, 2000 is not restored. (ii) In addition said authority is not appointed as provided under other fiscal statutes provided under this Act except Clause (8), wherein Central Excise Officer is defined, which includes an officer of the Provincial Government invested by the Central Board of Revenue and under Clause (28) of section 2 "Officer" is defined to mean Central Excise Officer. (iii) As aforesaid, such authority is not defined under Act but only authority under designation "Collector" is defined in rules. (iv) Prior to amendment made by Finance Ordinance, 2000 under section 35, appeal against any decision or order passed by any authority below Collector lies with "Collector (Appeals)". The newly inserted section 34B also provided that appeal against any decision or order under the Act or Rule other than decision, order or notice given or action taken under section 11 by any Central Excise Officer up to Deputy Collector Central Excise lies with Collector (Appeal) B. Customs Act, 1969. (i) Under Clause (a) of section 2 words "Collector of Appeal" were omitted by Finance Ordinance, 2000 because provisions dealing with appeal were omitted. (ii) Since provisions of Appellate Procedure are restored by Finance Ordinance, 2002 therefore, Collector (Appeals) is defined under clause (ff) of section 2. But this authority inserted by Finance Act, 1989 and listed at Clause (b) of section 3, though substituted by Finance, 1996, remained unchanged. (iii) Before amendment made by Finance Ordinance 2000 under section 193, appeal against any decision or order, other than notice of demand served under section 202 by any officer of customs lower than Collector lies with "Collector (Appeals)". The newly inserted section 193 provides that appeal against any decision or order passed under section 179, by an officer of customs lower than Additional Collector lie with Collector (Appeal). But the authority provided under section 3 does not conform to definition of authority provided under clause (ff) of section 2. C. Sales Tax Act, 1990 (i) "Collector" is defined under clause (5) of section 2 of Sales Tax Act, 1990 as appointed under section 30. (ii) "Officer of Sales Tax" is also defined under Clause (18) of section 2 to mean a person appointed under section 30. (iii) Under section 30, authority list at S. No.(b) is converted into Collector of Sales Tax (Adjudication) from Collector of Sales Tax (Appeal) by Sales Tax (Amendment) Ordinance, 2001, dated 7-2-2001 and said authority is neither revived nor restored. (iv) Before amendment made by Finance Ordinance, 2000 section 45 provides that any person as well as department against any decision or order made by any Sales Tax Officer below rank of Collector may file appeal before Collector of Sales Tax (Appeals), listed at S. No.(b) under section 30. Re-introduction of appellate proceedings under section 45B provides that any person as well as department may file appeal before Collector of Sales Tax (Appeals) against any decision or order passed under sections 11, 36 & 45 by an Officer of Sales Tax below Additional Collector. 4. Statute-Wise Analysis A. Central Excise Act, 1944 (1) Central Board of Revenue superseding S.R.O. 448(I)/2000, dated 1-7-2000, issued S.R.O. 377(I)/2002, dated 15-6-2002 by omitting, adding original Notification vide S.R.O. 394(I)/2002, dated 19-6-2002, to enlarge territorial jurisdiction and to empower other authorities for adjudication purposes. (2) It: is not ended here, Board under Notification S.R.O. 380(I)/2002, dated 15-6-2002 also conferred Collectors (Adjudication) the powers provided under sections 34B, 193 and 45B of Central Excise Act, Customs Act and Sales Tax, respectively, against order passed by an officer below Additional Collector. It can safely be construed that one makes thief a watchman. (3) If philosophy of Board is admitted to be judicial that "Any Person or Departmental Officer aggrieved by any of the order of decision of officer below the rank of Additional Collector may appeal to Collector (Appeals)." Then it is just knavery of Board because it is established principle that there is no equity under Fiscal Statutes. (4) Contrary to Customs & Sales Tax Acts, highest authorities, for territorial jurisdiction under Central Excise Act, Collector, as defined under Rule 2 under S.R.O. 481(I)/95, dated 14-6-1995. It is to be kept in mind that none of the Clauses under section 37(2) empowers Board to define of said authority under Rules. It is cardinal principle that authorities, under any Act, are required to be defined under Act itself and not under rules because authoritative jurisdiction cannot be assumed. 5. Basic elementary provisions, exit in every statute are regarded as Declaratory, Mandatory and Procedural in nature. To define and appoint ab authority or purpose of Act is declaratory in nature and condition precedent as well. But under Central Excise Act, highest authority, which conferred with territorial jurisdiction, is defined under Rule 2(c) and authorization of such authority is provided under Rule 4 of Central Excise Rules, 1944 to be notified by Board and remained unchanged, since substituted by S.R.O. 1205(K)/69, dated 11-4-1969. It is curious that rules are made under delegated powers and said delegatee empowers delegator to notify jurisdiction of authority. It is nothing but doing contrary to accepted canons. In addition it is held in a decision reported as 1988 CLC 123 that:--‑ Term---"Jurisdiction" connotation of---Terms "Jurisdiction" which refers to legal authority and competence of Court to administer justice is conferred by law only. Jurisdiction can neither be conferred nor ousted by consent.---Submissions to jurisdiction will not confer the Court with jurisdiction where same did not exist." B. Customs Act 1969 1. Details submitted in sub-Paras. 1 and 2 of Para A under Serial No.4 are equally applicable under Customs Act as well. 2. Under Customs Act, power of Adjudication already existed and provision of appeal was also available prior to amendments made by Finance Ordinance, 2000. Since section 193 omitted therefore, words "Collector of Appeals" was also omitted from Clause (a) of section 2 accordingly. With restoration of first appellate procedure definition of "Collector of Appeals" is inserted under clause (ff) of section 2 but under section 3 it remained intact as inserted by Finance Act, 1989. The authority listed at Clause (c) of section 3 does neither conform to authority defined under new Clause (ff) of section 2 nor the authority provided under restored section 193. In this regard the principle enunciated by Honourable High Court Lahore in a decision reported as PLD 1970 Lah. 6 that:--"It is not for the Court to fill in the lacuna or remove the defects in an enactment." C. Sales Tax Act, 1990 1. Details submitted in sub-Paras. 1 and 2 of Para A under Serial No.4 are equally applicable under Sales Tax Act. 2. Unlike aforesaid statutes, sections 43 and 44 was omitted and section 45 was substituted by Finance Act, 1996 Ordinance 46(1) was also amended accordingly. By Finance Ordinance, 2000 section 45 was substituted, which also required to amend section 46(1) to coincide with such amendment. 3. But restoration of first appellate procedure through insertion of section 45B, providing any person or department to file appeal before Collector of Sales Tax (Appeals) against any decision or order passed under sections 11, 36 or 45 passed by an officer of Sales Tax below Additional Collector. Accordingly sub-section (1) of section 46 is divided into three parts so that it may not be antonym to such amendment. 4. Due to amendment under section 45 by Finance Ordinance, 2000, Collector of Sales Tax (Appeals) listed at clause (b) of section 30 was converted as Collector of Sales Tax (Adjudication). But induction of section 45B, neither it is restored nor provided under section 30 to cope with Clause (18) of section 2 of Sales Tax Act. It for further information that clause (5) section 2 defines "Collector" to mean as Collector of Sales Tax appointed under section 30. This does not fill in the blank as for as statutory requirements are concern. 6. Conclusion 1. Authorities are creature of statutes and it should be defined under the Act. However jurisdiction, whether territorial or specified, should be conferred upon under unless it is delegated under statute only. 2. The authorities appointed or deputed for adjudication process are quasi-judicial, assessment and implementation of specified statutes under special circumstances. Thus, conferring judicial powers, without any statutory intent in any of three statutes, makes it emitting saliva. 3. It is to be cleared here that adjudication authorities always remained revenue oriented. As such, conferring them judicial powers is depriving litigant from their inherent substantive rights. 4. I must add here that even with three decades we have not yet separated judiciary from executive as promised under preamble of our Constitution, than what we can expect from our law-makers. It is a futile exercise of amending laws for the benefit of bureaucracy and against the masses. I may remind here Sir Winston Churchill's words, addressing angry people of Britain against imposition of huge taxes; after Second World War; he said "Where Courts are alive none can harm you". But why should we see to it because we have best example in the Universe and is well-known to all of us of our Second Caliph (God blessed him), which needs not to be reproduced. 5. From all what is expressed above, reveals that executive is resolved to fail our socio-economic system so that we should not even try to take of. It is necessary to bring on record that all these Statutes deal with indirect taxes and applicable to industries. It is our misfortune that we are marching towards Commerce rather Industrial based economy. If we want to survive, we must sit and think over it otherwise there will be no path for return.