CONSOLIDATED ORDER-IN-ORIGINAL PASSED BY DEPUTY COLLECTOR OF SALES TAX ADJUDICATION WITHOUT DISCUSSING MERITS OF EACH CASE QUASHED BY LAHORE HIGH COURT

CONSOLIDATED ORDER-IN-ORIGINAL PASSED BY DEPUTY COLLECTOR OF SALES TAX ADJUDICATION WITHOUT DISCUSSING MERITS <!--[if gte mso 10]> CONSOLIDATED ORDER-IN-ORIGINAL PASSED BY DEPUTY COLLECTOR OF SALES TAX ADJUDICATION WITHOUT DISCUSSING MERITS OF EACH CASE QUASHED BY LAHORE HIGH COURT By Mr. Akhtar Javed, Advocate, Lahore Based on an audit observation, Mr. Zulfiqar Younas, the then Deputy Collector of Sales Tax (Adjudication) Lahore issued a show-cause notice to Messrs Ramzan Bukhsh Textile Mills 48-Km Multan Road, Phool Nagar, Lahore wherein it was alleged that the unit had claimed out of tax period adjustment of input tax credit of Rs. 338,161 in September, 1999 on electricity in the tax period of August 1999. Since the unit had claimed adjustment of input tax paid on electricity on the strength of Electricity Bill/ Sales Tax Invoice which was not relevant to the tax period in which the adjustment was claimed. The charges were upheld in the Order-in-Original No. 10 of 2003 dated 5-5-2003 and the Deputy Collector directed the company to pay the amount which had been adjusted in the tax returns for the tax period other than that during which invoice was issued. It was recorded in paragraph 22 of the order that the said order also applied to the following three registered persons: (i) Messrs Rai Textile Mills Ltd. (ii) Messrs Premier Leather Pakistan Ltd. (iii) Messrs Prime Chemicals 2. Being aggrieved of the aforesaid order, Messrs Prime Chemicals filed Writ Petition No. 7967 of 2003 in Lahore High Court Lahore on the grounds that all the facts discussed in the order-in-original pertained to Messrs Ramzan Textile Mills Limited and had nothing to do in the matter of the petitioner, Prime Chemicals. It was inter alia contended that the said order could not by reference be applied to the case of the petitioner whose facts were distinct and separate and those had to be separately met and argued with reference to the relevant record, otherwise it is no adjudication in law. 3. The High Court observed that: 6. To adjudicate, necessarily implies settling a matter. This is synonymous with the word `adjudge'. The adjudicatory process may be before an administrative authority or before a Court of law. Even it is before an administrative agency, the rights are to be adjudged after notice to parties affording opportunity of hearing and appraisal of record. The factual position and the findings are to be recorded specific--------- 9. Obviously, a factual inquiry based on record for purposes of adjudication had to be conducted. A bare and bald statement that the case of the petitioner and one other as referred to in paragraph 22 of the order being identical, the order was extendable even to them, made this no order in the eye of law as it violated the very purpose of adjudication as well as the principle of natural justice, which requires formulation of a speaking order disposing of a case reflecting a discussion of a factual position and handling down a judgment or a finding .on such basis. 10. On the touchstone of the standards laid for purposes of adjudication since more antiquity, we find that one order under reference and as reflected in paragraph 22 is hardly an order. It is destitute of any discussion relevant to the record of this case. It is perverse and consequently a nullity in the eye of law. It deserved to be quashed and a direction is, therefore, issued to the Deputy Collector Customs, Sales Tax & C.E. (Adjudication) Lahore to re-write the order afresh after hearing the petitioner and to dispose of the matter in accordance with the observation made herein and to refrain from such orders in serious matters in such a slip-shod manner. 4. Through the aforesaid judgment, the Lahore High Court has laid down a ratio that the adjudicating officers should take into account all the facts of an individual case separately and give his specific findings on the factual position of every case. Even if the merits of some cases are identical, a bare and bald statement that the particular case was identical to some other cases does not meet the principles of natural justice. The Court has advised the adjudicating officers to refrain from passing such orders in such serious financial matters.