2010 PLP (Trib (PTD)

SHAHID JAMIL KHAN (JUDICIAL MEMBER).

Registered Person through this appeal has challenged order-in-appeal dated 26-2-2008 passed by Collector (Appeals), Faisalabad.

2. Learned counsel for the appellant contends that the issue involved in this appeal stands settled upto the level of Supreme Court where departmental leave to appeal was refused vide order C.P. No. 402-K of 2008 dated 20-5-2009, against Sindh High Court's judgment in C.P. No. D-1684 of 2007 dated 18-3-2009. Relevant part of the judgment by Sindh High Court is reproduced hereunder: "We are of the opinion that in respect of any raw material which had been purchased by the petitioner before promulgation of the impugned S.R.Os. for manufacture of textile goods for export or local supply on which he had paid Sales Tax and on which he was entitled to input tax or for refund without there being any time limit, he cannot be subjected to disallowance of adjustment of input tax or claim of refund if the raw materials have not been consumed for manufacture of goods which have not been exported upto 31st December, 2005 as the petitioners had acquired a vested right in respect of this material for which adjustment of input tax paid on purchase of this material and for the claim of refund and the case of the petitioners is completely covered by our judgment in the case of Agar International (Pvt.) Limited quoted supra. We, therefore, allow this petition and direct the respondents to scrutinize the claim of the refund filed by the petitioner and if they are satisfied that the raw material used in the manufacture of the textile goods which were exported or sold in local market after 31st December, 2005 was purchased before the date of promulgation of the first S.R.O. i.e. 6-6-2005 and that they have fulfilled the other mandatory conditions required to be fulfilled for grant of such refund then they should release these refunds without being influenced by the impugned S. R.Os., which in our opinion cannot operate retrospectively. This petition is, therefore, disposed of in the above manner". Learned counsel also produced a letter C.No.3(10)STM/2007 dated 13-1-2010 issued by Federal Board of Revenue directing all the concerned officers to process the refund applications where exports took place after 31-12-2005 and raw materials were purchased upto 5-6-2005. Learned counsel adds, since cut off date of 30th September, 2005, later extended to 31st December, 2005; was held illegal by the honourable Sindh High Court, therefore, the tax paid on the stocks available with the applicants, consumed either for exports or zero-rated local sales were entitled to claim refund. He concludes that issue in appeal is squarely covered by the Federal Board of Revenue's letter dated 13-1-2010 which was issued in consequence of the judgments referred above. DR who is assisted by Auditor Mr. Muhammad Afzal could not dispute the legal position, however, has shown concerns on facts, which in his opinion require examination of supporting documents to ascertain as to whether the stocks were genuinely acquired upto 5th June, 2005 or not.

3. Heard learned representatives of the parties and record perused.

4. In view of the admitted legal position and the directions of Federal Board of Revenue contained in letter dated 13-1-2010, appeal is accepted. However, the concern shown by learned DR and Auditor is found justified. In my opinion right of scrutiny cannot be snatched from department and the Registered Person is under obligation to prove its assertions on facts before the concerned officer. The officer having jurisdiction of the matter is directed to process the claimed refund within 60 days from the receipt of this order and appellant is directed to appear before the concerned officer within 15 days from receipt of this order with all necessary and supporting documents.

5. Learned counsel for the appellant has pointed that this appeal is only to the extent of his refund claim amounting to Rs.682,

899. Disposed of accordingly. H.B.T./139/Tax(Trib.) Appeal accepted.