2018 PLP (Trib (PTD)

NAZIR AHMAD (CHAIRMAN).

Through the titled appeal the appellant/registered person has called in question the ex parte Blacklisting Order No. CIR/Zone-X/ST/ 4001 dated 12-05-2015, passed by the Learned CIR Zone-X RTO-II, Lahore.

2. The facts-in-brief-leading to the instant appeal are that pursuance of the letter dated 17.04.2015 issued by Chief Commissioner Inland Revenue, RTO-II, Lahore, it was reported that 1197 registered persons including the registered person of the case in hand are consecutively non-filers of sale tax returns, which were required to be filed on monthly basis under section 26(1) of the Sales Tax Act, 1990 (hereinafter called 'the Act'). Therefore, sales tax registration of all the registered persons was suspended vide suspension order dated 17.04.2015 under section 21(s) of the Act read with Rule 12 of the Sales Tax Rules, 2006, dated 12.06.2006, Clause 'N' of STGO (Stales Tax General Order) 03/2004 dated 12.06.2004 as amended in Para 34 of STGO 35/2012 dated 30.06.2012. Subsequently, blacklisted proceedings initiated by way of issuance of show-cause notice dated 21.04.2015 to all the 1197 registered persons but no compliance was made. Resultantly, the proceedings culminated in passing of combined blacklisting order dated 12.05.2015 in respect of all the 1197 registered person including the registered person of the case in hand falling at Sr. No.1193 bearing NTN No.0210937 in terms of section 21(2) of the Act, which has been impugned before this Tribunal.

3. The Learned AR has vehemently pleaded that blacklisting the appellant is illegal as it was not required to file the Monthly Sales Tax Returns after filing the application seeking de-registration as firstly for the reason that FBR has specifically allowed not filing of monthly sales tax returns vide Letter C. No.1/5-STB/2003 dated 7th June 2007, so after submission of application for de-registration non-filing of monthly return has been permitted, secondly when the business of supplies have been left and there is no question of making taxable supplies and further there is no loss of government revenue or no misstatement of facts. The Learned AR by pointing that the Sales Tax Rules Nos.11 and 12 are subservient to the main Section 21 in reference to which the rules are framed so argued that Rules 11 and 12 cannot go beyond the scope of section 21, and in the main section there is no provisions for suspension/ blacklisting due to non-filing of monthly sales tax returns as suspension/ blacklisting is permissible only when there are proofs of fake/flying invoices and tax fraud, whereas in the instant case there is neither matter of fake flying invoices nor tax fraud, so in the instant case suspension and blacklisting on account of non-filing of monthly sales tax returns being ultra vires of main Section 21, so suspension/blacklisting has become illegal. Thirdly it has been al clued that common order affecting 1195 registered person has been passed without taking into account distinct/duly supported facts of the case in hand and documents available in respect of it on record, which has made the order against the appellant, as non-existent. Fourthly it has averred again with quite force that the order passed is not in compliance with Section 2(9) read with Order XX, Rule 4 and Order XLI Rule 31 of Civil Procedure Code 1908 and Section 24A of the General Clauses Act, 1956, laying down the essential features and ingredients of Order or Judgment.

4. Fifthly it has been argued that inordinate delay has occurred, as after handing over the applicable record for audit, the Respondent did not intimate about the finalization of the proceedings despite repeated visits by the appellant thus the respondent has failed to proceed as per law laid-down within the stipulated limitation period of 90 days provided in both the Rules 11 and

12. It has been argued that failure to proceed within mandatory prescribed period has resulted in acceptance of deregistration request as on lapsing 90 days period that the respondent was informed by the appellant vide letter received on 19-09-2009 by the office of respondent, such negligence has created a vested right in favour of the appellant.

5. On the other Learned DR has supported the order but could not answer the arguments taken on behalf of the appellant. No answer was given for not taking into consideration the applications for de-registration and also ignoring the prescribed limitation period of 90 days for disposing the matter brought into the notice, and also delaying it extraordinary without recording any reason. There was no answer as to how not a single person out of 1195 has come forward to submit the reply to the notice.

6. The arguments heard and record perused.

7. As far as the facts of the case are concerned, there cannot be two opinions that the appellant has made much more than the due compliance to the law, and respondent has totally railed to do/perform the needful which was required to be done/performed, so the failure to take the requisite steps by the respondent has been established, further added to it is the inordinate delay in passing any order even by clearly leaving aside the limitation has made black listing as illegal.

8. It has not ended here, rather it is by ignoring the distinctive facts/circumstances of this case that a single/combined ex parte order has been passed in respect of 1195 registered persons, thereby not following at all the pre-requisites of the order/judgment as set out in Section 2(9) read with Order XX, Rule 4 and Order XLI, Rule 31 of Civil Procedure Code 1908 and Section 24A of the General Clauses Act, 1956, such a violative and sketchy order cannot become legally maintainable. It is patently correct that rules cannot extend the scope of the main section 21 and also cannot override the main Section, so non-filing of monthly sales tax returns cannot result into suspension and blacklisting, which is illegal being beyond the scope of main section 21 here in the instant case before us.

9. Keeping in view the findings supra we are left with no other alternative except to cancel the impugned order being illegal, not maintainable suffering from incurable defects, with the directions that the appellant be treated as de-registered after examining the available incontrovertible evidence in support of contentions, as not taking judicial notice of such evidence would be against the law, and judicial norms which is not permissible for the first and only appellate authority here in the instant case.

10. The respondent is directed to intimate de registration to agencies/wings responsible for computer updation within 30 days of receipt of the order and also it should be ensured by the respondent that the appellant is depicted on FBR System as de registered and active taxpayer. Further passing a joint order without bringing on record the facts/circumstances of each case is against the law and shall be avoided.

11. The appeal is disposed of in the manner as indicated above. HBT/119/Tax(Trib.) Order accordingly.