P L D 1967 Karachi 341 (PLP)

ABDUL KADIR SHAIKH, J. ‑The income‑tax Appellate Tribunal has referred the following question of law for opinion of this Court under section 17 (1) of the Sales Tax Act, T951, at the instance of the Department: "Whether on the facts and in the circumstances of the case, a refund was at all allowable either under section 27 or 27‑A of the Sales Tax Act, 1951."

2. The facts of the case briefly sated are that the respondent company is carrying on hotel business at Karachi. For the assessment years 1952‑53, 1953‑54 and 1951‑55, the company under a bona fide mistake over‑charged sales tax from its custo mers and paid the excess payment of sales tax to the Govern ment in the sums of Rs. 4,120/11/6. Rs. 6,389 and Rs. 9.304, respectively for the three assessment years. In the revised returns for these years the assessee claimed the amounts as 'tax refundable' to him. For the year 1952‑53 the company also filed a separate application for the refund of the excess payment, and alternatively prayed that if the Department did not find it convenient to make the refund in cash, the amount in question together with other dues may be adjusted against the future taxes payable by the company. For assessment year 1953‑54. the company did not apply either for the refund or for set‑off, but for the third year 1954‑55, it filed an application on the prescribed form within the period of limitation. The Sales Tax Officer disallowed the claims on the ground that the company had over‑charged the sales tax from the customers and the excess‑tax having been deposited with the Government, the company was not entitled to these amounts.

3. Against this the company filed three appeals in respect of the three years to the Assistant Commissioner (Appellate). Two appeals concerning assessment years 1952‑53 and 1953‑54 came up before Mr. Eqbalur Rahman who dismissed them on the short ground that the company had not filed proper applications under section 27 (3) of the Sales Tax Act for the refund and therefore, the claims could not be recognized. The appeal for the third assessment year 1954‑55 was heard by another officer, Mr. D. Nabi, who agreed with the Sales Tax Officer that the assessee‑company not having paid the sales tax from its 'own pocket' and having illegally collected the amount from the customers, was not entitled to claim the refund.

4. The company then challenged these orders before the Income‑tax Appellate Tribunal separately in three appeals which were heard together and allowed by a consolidated order dated the 9th of August 1961. The findings of the Appellate Tribunal in effect were: "(1) That refund otherwise due could not be refused merely because the assessee had unauthorisedly collected the same from the customers. Reliance was placed on decision reported as Sugar Syndicate, Bahadargarh v. Punjab (1956) 7 S T C 536. (2) That under section 27‑A an assessee is entitled to adjustment of the refund irrespective whether he makes an application or not, in that the said section does not require filing of any application much less an application on a prescribed form. (3) That section 27‑A of the Sales Tax Act, 1951 being in conflict with section 27 must prevail as against the former section as it was later on inserted by Finance Act, 1957 while section 27 was a part of the Sales Tax Act, 1951."

5. The Department not being satisfied with the view taken by the Appellate Tribunal filed an application under section 17 (1) of the Sales Tax Act requesting that the question of law mentioned in the para. No. l above be referred for opinion of this Court. The Tribunal accepting this request forwarded the matter to this Court.

6. In order to resolve the respective contentions of the parties it is necessary to reproduce sections 27 and 27‑A of the Sales Tax Act which entitle an assessee to claim refund or adjustment of excess payment of tax. Section 27 is in these words "27 (1) Where partly manufactured goods are purchased by a licensed manufacturer and tax has been paid on those goods on importation or on any previous sale, a refund of the amount of the tax so paid shall be made to the licensed manufacturer. (2) If any person satisfies the Sales Tax Officer that the amount of tax paid by him exceeds the amount which he is properly chargeable under this Act, he shall be entitled to a refund of such excess; and the provisions of this Act in respect of appeal and revision shall apply to an order passed by the Sales Tax Officer under this subsection as they apply to an assessment. (3) An application pursuant to subsection (1) or subsection (2) may be made in the prescribed manner within four days of the end of the year in which the tax in respect of which the refund is claimed was paid." Section 27‑A reads as follows: "Where under the provisions of this Act, the Income‑tax Act, 1922 (XI of 1922), the Excess Profits Tax Act, 1940 (XV of 1940), the Finance Act, 1942 (XII of 1940, the Excess Profits Tax Ordinance, 1943 (XVI of 1943) and the Business Profits Tax Act, 1947, (XXI of 1947) a refund or re‑payment is found to be due to any person the Sales Tax Officer, the Appellate Assistant Commissioner, as the case may be, may, in lieu of the payment of the refund or the repayment, set‑off the amount to be refunded or repaid, or any part of that amount against the tax, if any, remaining payable by the person to whom the refund or repayment is due."

7. It is admitted that the assessee‑company made excess payments of tax in the sums of Rs. 4,120/11/6, Rs. 6,389 and Rs. 9,304 respectively for the assessment years 1952‑53, 1953‑54 and 1954‑

55. It is also a common ground that the company had realised these amounts inadvertently from its customers. The assessee then claimed adjustments of the excess payments in the revised returns filed for the three assessment years. The Company also filed separate applications within the period of Limitation in respect of two assessment years 1952‑53 and 1954‑. 5j, the application for the former year however, was not on a prescribed form. No separate application either for refund or for adjustment of the excess payment was made in respect of the year 1953‑54.

8. We have no difficulty in reaching the conclusion that the respondent‑company is entitled to the refund of Rs. 9,304 being the amount of excess payment of sales tax made for the assessment year 1954‑55 because an application for the refund was filed by the company on the prescribed form within the period of limitation as contemplated by section 27 (3) of the Sales Tax Act. The fact that the company had illegally collected this amount from its customers makes no difference to the right vested in an assessee under section 27 (2) of the Sales Tax Act to claim the refund. We have already taken this view in Civil Reference, Case No. 166 of 1962 disposed of on the 11th October 1966. For the same reasons we hold accordingly in this case.

9. The claim to the refund of excess payment of Rs. 4,120/11/6 for assessment year 1952‑53 also does not raise much difficulty. The assessee had filed an application within the prescribed period of limitation claiming the refund. The Assistant Commissioner (Appellate) did not consider this application as a valid and a proper application on the ground that it was not made on the prescribed form. He did not reject the claim of the assessee to the refund of the excess payment on the ground that the payment in question was illegally recovered from the customers. The Appellate Tribunal however, allowed .the refund as it was of the opinion that no application is required to be made by an assessee in respect of the request under section 27‑A for adjustment of the excess amount as paid by him. On the view taken by us that the excess payment' of sales tax made by an assessee cannot be refused on the ground that the amount in question was illegally recovered by an assessee from his customers, the only question that remains for consideration is whether this admitted claim can be refused to the assessee company on the ground that the application for the refund was not made on the form prescribed under subsection (3) of section 27 of the Sales Tax Act. A glance at the prescribed form would show that ail that an assessee is required to furnish in this form are the necessary details as to the payments made by him so as to enable the Sales Tax Officer to examine the total amount of tax actually paid as against the proper amount payable under the Act so as to verify the amount of the excess payment claimed. This position did not arise in this case because it is admitted that after ascertaining the necessary details, the Sales Tax Officer held that the assessee had made an excess payment in the sum of Rs. 4,120/11/6 for the assessment year in question. In these circumstances to refuse the refund of the excess amount to the assessee would be making `a fetish of technicality', to borrow the words of my Lord Mr. Justice S. A. Rahman in the case of Ch. Altaf Hussain and others v. The Chief Settlement Commissioner and others (P L D 1965 S C 69). In that case an application addressed to the Minister of Rehabilitation, Govern ment of Pakistan was treated by the Department as an appeal under the Displaced Persons (Compensation and Rehabilitation) Act, 1958 and this action was approved by the High Court and their Lordships of the Supreme Court of Pakistan. The applica tion of the assessee‑company in the present case before us was in substance and in effect an application for the refund of the excess amount which was actually determined and held as payable to him but was disallowed on the ground which we have already held to be outside the scope of the Act. It is not complained by the Department that any prejudice was caused to them in assessee's not making the application on the prescribed form. We are therefore, of the opinion that the respondent‑company is entitled to the refund of the excess payment in respect of assessment year 1952‑53.

10. Only question that remains now is in regard to the claim of excess payment of Rs. 6,389 for the assessment year 1953‑

54. Admittedly no application either under section 27 for the refund of the excess payment or under section 27‑A for adjustment thereof was made by the assessee for this year. The requirement of subsection (3) of section 27 is that an application on the prescribed form has to be made within four years of the end of the year in which the tax in respect of which the refund is claimed was paid. The learned counsel for the assessee urged that in the returns filed under the provisions of section 10 of the Act, the company had claimed adjustment of this amount. This read with the earlier application made for the refund in respect of the assessment year 1952‑53 in which the company had requested that the excess payment of that year with all other dues may be adjusted, can in law be treated as an application for adjustment as contemplated by section 27‑A of the Act, which provision in fact does not even require filing of an application on the prescribed form or otherwise.

11. We are of the opinion that the contention of the learned counsel for the assessee is without force in spite of the fact that it found favour with the Appellate Tribunal. With due respect, we do not agree with the view taken by the Appellate Tribunal that the provisions of section 27 or section 27‑A are in conflict with each other and/or are irreconcilable and the latter provisions having been inserted by Finance Act, 1957 must prevail as against the former which was a part of the original Act. In order to understand the point of view of the Appellate Tribunal, the relevant passage of its order dated the 9th of August 1961 may be reproduced hereunder: "(7) The reading of section 27‑A makes it abundantly clear that the assessee instead of claiming any refund or repayment is entitled to set‑off, the amount of the refund or the repayment or any part of that amount against the sales tax to be levied under the Sales Tax Act. In other words notwithstanding the provision of section 27 of the Sales Tax Act an assessee under the provision of section 27‑A is entitled to set‑off in respect of any refund which is found to be due or any repayment which is found to be due to him under the Sales Tax Act and can ask the Sales Tax Officer to set‑off that amount against any sales tax which remains payable by him. It is also important to note that under the provisions of section 27‑A no written application is required as contemplated by section 27 or rule 31 of the Sales Tax Act. The expression `found to be due' in our view not only covers the cases of a claim or set‑off the refund or repayment which have already been adjudicated upon (by various authorities as enumerated in‑ the beginning. of section 27‑A) but it also covers the case under the Sales Tax Act of the assessee claiming set‑‑off, of the refund or repayment of Sales Tax which is due to him. The word `due' means that the assessee claiming set‑off (in place of refund) should have a live claim at the time of claiming set‑off. In other words the claim for set‑off of refund should be within the period of limitation as contemplated by subsection (3) of section

27. Needless to add that in case of refund or repayment granted by competent authority no period of limitation is prescribed either for refund or for set‑off under the Sales Tax Act, the Income‑tax Act or the Excess Profit Tax Act. (8) It will be seen from the above discussion that the pro visions of section 27 and 27‑A are not only conflicting but they are also irreconcilable. This being so according to the well established principle of interpretation of statutes the last enacted provision will prevail by virtue of the assumption that it is the last expression of the legislative will or intent. We are fortified in this view by the book entitled `Statutory Construction, Interpretation of Law's by Earl T. Crawford, 1940 Edition'. Under section 325 at page 669 under the title construction as a whole conflicting provisions, the author states :‑ 'A code or revision should be construed as a whole. In other words, a code enacted as a single comprehensive statute, is to be considered as such, and not as a series of disconnected articles or statutes. Thus the sections of a code defining separate and community property must be construed together. The Court should consider every provision, and the various provisions should be construed together, irrespective of the time of the passage of the various sections. It should seek to harmonise the several provisions and to give' each full effect. In the event, however, that certain provisions are irrconcilable, the one last enacted or adopted well prevail by virtue of the assumption that it is the last expression of the legislative will or intent. Consequently, in instances of this character, the problem is presented to the Court to determine which of the inconsistent provisions is actually the later of the two. (9) Judged in the light of the above Principle Section 27‑A must prevail as against section 27 in that the former section as already indicated, was inserted by Finance Act, 1957 (I of 1957) section 15 (7) while section 27 formed part of the Sales Tax Act, 1951. (10) Judging instant case in the light of section 27‑A we have not the least doubt‑ that the claim of the assessee for set‑off of the tax paid on purchases for the period six months prior to October 1953, was made within three years and he would have been allowed the refund if he had moved the Sales Tax Officer in the manner prescribed by section 27 (3) and rules

31. It is not the Department's case that the claim of the assessee for the set‑off claimed by him in return of the sales tax was out of time but the only ground on which the order of the Appellate Assistant Commissioner was assailed was that the refund could not be allowed because there was no application in writing in the prescribed form. This objection is not available to the Department in that section 27‑A does not at all require any application in writing, much less in any prescribed form arid the assessee is entitled to the refund or the repayment against which the remaining tax is sought to be set off is found to‑ be due. Since the Department has not attacked the order of the Appellate Assistant Commissioner of Sales Tax on the ground that the sales tax sought to be set‑off was not due to the assessee the departmental appeal is rendered wholly infructuous."

11. An important and fundamental principle of interpreta tion of statute is that a statute is to be read as a whole and attempt is to be made to reconcile the various provisions contained in it although apparently they may seem to be in conflict with each other. It is to be assumed that the Legislature while adding to or amending the statute knew the earlier part of the statute, and it did not intend to create an in inter se conflict in its provisions. In this connection the Appellate Tribunal rightly quoted a passage from "Statutory Construction, Interpretation of Laws" by Earl T. Crawford to the effect that "a code or provision should be construed as a whole". In other words, a code enacted as a single comprehensive statute, is to be considered as such, and not as a series of disconnected articles or statutes. Thus the sections of a code defining separate and community property must be construed together. The Court should consider every provision, and the various "provisions should be construed together, irrespective of the time of the passage of the various sections. It should seek to harmonise the several provisions and to give each full effect." But, with due respect the Appellate Tribunal did not examine provisions of section 27 or 27‑A of the Sales Tax Act in the light of these considerations. Reading these two sections together, we find that there is no inter se conflict in the provisions and, on the contrary, the provisions can easily be reconciled with each other. Section 27 enables‑an assessee to claim the amount of tax paid by him in excess of the amount with which he is properly chargeable under the Act, provided he applies on a prescribed form within the period of limitation. On the other hand section 27‑A enables the Department to make an adjustment of the amount so found due and refundable to the assessee under section 27 of the Sales Tax Act, or under any other provision in the other Acts mentioned in that section. So instead of making the refund in cash which the Sales Tax Officer is bound to do under the provision of section 27 of the Sales Tax Act or which if payable to the assessee under the provisions of the Income‑tax Act, 1922, Excess Profits Tax Act, 1940. Finance‑Act, 1942, Excess Profits Tax Ordinance 1943 and the Business Profits Tax Act, 1947, the Sales Tax F Officer was empowered by the addition of section 27‑A inserted by Finance Act, 1942, to set off these amounts as against the taxes if any remaining payable by the assessee. By the insertion of section 27‑A it was possible for the Sales Tax Officer that in lieu of making such refund due to the assessee and payable to him in cash, the amount could be withheld by him to be set off against the taxes remaining payable by the assessee. This power can be exercised by him not only in respect of the refund due to the assessee under the Sales Tax Act. but also in respect of the other Acts mentioned in section 27‑A. Thus even the assessee who is entitled to the refund of the excess taxes due to him under the Income‑tax Act, 1922, the Excess Profits Tax Act, 1920. The Finance Act, 1942, the Excess Profits Tax Ordinance, 1943 and the Business Profits Tax Act, 1947, can ask the Sales Tax Officer to adjust the amount so payable to him against the sales tax remaining due and payable by him. The Appellate Tribunal also noticed the provisions of section 27‑A in this light and observed "the reading of section 27‑A makes it abundantly clear that the assessee instead of claiming any refund or repayment is entitled to set‑off, the amount of the refund or the repayment or any part of that amount against the sales tax to be levied under the Sales Tax Act." But the Tribunal went on further to say "in other words notwithstanding the provision of section 27 of the Sales Tax Act an assessee under the provision of section 27‑A is entitled to set‑off in respect of any refund which is found to be due or any payment. which is found to be due to him under the Sales Tax Act and can ask the Sales Tax Officer to set‑off that amount against any sales tax which remains payable by him. It is also important to note that under the provisions of section 27‑A no written application is required as contemplated by section 27 or rule 31 of the Sales Tax Act. In taking this view the Tribunal clearly misunderstood the real intention and the import of section 27‑A and did not really attempt to reconcile the two provisions and see if they could stand together. Section 27‑A does not prescribe the method under which "a refund or payment is found due to any person." In the opinion of the Tribunal an assessee is, therefore, entitled to set‑off in respect of any refund which is found due to him under the Sales Tax Act without making any application for this purpose. But this section not only mentions the refund or repayment found due to the assessee under the Sales Tax Act but also under the other Acts mentioned in that section. Section 27‑A does not also prescribe the method by which the excess payments under those Acts are to be determined. The reason is obvious. Under the Income‑tax Act, 1922, or the Excess Profits Act, 1940, etc. the refund or repayment claimed by an assessee have necessarily to determine under the provisions contained in those respective Acts and not under section 27‑A of the Sales Tax Act. This provision only empowers the Sales Tax Officer to adjust these payments in lieu of payments of the refunds, in cash due to the assessee. The procedure for determin ing an excess amount paid as sales tax and claimed by an assessee has necessarily to be followed according to the provisions of section 27 of the Act and once that procedure has been gone through and the amount payable to an assessee is determined, then and then alone, is the Sales Tax Officer competent to set off that amount against the taxes remaining payable by the assessee, instead of the payment of the refund in cash to him. As mentioned above, in the absence of section 27‑A the Sales Tax Officer was not competent to refuse to pay in cash the amount of the refund found due to the assessee under section 27 of the Sales Tax Act. The excess amount of the tax due to an assessee has therefore necessarily to be determined under the provisions section 27 of the Sales Tax Act. Similarly in respect of the refunds of the excess taxes claimed by an assessee under the other Acts mentioned in section 27‑A of the Sales Tax Act, have to be determined in accordance with the provisions contained in those respective Acts. For example, the claim of an assessee to an amount paid in excess as Income‑tax has necessarily to be determined in accordance with the provisions of the Income‑tax Act and after there the process prescribed under that Act is gone through and the amount so payable to him determined, that amount could then be adjusted and set‑off against the sales tax payable by the assessee under the Sales Tax Act.

12. We have therefore, no hesitation in reaching the conclusion that the provisions of section 27‑A are, in no way, in conflict with those of section 27 of the Sales Tax Act and in fact they are supplementary to the latter. An assessee cannot claim. adjustment of an excess amount paid by him as sales tax under section 27‑A, independently of section 27 of the Act. In this behalf he must make an application within the period of limitation as provided by section 27 (3) of the Act.

13. The assessee‑respondent admittedly did not make such an application for the refund in respect of the year 1953‑

54. The fact that he had claimed the adjustment of the excess amount in the return filed under section 10 of the Act for the same assessment year cannot be said to be the compliance of the provisions of subsection (3) of section

27. Nor is it possible in law to treat his omnibus application filed in respect of claim of the excess amount for the assessment year 1952‑53; by which he had said that `the excess for that year alongwith other dues may be adjusted against the future taxes', as an application under section 27 for the refund of Rs. 6,389 for the year 1953‑

54. We are therefore, clearly of the opinion that the claim of the assessee to this amount must fail.

14. For these reasons, the answer to the question referred to this Court is that the refund of Rs. 4,120/11/6 and Rs. 9,304 as excess amount of tax paid by the company in respect of assess ment years 1952‑53 and 1954‑55 are allowable under section 27 or adjustable under section 27‑A of the Sales Tax Act, but the amount of Rs. 6,389 paid by the assessee could not be refunded to him. In the circumstances of the case we would order the parties to bear their own costs. S. Q. Reference answered accordingly.