2013 PLP (Trib (PTD)

This appeal filed by registered person is against order bearing C.No. Collr (App)Ex/6/2009/1015 dated 13-7-2009 passed by Collector, Customs, Sales Tax and Federal Excise, (Appeals), Lahore.

2. Brief facts are that return for payment of Excise Duty, relating to tax period October, 2008 was filed on 15th November, 2008 along with necessary documents and tax due. Since the registered person had its account in National Bank of Pakistan (NBP), therefore, it had concession and privilege to make payment electronically by mode of direct debit. 15th November, 2008 was last working day of the week when the tax paid through direct debit could not be transferred by NBP in FBR's account, as it reflects from copies of payment receipts attached with file as Annex-D. However, the payment of tax was cleared by NBP on 17-11-2008. Department issued notice to taxpayer for delay in making payment of tax and imposed additional tax and penalty. On first appeal, the action of adjudicating officer was upheld by Collector (Appeals) in following words:

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06. I have examined the case record and considered the submissions of the appellants. Perusal of Sub-Rule (5) of Rule 45 of the Federal Excise Rules, 2005 issued by the Federal Government vide S.R.O. 534(I)/2005 dated 6-6-2005 and Sub-Rule (5) of Rule 15 of the Sales Tax Rules, 2006 issued vide S.R.O. 555(I)/2006 dated 5-6-2006 reveals that only in case of payment through pay order or Bank draft the date of payment is considered on which the pay order or Bank draft is tendered at the bank counter and in case of any other mode of payment the date of payment is considered on which payment is received by the bank. As the appellants had made payment through direct debit which is other than pay order or bank draft, therefore, the payment date shall be considered on which the payment is credited by the bank. In the instant case there is no doubt that the appellants had made payment on 15-11-2008 but the bank has not credited the said payment on 15-11-2008 and credited the same on 17-11-2008 i.e., after the due date which is a clear violation of the relevant provisions of law and the rules framed there under. (7) For what has been stated and discussed above, I do not find any merit in the appeal which is accordingly rejected and the impugned order is allowed to remain intact being quite legal, just and fair."

3. Learned counsel for the appellant submits that the taxpayer was vigilant in complying with the provisions of relevant laws and had acted within time and as per directions and procedure laid down by Federal Board of Revenue. He has referred to Sub-Rule (5) of Rule 45 of Federal Excise Rules, 2005. He argues that the appellant was penalized for default of bank in depositing the amount in the account of FBR with State Bank of Pakistan. DR has supported the order by Collector (Appeals).

4. Heard both the parties and record perused. Examination of Sub-Rule (5) of Rule 45 shows that it has dealt with two scenarios. First; where payment of tax is made through cash or cheque and Second; where payment is made through bank draft or pay order. Under first scenario the payment shall be treated as paid on the date when it is received, however, under second scenario the payment is deemed to have been received on the date when bank draft or pay order is submitted on the counter of bank. Yet, under second scenario, the payment through bank draft/pay order shall remain subject to clearance. Rule 45(5) of Federal Excise Rules 2005 is reproduced:-- "(5) The date of payment, in case of payment through cash or cheque, shall be treated as the date on which the payment is received by the bank and in case of payment through pay order or Bank draft, the date on which the pay order or Bank draft is tendered at the Bank counter shall be treated as the date of payment and where the pay order or Bank draft, so tendered at the Bank counter, is not cleared on its presentation for Bank clearing, the registered person shall, without prejudice to any other action, be liable to pay default surcharge and penalties prescribed under the Act or these rules." In the present case the payment was made through direct debit, which apparently is not covered under the reproduced Sub-Rule (5). Nevertheless, it is known phenomenon that electronic transfers from taxpayer's account to authorized bank account can be made for the purpose of payment of tax.

5. It is not department's case that appellant could not have availed the facility of payment of tax electronically. Department has also not denied that payment of tax was made through e-banking on 15th November, 2011 i.e., on due date. The allegation, confronted and adjudicated throughout, is that the payment was deposited in FBR's account on 17th November, 2011. In our opinion payment through direct debit is faster than any other mode, because the transfer of funds reflects immediately in the accounts of payer and recipient. We may also observe that National Bank was working as agent of FBR and any payment received by the National Bank under Sub-rule (5) of Rule 45 is deemed to have been received by FBR. If bank for any reason deposits the collected amount late in the account of FBR, this was a matter between the agent bank and principle FBR. The registered person could not be penalized under these facts. We hold, therefore, that the payment made through e-banking (direct debit) by registered person was within time. Though, apparently, direct debit was not expressly covered under the sub-rule (5), yet it sufficiently meets the intent and object of rule makers. Principle of 'ejusdem generis' can be employed here to construe that payment made through "direct debit" is covered under the sub-rule. Both the orders of authorities below are declared against the spirit of law, therefore, are annulled. Appeal allowed. CMA/161/Tax(Trib.) Appeal accepted.