P L D 2002 Quetta 84 (PLP)

AMAN‑UL‑ALLAH KHAN. J ‑This appeal is directed against the Judgment dated 2‑3‑2000 passed by Customs, Excise and Sales Tax Appellate 'Tribunal, Karachi Bench whereby fine imposed under section 36‑B of the Central Excises Tax Act, 1944 (hereinafter referred to as the Act) by the Adjudicating Authority has been remitted and appeal filed by the respondent has been allowed.

2. Briefly stated the facts of the case are that respondent Pakistan Petroleum Ltd. is engaged in the production of gas from its Wells at Sui and Kandkot Gas fields. The gas produced is entirely purchased by Water and Power Development Authority (WAPDA), and Sui Northern Gas Pipelines Ltd. (SNGPL). Undisputedly the gas produced by the respondent is liable to excise duty under section 2(19) of the Act read with S.R.O. No.552(I)/98 dated 3‑6‑1998. at the rate of 17.8 per 100 cubic meter. It is the case of the appellant that while going through the challans submitted before the respondent had short paid duty for the month of January, 1998; thus Show‑Cause Notice was issued to the respondent calling upon him to make payment of the said amount, and further as to why penalty be not imposed as envisaged under section 36‑B of the Act. The case came up for hearing before Additional Collector, Customs and Central Excise, Customs House, Quetta on 25‑4‑1998. After hearing the parties, it was held that Rs.490.6544.43 was found short paid during the month of January, 1998 and additional duty of late paid amount/short paid amount was ordered to be paid a 2% amounting to Rs.980,130 and an amount of Rs.20 Lakhs was imposed as penalty vide Order dated 18‑4‑1998. Being aggrieved from the same, appellant filed an appeal before Collector Appeals, Collectorate of Central Excise and Sales Tax (Appeals), Karachi. The said appeal was also dismissed vide order dated 16‑3‑1998; thereafter appeal was filed before the Customs, Excise and Sales Tax Appellate Tribunal, Karachi who after hearing the appeal accepted the same and remitted the fine as imposed by the Additional Collector Customs; hence the instant appeal.

3. We have heard Mr. K.N. Kohli, learned Deputy Attorney‑General for the appellant and M/s. M. Riaz Ahmed and Asif Fateh Sheikh, Advocates for the respondents.

4. Mr. Asif Fateh Sheikh, Advocate for the respondent at the very outset raised Preliminary Objection challenging the maintainabitity of the appeal on the ground of limitation, further added that no plausible explanation has been furnished for condonation of delay: thus we proceed to decide this question first.

5. Mr. K.N. Kohli, learned D.A.‑G. contended that copy of the impugned order passed by the Appellate Tribunal was received on 12‑9‑2000 and the office did not bring it to the notice of the appellant for filing appeal therefore delay was caused. It may be pointed out that the impugned order was passed on 2‑3‑2000, the copy of the judgment was delivered on 24‑8‑2000 and time allowed fur filing an appeal is 30 days. Considering the plea of the learned D.A.‑G. that copy of the order was received by the appellant in their office on 12‑10‑2000, still the appeal is barred by time. The explanation given by the appellant, is that office did not inform the appellant with regard to the receiving of the order therefore, appeal was tiled beyond period of limitation. It may be pointed out that by now it is settled that valuable right accrues to the other side by lapse of time and each day s delay has to be satisfactorily explained. Besides, there is a plethora of case -law, wherein it has been consistently field by the Hon'ble Supreme Court that Government being party to lis is to be treated at par with the other litigants. No preferential treatment can be accorded to the Government in computing limitation period, Government departments, are possessed of enormous resources and if it is not satisfied with the law, it is for it to change the same.

6. Mr. Asif Fateh Sheikh, Advocate further pointed out that provisions of section 5 of the Limitation Act are not applicable in the Customs case by virtue of section 29(2) of the Act as the Customs Laws are special laws and specific provisions of limitation is prescribed under the law; therefore, delay cannot be condoned under section 5 of the Limitation Act, besides, no satisfactory explanation of condonation was offered. The explanation offered in the application under section 5 of the Limitation Act is that office of the appellant received the order on 12‑9‑2000 and the appellant was not informed about the same. Suffice it to observe that the explanation offered by the appellant is not sufficient to condone the delay; therefore, we are not in agreement with the contention of Mr. K.N. Kohli, learned D.A.‑G. therefore, the arguments regarding condonation of delay is repelled. Reference may be made to the following case‑law:‑‑ (i) Mayar Khan v. Bakht Bibi and others 1974 SCMR 423; (ii) Muhammad Hussain and others v. Settlement Commissioner and others 1975 SCMR 304; (iii) Commissioner of Income‑tax v. Rais Pir Ahmed Khan 1981 SCMR 37; (iv) Ali Ahmed and another v. Fazal Hussain and others 1983 SCMR 1239; (v) Federation of Pakistan v. Niaz Ahmed 1997 SCMR 959; (vi) Central Board of Revenue, Islamabad through Collector Customs v. M/s. Raja Industries Pvt. Ltd. through G.M. and 3 others 1998 SCMR 307; (vii) Government of Balochistan Public Health Engineering Department through Secretary v. Muhammad Ibrahim 2000 SCMR 1028;

7. Mr.K.N.Kohli, learned D.A.‑G. attempted to argue that since the appeal before the Appellate Authority was not maintainable as the appellant had not deposited the amount as envisaged under section 35 of the Act. The learned counsel vigorously argued that the appellant was liable to deposit the entire amount which is a condition precedent for filing the appeal and further stated that provisions of section 36‑B of the Act are mandatory whereby additional duty and penalty had been imposed; therefore, Appellate Tribunal had no authority to remit the same. Mr. Asif Fateh Sheikh contended that the provision of sections 35 and 36‑B of the Act are not mandatory rather discretionary and learned Appellate Tribunal had exercised discretion reasonably, fairly and equitably; therefore, no interference is called for.

8. Adverting to the first contention of learned D.A.‑G. that the appeal was not maintainable in view of section 36‑B, as the amount determined by the forum was not deposited. To consider the said agreement. It would be appropriate to refer to section 36‑B of the Act which reads as under:‑‑ "Deposit, vending appeal, of duty demanded or penalty levied.‑‑(1) Where in any appeal under this Chapter the decision or order appealed against relates to any duty demanded in respect of excisable goods which are not under the control of Central Excise Authorities or excisable services or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the proper officer the duty demanded or the penalty levied: Provided that where in any particular case, the Appellate Tribunal is of the opinion that the deposit of duty demanded or penalty levied would cause undue hardship to such person, the Appellate Tribunal may dispense with such deposit subject to such conditions as it may deem tit to impose so as to safeguard the interest of Revenue: Provided further that the order for such dispensation shall cease to have effect on the expiration of a period of six months following the date on which order for dispensation was passed or until the order for dispensation is withdrawn earlier or the case is finally decided earlier by the Appellate Tribunal: Provided further that in any particular case, the Appellate Tribunal may direct that, pending decision on the appeal, the duty demanded or penalty imposed, alongwith the additional duty payable under section 313, be paid by the appellant in suitable instalments spread over a period not exceeding six months from the date of such direction." A plain reading of the aforesaid provision would show that by virtue of the first proviso, the Appellate Authority is vested with the Authority to dispense with such deposit conditionally or unconditionally, if Appellate Authority is of the opinion that deposit of duty and penalty, as the case may be, shall cause undue hardship to the appellant may dispense with the same. Since power to dispense with deposit of the entire amount is discretionary with the Appellate Authority and discretion like any other authority is to be exercised in a judicious, fair and reasonable manner. It may be observed that in the judicial system, right of appeal is one of the most valuable rights vested to an affected person and no one can be deprived of availing such remedy except in accordance with law. Learned Appellate Tribunal had exercised discretion in favour of the respondent and no prejudice has been caused to the appellant. It may be observed here that no objection regarding non‑depositing of amount as ordered by the Collector Customs was raised before the Appellate Tribunal; therefore, on this score also, the objection raised is not sustainable. Mr. Asif Fateh Sheikh while opposing the arguments of the learned D.A.‑G. contended that plausible explanation was offered by the respondent for not depositing the amount in time as admittedly the gas produced by the appellant is purchased by the WAPDA and in this regard the amount payable by the WAPDA was not paid and the respondent due to non‑payment by WAPDA could not make payment in time. The learned counsel referred to various documents whereby many written requests were made by the respondent asking WAPDA Authorities for making payment of the outstanding dues. Thus the argument of Mr. K. N.Kohli being devoid of merits is repelled.

9. Adverting to the next contention that provisions of section 3‑B of the Act are mandatory; therefore, penalty had been rightly imposed by the Collector and Appellate Authority had no jurisdiction to remit the same; it may be appropriate to refer to section 3‑B of the Act which reads as under:‑‑ "Levy of additional duty.‑‑If a person fails to pay the duty within the prescribed time, he shall, in addition to the duty payable under section 3, be liable to pay additional duty at the rate of one and half per cent. per month. Explanation.‑‑For the purpose of calculating additional duty, the period of default shall be reckoned from the day following the due date on which the duty was payable to the preceding day on which the duty is actually paid." It may be pointed out that section 3‑B of the Act corresponds with section 34 of the Sales Tax Act and Order 8, Rule 12, C.P.C. as in both, the word " liable" has been used. The words " shall be liable" has been defined by the Hon'ble Supreme Court in the case of Shamroz Khan and another v. Muhammad Amin and others, PLD 1978 SC 89 wherein it was held as follows:‑‑ "The question is of the meaning, of the words 'he shall be liable to have his defence, if any, struck out', and according to Mr. Inayat Elahi Khan, these words made it incumbent on the Court to strike off the defence of a defendant who had failed to supply his address. But according to the Oxford Dictionary the word 'liable' means:‑‑ "(1) Bound or obliged by law or equity; answerable; legally subject or amenable, (2) (a) Exposed or subject to or likely to suffer from (something prejudicial); in older use with wider sense, subject to (any agency or change). (b) Subject to the possibility of (doing or undergoing something undesirable). (4) Subject or subservient to. (6) U.S. likely." Webster's New International Dictionary, Second Edition, defines "liable" as:‑‑ "(1) Bound or obliged in law or equity; responsible; answerable;, as the surety is liable for the debt of his principal; also now rarely; with to; as, all his property is liable to pay his debts and to taxes. (2) Exposed to a certain contingency or casualty of an undesired character; is, liable to slip; liable to be injured." Similarly, according to Corpus Juris Secundum, the word "liable" has been variously defined as meaning:‑‑ "Bound or obliged in law or equity; answerable; likely or probable; obligated; responsible; accountable for, or chargeable with; justly or legally responsible; bound or obliged; qualified responsibility answerable; or compellable to make satisfaction, compensation, or restitution." Finally Jewitt in his Dictionary of English Law, 1959 Edition defines "liability" as:‑‑ "the condition of being actually or potentially subject to an obligation, either generally, as including every kind of obligation, or in a more special sense, to denote inchoate, future unascertained or imperfect obligation, as opposed to debts, the essence of which is that they are ascertained and certain. Thus when a person becomes surety for another, he makes himself liable, though it is unascertained in what obligation or debt the liability may ultimately result. " From the aforesaid definition, it can be inferred that imposition of penalty under section 3‑B of the Act was in the direction of the learned Additional Collector Customs, Excise and Sales Tax who proceeded on misconception of law and imposed penalty as he was under the impression that since the sales tax has not been paid; therefore, penalty is to be imposed compulsorily. Such approach of the learned Additional Collector was clearly erroneous. He was under the legal obligation to have considered the reasons offered by the respondents for not paying the amount in time. It may be observed that section 3‑B of the Act does not require that additional duty and penalty is to be levied invariably when assessee is unable to pay the duty in time. While going through the documents, the respondent has given cogent reasons for not making the payment in time which was not considered. As observed hereinabove, since the imposition of additional duty was discretionary authority vested with the Additional Collector and discretion has to be exercised reasonably, equitably and fairly; in the case in hand when the explanation offered by the respondent for not making the payment in time was not considered and penalty was levied. While disposing of the appeal the learned Appellate Tribunal on dilating upon the provisions of section 3‑B of the Act has held that it was a discretionary power; and further added that non‑payment of dues was neither deliberate nor wilful on the part of the respondent; therefore, it remitted the same and rightly so.

10. Thus in view of above discussion, we see no merits in the appeal which is dismissed. Parties are, however, left to bear their own costs. S. A. K./120/Q Appeal dismissed.