2012 PLP (Trib (PTD)

MUHAMMAD NAWAZ BAJWA, JUDICIAL MEMBER.

This appeal is directed against the Order-in-Appeal No.201 of 2008, passed by the Collector (Appeals), Customs, Sales Tax and Federal Excise, Multan respondent No.3, on the 3rd of March, 2008, whereby he rejected an appeal of the present appellant against the Order-in-Original No.796 of 2007 recorded by Assistant Collector, Sales Tax (Refund) Multan, on the 17th of July, 2007, through which sales tax refund claim of the appellant was held inadmissible in terms of sections 10(4) and 11(2) of the Sales Tax Act, 1990; read with Refund Rules.

2. Brief facts of the instant case are that during process of refund claim filed by the present appellant bearing sales tax Registration No.0407640500646, some discrepancies were observed on the basis whereof it was charged with the violation of sections 2(14), 4, 7, 8, 10, 26 and 73 of the Sales Tax Act, 1990, read with refund rules and it was called upon to show cause as to why the Sales Tax Refund may not be rejected in terms of sections 10(4) and 11(2) of the Act read with Refund Rules, 2002, notified vide S.R.O. 575(I)/2002 dated, the 31st of August, 2002 and why penal action may not be taken under section 33(11)(c) of the Sales Tax Act. The Assistant Collector (Refund) adjudicated upon the matter and the refund claimed was held inadmissible as mentioned above. The appellant filed an appeal before the Collector (Appeals) which was rejected as aforesaid.

3. At the outset before us, the learned authorized representative of the present appellant raised a legal objection against the adjudication made by the Assistant Collector and passage of the order-in-original by him on the basis of lack of jurisdiction with the adjudicating Authority to try the case in hand. The Adjudicating authority i.e. Assistant Collector had acted under the then section 45 of the Sales Tax Act, 1990, wherein by virtue of subsection (1), clause (iii) he could have adjudicated cases falling under subsection (2) of section 11 and section 36 ibid provided that the amount of tax involved exceeded ten thousand rupees but did not exceed One Million rupees and here in this case the amount involved was quite higher than the limit of the amount mentioned in the clause. The amount in this case was Rs.1,69,03,014.

4. The learned DR took adjournments for verifying as to of the Board had varied the jurisdiction and powers of any officer of the sales tax or a class of officers of sales tax under the first proviso to the then section 45 of the Act by some notification in the official gazette, but the same could not be produced and then the learned D.R. came up with a plea that the proceedings taken by the Assistant Collector (Refund), Sales Tax, were not adjudicated within the ambit of section 45 of the Act ibid, and that, in fact, these were the proceedings taken by him under rules 30 and 37 of the Sales Tax, Rules, 2006, in that, the subject-matter of the present proceedings did not fall within any of the cases involving assessment of tax, charging of default surcharge, imposition of penalty and recovery of amount erroneously refunded or any other contravention under the Act and that rather, it related to sanction and payment or otherwise of refund claimed mentioned under Rule 30 and to action on inadmissible claims mentioned in Rule 37 of the Rules, 2006.

5. We have examined both the provisions contained in the Rules 30 and

37. The former belongs to sanction of payment of refund claims, and in the case of inadmissible claims, action has been proposed by the officer in-chare in Rule 37 to issue a notice requiring the claimant to show cause as to why the claim or, as the case may be, part thereof should not be rejected and as to why the claimant should not be proceeded against under the relevant provisions of the Act. After issuing show-cause notice, no further proceedings have been suggested to be taken by the said Officer in-charge in rule 37 of the Sales Tax Rules, 2006. Then we went through the Act very carefully, and found that the expression "assessment of tax" mentioned in subsection (1) of section 45 of the Sales Tax Act, did include the claim of input tax credit or refund which is not admissible under this Act, when the provisions of section 11, subsection (2) of the Act were consulted, therefore, the instant case of the present appellant could not be excluded from the purview of the then section 45 which provided pecuniary limits for various officers to make adjudication especially in the absence of any further proceedings having not been suggested by Rule 37 referred to by the learned DR. Accordingly the proceedings taken by the present adjudicating authority i.e., Assistant Collector can very safely be held to have squarely fallen in and to have been made under the then section 45 of the Act by the Assistant Collector who, in turn, could not have adjudicated upon the matter with regard to the amount exceeding one million of rupees in the face of the limits fixed thereunder for various officers. The plain reading of the then section 45 along with the proviso clearly reveals that the Assistant Collector (Refund), Sales Tax, could not at all have adjudicated upon the matter for lack of pecuniary jurisdiction. In this behalf the learned AR had also placed reliance upon a pronouncement enshrined in 2010 PTD (Trib.) 1636, which was also on all fours and identical with the facts and the law involved in the present case and where a similar order was held to be void. In this view of the matter the adjudication made by him is held to be illegal, viod ab initio and coram non judice. For what has been discussed above, the present appeal is accepted and both the orders-in-original and in appeal are hereby annulled. C.M.A./272/Tax(Trib.) Appeal accepted.