2015 PLP (Trib (PTD)

MUHAMMAD JAWED ZAKARIA (JUDICIAL MEMBER).

The instant Miscellaneous Application has been filed by the applicant/taxpayer praying for "review" of the order bearing STA No.37/KB/2011 dated 20-2-2013 passed by this Hon'ble Tribunal. The memo. of application titled as "REVIEW APPLICATION FOR AMENDMENT OF APPELLATE ORDER STA NO.37/KB/2011 DATED 22 FEBRUARY, 2013" with the following grounds praying therein that the order passed in S.T.A. No.37/KB/2011 dated 22-2-2013 may be rectified or amended appropriately by allowing the appellant relief against the impugned Order-in-original:-- "(a) That there is only reporting error in declaring purchase value but there is no excess claim of input tax involving loss of revenue to the exchequer which is verifiable from impugned Show-Cause Notice, the books, ledger and the audited accounts; (b) That any order passed beyond the vires and scope of show-cause notice is illegal and void; (c) That there is only a procedural lapse and the law does not penalize any bona fide taxpayers on technical mistakes and errors and the demand raised is unjustified; and (d) The appellant had already applied for the revision of sales tax return and after approval by the competent authority, the reporting error will be rectified."

2. However, on the date of hearing i.e. 17-9-2014, despite valid service of notice, none appeared on behalf of the appellant. The appellant was called thrice to contest its case but neither the appellant nor any authorized representatives or no one appeared for adjournment. Taking a lenient view and in the interest of justice, we placed the case of the appellant at last number and after hearing all the other cases, the appellant was again called to appear for hearing but in vain. The appellant neither appeared nor submitted any adjournment application. None appeared for the Public Limited Company/taxpayer nor on behalf of the counsel for the applicant. It is quite obvious from the record that this is not 1st time, the applicant remained absent. The impugned M.A. (Rectification Application) was filed and registered on 10-4-2013. Whereas on the following dates of hearing either the applicant/counsel of the applicant obtained adjournments or remained absent:-- S# Date of Hearing 1. 10-10-2013 - Applicant's counsel obtained adjournment 2. 30-10-2013 - Applicant/counsel ABSENT 3. 19-11-2013 - Assistant of counsel of the applicant obtained adjournment 4. 22-1 2014 - Applicant/counsel ABSENT 5. 9-4-2014 - Applicant's counsel obtained adjournment 6. 9-6-2014 - Applicant's counsel obtained adjournment 7. 25-8-2014 - Applicant/counsel ABSENT. 8. 17-9-2014 - Applicant/counsel ABSENT

3. It appears that the applicant or his counsel is not interested to pursue the matter seriously. However, in the interest of justice, we intend to dispose of this Miscellaneous Application on merits of the case as per available record.

4. On the other hand, Mr. Zulfiqar Ali Memon, learned DR represented the Department. The learned DR for the respondent department, at the outset pointed out that the Miscellaneous Application is not maintainable as review of order STA No.37/KB/2011. The learned DR further argued that the learned Tribunal does not have powers of review its own order and he relied on decision of Hon'ble High Court in case of CIT v. Move (Pvt.) Ltd. reported as 2013 PTD 2040 and decisions from Indian jurisdiction reported as (1990) 182 ITR 361, AIR 1970 SC 1273, (1998) 232 ITR

395. Learned DR prayed for rejection of the instant Miscellaneous Application by arguing that the mistake pinpointed out in the said rectification application by the learned AR is not apparent from the record and is not patent and obvious, which can be seen without going into details. He added that the Tribunal had passed order after giving opportunity to both the parties and after considering all the facts and circumstances of the case. He further added that the applicant instead of filing Reference Application preferred Rectification Application after expiry of limitation period of Reference.

5. We have heard the learned D.R. and have also gone through the records of the case and have perused the aforesaid application which runs into repetitive 14 paras.

6. The order of Tribunal is very comprehensive covering all aspects of the case, grounds/arguments raised during the hearing. The rectification application filed is a sort of review not rectification. Learned AR prayed for recalling/rehearing. This tantamounts to reviewing/revisiting which is beyond the scope of rectification. We append below the relevant extract for easy reference of arguments of both the parties considered by the Tribunal in STA No.37/KB/2011:-- "

3. During the hearing, Mr. Zeeshan-ur-Rehman, ACA appeared on behalf of the appellant and submitted that in terms of impugned show-cause notice, the respondent had observed an incorrect reporting in the appellant's tax returns of July, 2005 and August, 2005 whereby purchases were incorrectly reported by the appellant/taxpayer. The Appellant/Taxpayer was asked to clarify the same and file a revised return to correct the purchases. The appellant explained that such reporting was a result of an inadvertent act whereby value of purchases was incorrectly reported as Rs. 4,621,712,577 and Rs.5,040,470,619 instead of actual value of Rs.4,626,651,711 and Rs.5,093,969,759 in July 2005 and August 2005 respectively. The appellant also filed an application for revision of subject returns under Section 26(3) of Sales Tax Act, 1990 for correction of such erroneous reporting in tax returns.

4. The AR argued that without considering the facts of the case, the CIR (A) surprisingly passed the impugned assessment order and framed tax liability to the tune of Rs.8,765,749, calculated by applying applicable rate of Sales Tax on difference between actual and declared value of purchase. He submitted that copies of purchase registers and summary statements and original sales tax returns of relevant tax periods of July and August 2005 have also been filed with this Tribunal, which clearly shows that input tax reported in these returns was bona fide and the contention of the respondent for appellant's excess claiming of input tax was incorrect and also outside the vires of the impugned show-cause notice. In support of his contentions, the learned counsel placed reliance on various reported and unreported case-laws, i.e., Appeal No. H-113/04 passed by Customs, Excise and Sales Tax Appellate Tribunal, Karachi, Appeal No.H-63/2006/13737 passed by Customs, Excise and Sales Tax Appellate Tribunal, Karachi, 2010 PTD 1515 and 2009 PTD 999 whereby the Courts have held that Orders passed beyond the vires of SCN are illegal, void and liable to be struck down.

5. The learned AR also vehemently argued that the both impugned assessment order and appellate order also took an erroneous view that the appellant could not file revised return after expiry of stipulated time period, i.e. 90 days of filing return. He submitted that in terms of section 74 of Sales Tax Act, 1990, where any time or period has been specified under any of the provisions of the Act or rules made thereunder within which an act, or thing is to be done, the Board may condone the time period for performance of such act. He contended that the appellant's application for revision of return is still unattended by Commissioner, LTU Karachi. He submitted that any time limit prescribed in the Sales Tax Act, 1990 was mandatory to the tax functionaries only and for tax payer, the said time limit would be directory as has been held in 2003 STR 670 and 2003 STR 668 whereby Honorable Appellate Tribunal has held that even delay in filing of original/normal sales tax return is condonable if there is no revenue loss involve in such case. However, without prejudice his earlier ground of appeal, the AR argued that the appellant could not be penalized merely on procedurals laps i.e. delay in filing of request for return revision as there is no revenue loss involves in the instant case. In this regard, he placed reliance on case-laws reported as 2010 PTD 1515 and 2002 PTD 1455.

6. On the other hand, Mr. Badar-u-Din, learned D.R appeared on behalf of the Department vehemently opposed the contention submitted by the learned counsel for the Taxpayer and supported the impugned Order-in-Appeal and Order-in-Original. He reiterated upon the non-compliance of the same arguments which submitted before the taxpayer resulting into the present levy.

7. We have considered the arguments of learned representative of both the parties and have also perused the record. It is quite unthinkable that organizations like taxpayer incorrectly report the business results to the connected stakeholders and subsequently place the responsibility on the department for its own poor reporting or suo motu grant of extension under section 74.

8. Since the taxpayer was and still unable to reconcile the difference in sales amounting to Rs. 614 (M), missed Sales Tax invoices on sales of 3.8(M) besides reconciling the booking error of Rs. 618 (M), we do not hesitate to maintain the order of CIR(A)."

7. It is obvious from the impugned order of this Tribunal/Bench that the learned Bench while passing original order in STA No.37/KB/2011 dated 20-2-2013 has applied conscious mind and have had considered the arguments of both the parties and facts of the case at length and dealt with elaborately and the propositions as raised were answered and decided by the Tribunal with the reasons to that effect. Now, the applicant has raised the same factual controversies to be addressed by the Tribunal through these applications for rectification of the order of the Tribunal. The same contentions have been raised and same arguments have been advanced by the learned AR in the instant applications. Therefore, we have been left with no choice but to state here the limitations from the aspect of scope of the provisions of section 57 of the Sales Tax Act, 1990 in order to understand the applicability of the said provisions in real perspective. We append below the provision of Section 57 of the Sales Tax Act, 1990 for easy reference:-- "

57. Rectification of Mistake. - - (1) The officer of Inland Revenue, Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner. (2) No order under subsection (1) which has the effect of increasing an assessment, reducing a refund or otherwise applying adversely to the taxpayer shall be made unless the taxpayer has been given a reasonable opportunity of being heard. (3) Where a mistake apparent on the record is brought to the notice of the officer of Inland Revenue, Commissioner or Commissioner (Appeals), as the case may be, and no order has been made under subsection (1), before the expiration of the Financial year next following the date on which the mistake was brought to their notice, the mistake shall be treated as rectified and all the provisions of this Act shall have effect accordingly. (4) No order under subsection (1) shall be made after five years from the date of the order sought to be rectified."

8. From the bare reading of the provisions of section 57 of the Sales Tax Act, 1990 it was obvious that an OIR, CIR(A) or the 'Tribunal' may amend any order passed by it so as to rectify any mistake apparent from the record qualified for rectification of such mistake. An error in the order sought to be rectified must be apparent on the face of the record. The powers of the Tribunal for rectification mistakes cannot be extended or allowed to be stretched to authorize the Tribunal to sit in judgment as an Appellate Court against its own order and reverse the same by finding faults or by taking additional grounds/evidence to a conclusion in favour of the applicant. The Hon'ble Supreme Court of Pakistan in the case of CIT v. Shadman Cotton Mills Ltd. reported as 2008 PTD 253 (SC. Pak) and in another landmark judgment in the case of National Food's case reported as 1993 SCMR 687 = 1992 PTD 570 has been pleased to observe in para-5 of the judgments in respect of power to rectify any mistake which is apparent from record, as under:-- "Therefore, essential condition for exercise of such power is that the mistake should be apparent on the face of record; mistake which may be seen floating on the surface and does not require investigation or further evidence. The mistake should be so obvious that on mere reading the order it may immediately strike on the face of it. Where an officer exercising power under section 35 enters into the controversy, investigates into the matter, reassesses the evidence to take into consideration additional evidence and on that basis interprets the provisions of law and forms an opinion different from the order, then it will not amount to 'rectification' of the order. Any mistake which is not patent and obvious on the record, cannot be termed to be an order which can be corrected by exercising power under section 35."

9. In the above referred case-law, the Hon'ble Supreme Court of Pakistan has been pleased to enunciate cardinal principles to the effect that the mistake should be apparent on the face of the record and may be seen floating on the surface of the record and it should be patent and obvious on the record. Moreover, the power to rectify mistakes under the Sales Tax /Income Tax/FED laws cannot be stretched to the extent of review of an order or to the extent of authorizing the Tribunal or the authority concerned (which passed the order) to sit in judgment as an Appellate Court against its own order. Obviously, in the legal parlance, 'review' of an order/judgment is a different connotation of law under the administration of civil and criminal justice than that of 'rectification' of an order under the tax laws. The power conferred by this provision is a power to correct mistakes and not a power of review, under section 57 of the Sales Tax Act, 1990, authority/Tribunal cannot be permitted to revise/re-visit or review its earlier order under the grab or rectification application under section 57 of the Sales Tax Act, 1990. A review cannot be undertaken in the guise of rectification. The Karala High Court CIT v. Ram Bahadur Thakur Ltd., (1999) 237 ITR 217 (Ker), held that, "there was possibly a mistake in the original order, but it was a debatable one. Rectification power could not be used in such a case." It is also our considered opinion that the power of the authorities/ATIR (Tribunal) in section 57 of the Sales Tax Act, 1990 is confined only to amend the orders with a view to rectify any error or mistake apparent from the record. Neither section 57 of the Sales Tax Act, 1990 nor Rules made thereunder nor ATIR's (Tribunal) Rules confers on the Tribunal the power to review its own order. A power to rectify a mistake does not include a power to review. A power to review can be exercised only where the statute itself grants such power. In the absence of grant of such power of review under Sales Tax Act, 1990, it is not possible for the Appellate Tribunal Inland Revenue to review its own order. The power under section 57 of Sales Tax Act, 1990 is undoubtedly a limited power. It is not a power of revision or review, but it is limited to correcting only those mistakes which are apparent flouting on the surface of the record.

10. From the above, it became clear that the rectification as provided under section 57 of the Sales Tax Act, 1990 having limited scope only to the extent of rectifying any mistake in the order by the Authority itself who passed the order and the mistake sought to be rectified must be a mistake apparent from the record. There appeared no room for re-employment of any argument on any legal/factual issue which has already been dealt with in the main order by the forum concerned for questioning the same for its resolution in a different legal perspective suitable to the applicant. What originally decided by the forum concerned Tribunal in respect of the legal issues as well as on the factual issues would be an answer to the same contentions and the same arguments if again raised under the umbrella of an application for rectification of the order. The Tribunal or the forum concerned while dealing with a rectification application cannot transgress its authority or assume jurisdiction to sit in judgment of its own order and start scrutinizing its order as is done by an appellate forum. Of course, the law provides higher forums for this purpose.

11. While seeing the order of the Tribunal in the context of averments made in the instant review application or so called rectification application, we have found that the taxpayer in fact sought reappraisal of factual issues. These applications for rectification which in our view, would amount to enlarging the scope of provisions of section 57 of the Sales Tax Act, 1990 to the extent of sitting in judgment by an appellate forum. In these circumstances, we do not see any justification to reopen the decided issues by acceding to the request of the applicant as made through this application. Moreover, in the case in hand no mistake apparent from the record liable to be rectified appeared in the order of the Tribunal bearing STA No.37/KB/2011 dated 20-2-2013. The issue raised requires detailed discussion, re-investigation and re-appraisal of matter, re-assessing of evidence, examination and this exercise, of course does not fall under the limited scope of rectification of mistake apparent. Hence even on this score the rectification application moved by the applicant/taxpayer is not sustainable on facts and in law and fails. From the foregoing discussion, as no mistake apparent floating from the surface of order of Tribunal, therefore, in our humble opinion reconsidering the same issue would tantamount to review of the appeal order and not rectification of mistake apparent from record. The said provision to Section 5 of Sales Tax Act, 1990 cannot be invoked as an alternate or substitute of an appeal, revision or review.

12. Before parting with this judgment, we may observe that the failure by the appellate authority to consider an argument advanced by either party for arriving at a conclusion is not an error apparent on the record, although it may be an error of judgment. There is no scope for rectifying an error of judgment by invoking such provisions like section 57 of the Sales Tax Act, 1990.

13. Resultantly, the above miscellaneous application shall stand rejected. HBT/124/Tax(Trib.) Application rejected.