1990 PLP 943 (CLC)

‑‑‑Where there is power to pass order there is power also to pass interim order and similarly where there is jurisdiction to hear appeal and effect reversal, there is also, unless otherwise provided, inherent power to allow stay or suspension. S. Irtaza Hussain Zaidi fur Petitioner. Nemo for Respondents. Date of hearing: 28th September, 1989. WAJIHUDDIN AHMAD, J.‑‑Petitioner is a listed public company and a manufacturer, of paints. Its case in the instant petition is this: For the manufacture of its product "Latex" it imports raw material known as Vinyl Acetate Monomer (VAM). Sales tax on such raw material and end‑product is paid at 12‑1/2% subject to adjustability of payments at the point of import, on merger of the raw material and the end‑product and sales thereof. The Superintendent, Central Excise and Land Customs, City Division, Karachi has been allowing running adjustment in this behalf. As from 1‑7‑1981, on insertion of a proviso to subsection (4) of section 3 of the Sales Tax Act, 1951 the administration relative to collection of sales tax has been delegated to and vests in the Central Excise Authorities and ever since, the latter authorities have concurrently been dealing with sales tax as well as Excise duty. On a report dated 25‑9‑1986 from the staff of Directorate General of Vigilance and Inspection, Karachi, and on issuance of show cause notice, the matter of alleged non payment of Excise duty was taken up by the Assistant Collector, Central Excise and Land Customs, City Division, Karachi. That officer came to the conclusion that the above‑said raw material as well as intermediary product were detergents and emulsifiers classifiable under item No. 04.65 of the First Schedule to the Central Excises and Salt Act, 1944, thereby liable to Excise duty at 20% and exempted from payment of sales tax. The petitioner was, therefore, required to pay various amounts, as reflected in orders in Original Nos. 77/87 to 95/87 to satisfy department's balance claim of Excise duty on adjustment of Sales Tax already paid. The petitioner appealed under section 35 of the Central Excises and Salt Act, 1944, but such appeal was dismissed by the Collector (Appeals) per order dated 22‑3‑1989. A revision before the Federal Government was taken under section 36 of the Act and is said to be pending.

2. While the above revision was pending the petitioner was served with notice dated 22‑5‑1989 and required to show cause as to why action should not be taken for recovery of Central Excise duty, amounting Rs. 15,79,920.78 for past clearances, as the above‑said orders‑in‑original remained uncomplied with and appeals also stood dismissed by the Collector (Appeals). The petitioner submitted a reply, dated 11‑6‑1989, wherein, more or less similar questions were raised, as were the subject‑matter of the pending revision. The matter was disposed of by the Assistant Collector per order dated 19‑8‑1989 principally, on the ground that similar matters, as were earlier decided upto the appellate level could not be re‑agitated before him. The demand was required to be met within 30 days. The petitioner again appealed and also sought interim stay.

3. Grievance before us, in this petition, is that the order dated 19‑8‑1989 is illegal and that on appeal the Collector (Appeals) has acted unlawfully in refusing to consider and grant stay and in maintaining that he would hear the appeal as and when its turn comes, leaving the petitioner to meet and pay the allegedly antiquated demand‑improperly raised, as aforesaid.

4. We had heard Mr. I.H. Zaidi for the petitioner and dismissed this constitutional petition, vide our order dated 28‑9‑1989. These are the reasons for such order.

5. The manifest position is that the current proceedings pertain to an adjudication, which has already passed the stages of the Assistant Collector, Central Excise & Land Customs and the Collector (Appeals) and is pending before the Federal Government in Revision under section 36 of the Central Excises and Salt Act, 1944. All that the impugned order‑in‑original seeks to implement are recoveries under such orders. The fundamentals of the controversy, rightly or wrongly, have already been decided in the earlier set of proceedings residuary out of which, the Federal Government, in its revisional jurisdiction, is currently seized of. Rightly or wrongly we say, advisedly because, that question is not before us and we would not like to express any opinion, one way or the other in relation thereto.

6. In so far as the current dispute is concerned, it proceeds on the above referred determination of the basic question of payability of Excise duty instead of sales tax with regard to the latter of which the goods in question have been held to be exempted. So long as such orders, on merits, stand the same cannot be questioned in aliunde proceedings. All that the Excise Authorities, pursuant to the impugned order in original are doing is to effect recoveries under a different set of orders which have otherwise become enforcible. In reality it seems to us that so long as the orders, which currently stand seized in revision stand and are not either upset or suspended the Excise Authorities were not even obliged to pass any formal order of recovery as the one impugned here, and recoveries could be made under the subsisting orders themselves as the same expressly provide for recoveries. Like would be the incidents in appeal against such order. The rule is that a party cannot leave the basic order in the field and choose to go about attacking procedural and formal orders following thereupon and yet remain unaffected by the impact of the former.

7. Examining the case from another angle, it is nobody's case that mere filing or pendency of a revision, under section 36 of the Central Excises and Salt Act, 1944, operates as a stay of the orders questioned therein. The impugned exercise, to make recovery, is, as said earlier, procedural and not substantive and B the authority seized of a matter in implementation cannot go behind the charging orders, on which compliance is automatic. Liability has been determined under the orders earlier in time whereas through the impugned orders only the machinery and procedure for recovery has been set into motion. The position of the appeal pending before the Collector (Appeals) is also no different since the source of power remains the same as in the context of the order‑in‑original. On such basis even the Collector (Appeals) is devoid of authority to go behind the earlier orders passed on the merits of the dispute. If there is similar lack of power of authority in relation to grant of stay, the Collector (Appeals), also, has not acted illegally or without lawful authority in declining to consider or grant stay as claimed by the petitioner: It is correct as urged that where there is power to pass orders there is power also to pass interim orders and similarly where there is jurisdiction to hear an appeal and effect reversal there is also, unless otherwie provided, inherent power to allow stay or suspension. But as observed, the stage for that has long since passed and the presently impugned are not proceedings in which any basic charge can even be conceived of.

8. For the foregoing reasons, the above constitutional petition stands dismissed in limine. A.A./1‑104/K Petition dismissed