2011 PLP (Trib (PTD)

Titled appeal has been filed at the instance of the revenue calling in question the impugned Order-in-Appeal No.721 of 2007 dated 31-12-2007 passed by the learned Collector of Customs, Sales Tax and Federal Excise (Appeals), Faisalabad.

2. The facts giving rise to this appeal are that during the processing of refund claim filed by Messrs Kamal Fabrics, Faisalabad an amount of Rs.2,347,528 was deferred due to objections like abnormal tax profile, MR No. and date mismatch and the amount pertaining to Messrs Raza Company and Messrs Q.S. Enterprises was partly deferred till the deletion of their name from the suspected list. Messrs Kamal Fabric Faisalabad was charged with violation of sections 2(14), 7, 8(1)(a), 10(4), 23 and 26 of Sales Tax Act, 1990 read with Sales Tax Rule, 2004. The adjudication proceedings culminated in passing of Order-in-Original for rejection of refund amounting to Rs.1,791,

791. Being aggrieved Messrs Kamal Fabrics, Faisalabad filed an appeal before the learned Collector (Appeals), Faisalabad, who, vide Sales Tax Order-in-Appeal No. 721 of 2007 dated 30-12-.2007 set aside the Order-in-Original to the extent of the above mentioned two Companies. The Revenue has now approached the Tribunal assailing the said Order-in-Appeal.

3. The DR has defended the order-in-original and reiterated the contentions already on record. The learned counsel of the respondent has challenged the Order-in-Original and defended the Order-in-Appeal. The AR of the respondent has contended that the name of Messrs Suleman Fabrics has been. deleted from the list of suspected unit vide order dated 6-1-2007 and that Messrs Suleman Fabrics have been de-registered as shown in its computer profile dated 17-3-2008. He contended that in case of Messrs Q.S. Enterprises the impugned show-cause notice and consequent adjudication is illegal as the learned adjudicating authority has ordered for recovery of already sanctioned amount of refund because recovery against the suspected persons can be made upon his black listing by the Collector of Sales Tax after adhering to the due process of 1 law as provided under section 21 of the Act, and the Sales Tax Rule, 2006 notified vide S.R.O. 555(I)/2006 dated 5-6-2006. He placed reliance on judgment reported as 2010 PTD (Trib.)

857. The AR of the respondent contended that purchases were made in June, 2005, when the supplier was not suspected and his subsequent inclusion in the list of suspected units in the year, 2007 cannot be charged retrospectively. He also placed reliance on landmark judgment of august Supreme Court of Pakistan reported as 2005 SCMR 492.

4. We have heard the rival arguments and perused the records before us and we find ourselves in agreement with the learned counsel of the AR. The relevant portions from the reported judgment 2010 PTD (Trib.) 857 and 2005 SCMR 492 are reproduced as under respectively. 2010 PTD (Trib.) 857: "The learned counsel for the respondent assailed that no liability can be created against any person merely on suspicion and doubt as no specific order for blacklisting of such person or suspension of his registration has been provided by the department and even no action or proceedings had so far been taken against the said suppliers despite expiry of years of inclusion of their names in the list of suspected units. It is however, very clear that mere inclusion of a unit in a list of suspicious units or declaring as a suspected unit does not render it fake unless it is declared as a blacklisted unit after due process of law as provided under section 21 of the Act. hence, and that too at the time of transaction without adhering due process of law and without declaring the alleged units as blacklisted, the instant charge of suspected unit against the respondents is held to be illegal, unlawful and premature and no more recovery stands against the respondents. 2005 SCMR 492 "It is well settled principle of law that the executive orders or notifications, which confer right and are beneficial, would be given retrospective effect and those which adversely affect or invade upon vested right cannot be applied with retrospective effect."

5. In view of the above circumstances and the case-laws cited supra, we find that the order-in-appeal passed by the Collector (Appeals), Faisalabad, is within law and we find no reason to interfere with the same.

6. The appeal filed by the Revenue is accordingly dismissed. H.B.T./65/Tax(Trib.) Appeals dismissed.