Powers of adjudication

Appellant assailed order passed by Commissioner on the ground that show cause notice was issued by Additional Commissioner but the order was passed by Commissioner

Validity

Section 60(2), Punjab Sales Tax on Services Act, 2012, empowered the Commissioner to adjudicate any case falling in the jurisdiction and powers of any officer subordinate to him but it did not mean that whenever Commissioner felt it appropriate he could initiate the proceedings himself, which otherwise fell within the pecuniary jurisdiction of the subordinate officer, without mentioning the reasons for the same

Impugned order was bad in law as it curtailed a right of appeal of the appellant

Case was remanded to the competent officer for adjudication afresh

Appeal was accepted.

Commissioner (Appeals), in the first round of litigation, had remanded the matter to the assessing officer but the Commissioner, without any reason, had taken up and decided the matter

If Additional Commissioner was not available at the relevant time, Commissioner could have mentioned such fact in the impugned order or before passing the order while issuing notice to the tax-payer

Subsection (2) of S.60 of Punjab Sales Tax on Services Act, 2012, empowered the Commissioner to adjudicate any case falling in the jurisdiction of any officer subordinate to him but it did not mean that a case initiated by the subordinate officer would be taken up by the Commissioner without mentioning the reasons for the same because such act amounted to curtailment of a forum for the taxpayer

Appellate Tribunal remanded the case to the competent authority with direction to decide the case afresh.

Appellant assailed order passed by Commissioner on the ground that the Appellate Tribunal had remanded the case to the Additional Commissioner therefore, Commissioner had no authority to pass the impugned order

Validity

Appellate Tribunal, while remanding the case, had made specific directions that the matter would be heard by the first forum i.e. the assessing officer (Additional Commissioner)

Appellate Tribunal had further directed that the observations made by the Tribunal would be taken into consideration and a speaking order would be passed but none of the directions were complied with

Commissioner had circumvented the jurisdiction of the assessing officer and issued fresh show cause notice without having any need for the same

Reference to S.60(2) of Punjab Sales Tax on Services Act, 2012 was of no avail as the case was one of non-compliance of specific direction made by the Appellate Tribunal

Appellate Tribunal set aside the order passed by Commissioner and remanded the case to the Additional Commissioner for decision afresh.

Initial show-cause notice was issued by the Additional Commissioner but thereafter the proceedings were carried out by the Commissioner without mentioning any reason for the change of forum

Validity

Subsection (2) of S.60 of Punjab Sales Tax on Services Act, 2012, empowered the Commissioner to adjudicate any case falling within the jurisdiction and powers of any officer subordinate to him

Such power meant that the Commissioner could initiate proceedings which otherwise fell within the pecuniary jurisdiction of the subordinate officer but it did not mean that a case initiated by the subordinate officer could be taken up by the Commissioner without mentioning the reason for the same because same amounted to curtailment of a forum for the taxpayer.

Customs Department has the authority to collect sales tax and income tax at import stage in the capacity of collecting agent and can recover escaped/short paid customs duty and regulatory duty after due process of law, but has no power to adjudicate the cases of short recovery of sales tax and income tax under S.11, Sales Tax Act, 1990 and S.162, Income Tax Ordinance, 2001

Customs Department can recover the amount of sales tax and income tax upon receipt of notice from the Officer of Inland Revenue and Commissioner of Income Tax in terms of S.48 of Sales Tax Act, 1990 and S.140 of Income Tax Ordinance, 2001.

Section 179 of the Customs Act, 1969 was clear with regard to determination of the powers of the adjudicating authority on the basis of "amount of duty and taxes involved"

Case involving Rs.1,142,980.00 for obtaining clearance of goods

Competent authority to adjudicate on such a case was Additional Collector of Customs under Cl.(ii) of S.179(1) of Customs Act, 1969

Collectorate of Customs could not issue show-cause notice

Authority defined in S.179(1) of the Customs Act, 1969, had to exercise powers accordingly

In the present case, no notification of the Federal Board of Revenue was presented, empowering the Collectorate of Customs for exercising powers of the Board itself in negation of subsection (2) of S.179 of the Customs Act, 1969, which could not be assumed under any pretext/circumstances

Said lapse rendered order of the Collectorate as without lawful authority and jurisdiction; hence ab initio void superstructure thereupon, had to crumbled down.

In presence of appealable order, fresh order could not be passed even in the shape of reassessment order or through issuance of show-cause notice under S.180 of the Customs Act, 1969 while exercising powers under the provisions of S.179 of the Customs Act, 1969

In case of non-filing of appeal against the assessment order, the transaction became past and closed one and attained finality, and could not be disturbed

Impugned show-cause notice was vacated and order passed by the forum below being illegal, void ab initio to the extent of appellant/importer, was set aside.

S.R.O. No.555(I)/96 dated 01-6-1996 was clearly a procedural notification giving powers to officers of Sales Tax Collectorate to adjudicate upon matters in respect of cases involving assessment of sales tax, charging of additional tax, imposition of penalty and recovery of amount erroneously refunded subject to limitation and conditions as specified therein

Said notification did not create any right or liability

S.R.O. No.555(I)/96 dated 01-6-1996 was replaced by permanent legislation that was S.11(3) of Sales Tax Act, 1990 which was omitted and S.45 was substituted

Subsequently, S.45 of Sales Tax Act, 1990 was omitted by Finance (Amendment) Ordinance, 2009

Such amendments continued in force through subsequent Finance (Amendment) Ordinance, 2010 and finally through Finance Act, 2010, and such amendments were saved which still continued in the statute

Notifications issued under said provisions had not been saved in Sales Tax Act, 1990 or through any notification

If notification would be considered as a by-law that had continued notwithstanding the repeal of S. 11(3) of Sales Tax Act, 1990 then it would be in conflict with S. 24 of General Clauses Act, 1897.

Contention of importer was that Deputy Collector of Customs who had issued show-cause notice had no jurisdiction as provided under S.179 of Customs Act, 1969 and order-in-original passed by him was coram non judice

Validity

Power vested in any authority can only be exercised by the authority, in default thereof, the entire action would be without jurisdiction void ab initio and of no legal effect

Question regarding jurisdiction was foundation stone for a judicial or a quasi-judicial functionary to exercise its power/authority and no sooner the question of jurisdiction was determined in negative, the whole edifice built on such defective proceedings was bound to crumble down

Show-cause notice was issued for amount of customs duty and other taxes by Deputy Collector Adjudication who had no jurisdiction to issue such show-cause notice as Deputy Collector could not issue a show-cause notice and adjudicate upon for an amount exceeding eight hundred thousand rupees and consequently passing of impugned order-in-original was null and void

Authority who issued show-cause notice and passed order-in-original was not competent, having no jurisdiction to adjudicate upon the act of importer of concealing and filing un-true declaration in order to get the goods released

Pecuniary jurisdiction of Customs Officials had been described in S.179(1) of Customs Act, 1969 and exercise of jurisdiction by an authority was mandatory requirement and its non-fulfilment would entail entire proceedings to be coram non judice and such defect would not be technical but render entire exercise of authority to be ab initio void and illegal

Impugned order-in-original was set aside in circumstances.

Show-cause notice was issued to the taxpayer by an officer and appeal thereagainst was also heard by the said officer who authored the order-in-original against the taxpayer

Taxpayer's appeal filed before the Appellate Tribunal comprised of two members, one of which (member technical) was the said officer and said officer authored the judgment of the Tribunal, which again went against the taxpayer

Validity

Interest of the Department was directly involved in the present case and the beneficiary of the impugned judgments was the Department, and said officer (member) being employee of the Department was certainly obliged to save the interest of the Department

Being Member (Technical), said officer had issued show cause notice and gave decision against the taxpayer, and he could not therefore, sit as a member of the Appellate Tribunal before whom the same issue was in the shape of the appeal, which was filed for a decision afresh

No one could sit as a judge to save and decide the matter in which his interest was directly involved, and in the present case, not only the interest of the author of the impugned judgment was involved, also the decision rendered in the impugned order-in-original by him, was under challenge

Impugned judgment was therefore not sustainable in view of all canons of law, ethics, the demands of justice and equity

High Court set aside the impugned judgment and remanded the matter to the Appellate Tribunal with the direction that the said officer should be excluded from the Appellate Tribunal for the hearing of the taxpayer's appeal

Reference was allowed, accordingly.