Sales Tax Appeal No. 102/LB of 2001, decided on 8th May, 2002 Versus Sales Tax Appeal No. 102/LB of 2001, decided on 8th May, 2002

ZAFAR-UL-MAJEED, MEMBER (TECHNICAL).--- This appeal has been filed by Messrs Shahbaz Nawab Cotton Ginners Khair Pur Road, Kehror Pacca against Sales Tax Order-in-Original No.446 of ,1999-2000, dated 14-6-2000 passed by the Assistant Collector Sales Tax, Multan. By this Border, the learned Adjudicating Officer has directed the appellants to pay sales tax amounting to Rs.437368 alongwith additional tax on the ground that the appellant unit did not correctly declare the-supplies of cotton seed produced during the years 1996-97 and 1997-98. Actual supplies of cotton seed were determined by the Department on the basis of supply of cotton lint declared by the appellant and short paid amount of sales tax worked out as aforesaid.

2. The appellants .have challenged the impugned order primarily on the ground that it yeas an ex-parte order passed by the Adjudicating Officer without serving them with a show-cause notice, or granting them. opportunity of personal hearing it has also been argued on behalf of the appellants that during the period in question besides cotton lint produced by them they purchased cotton lint from the market as well but the Department arbitrarily worked out the quantity of cotton seed produced on the basis of same formula which was not disclosed to them. The Department has, therefore, erred in calculation of the quantity of cotton seed produced on the basis of the quantity of cotton lint supplied by them. Learned counsel further submitted that if the appellants were given an opportunity to explain their aforesaid contention, the Department might not have raised the demand against them.

3. Learned Departmental Representative opposed the appeal. He was directed to make available copy of the show-cause notice and necessary information about the formula of production of cotton seed referred to by the Adjudicating Officer in the impugned order but despite several opportunities given, he has produced neither of the required information.

4. We have heard the appellants at length and carefully considered the record. The factual position as it emerges is that the impugned-order has been, passed ex-parte without having the appellants' written reply to the show-cause notice on record or granting them personal hearing. Contents of the impugned order give the impression that some formula or production of cotton seed has been applied to determine its actual production but neither there is any detail about in the impugned order nor the Departmental Representative has been able to produce the same. The impugned order lacking necessary details and, thus, not being a speaking order, is not sustainable in the eyes of law. Besides, the impugned order has been passed ignoring the basic principles of natural justice by condemning the appellants unheard and. thus, in our view the case needs to be heard afresh at the original stage of adjudication.

5. For the aforesaid reasons, the impugned order is set aside and the case is remanded to the learned Adjudicating Officer for a fresh decision according to law after hearing the parties and receiving the evidence which they may like to produce.

C.M.A./658/Taz (Trib.) Case remanded.