2008 PTD 1966

ABDUS SALAM KHAWAR, CHAIRMAN/MEMBER (JUDICIAL).--- This appeal is directed against Order-in-Appeal No.40-41-2007 dated 26-12-2006 (dispatched on 28-2-2007) passed by the learned Collector (Appeals), Collectorate of Customs, Sales Tax, Federal Excise, Custom House, Lahore.

2. Briefly the matter in controversy is that a team of DRRA audited the sales tax record of Messrs Colony Textile Mills, Ltd, Islamabad, Multan for the period 2002-2003 (October, 2002 to September 2003) and observed that the appellant had short paid sales tax amounting to Rs.63,34,685 and further tax of Rs.1,89,897 due to the excess adjustment of input tax/G.S.T. on electricity bills on the electricity used both in the mill and also in the residential colony of the mills employees. The appellant was charged for alleged contravention of the provisions of sections 2 (9), (33), (41), (43),(46), 3(1A),6, 7(1)(2)(i), 8(1)(a), 11(2), 23(1), 26,33(2)(cc), 34(1), 36(1) (Deliberate Act), 48 S.R.O. 578(I)/98 dated 12-6-1998 and section 73 of the Sales Tax Act, 1990. The matter was reported for adjudication in consequence of the adjudication the appellants were directed to pay sales tax amounting to Rs.65,24,582 under section 36(1) of the Sales Tax Act, 1990 along with additional tax under section 34 ibid. Furthermore, a penalty equal to 3% of the amount involved was also imposed on the appellants under section 33(2)(cc) of the Sales Tax Act, 1990. Aggrieved of the same, the appeal was preferred by the appellant which was instituted before the Collector (Appeals), Lahore. Vide the impugned order, the appeal was disposed of by the Collector (Appeals) with the observations and direction that the appellant should approach the right forum namely the Appellate Tribunal, and file the appeal there as clearly mentioned in the impugned order-in-original of the Collector (Adjudication). It was furthermore held that, that forum could not interfere and will not take upon itself the rectification of mistake committed by the appellant in the case. This order was also made applicable to the other appeal being of identical nature Details of which is as follows:--

Name of appellants

Appeal file No.

Against O-in-O No.& date

Amount of tax involved

Penalty

Messrs Hassan Woolen Mills, Water Works Road, Multan.

115-App/MNT/ ST/05

1043/2005 dated 30-6-2005

Rs.11643852

3% of the Amount of tax involved.

3. The learned counsel for the appellant has submitted that the appeal was maintainable before the Collector (Appeals) and it has wrongly and illegally been disposed of with the direction to file the appeal before the Appellate Tribunal. It is submitted that admittedly while passing the order-in-original, the Collector (Adjudication) Customs, Sales Tax and Central Excise, Multan had directed to file the appeal under section 46 of the Sales Tax Act, 1990 before the Tribunal. It is maintained that after 30-6-2005 by virtue of operation of law, the provision had undergone a change and another forum for appeal was created as Collector (Appeals). As the law had undergone a change, the appeal was maintainable before the learned Collector (Appeals) and the law in this context was not appreciated properly by the learned Collector (Appeals). Holding that the appeal was not maintainable before him.

4. As per amendment in the Sales Tax Act, 1990 section. 45-B effective from 1-7-2005, the appeal against order passed by any officer of Sales Tax was to be preferred before the Collector (Appeals).

The relevant provisions reads as follows:-

"45-B, Appeals . --(1) Any person, other than the Sales Tax Department, aggrieved by any decision or order passed under section 10,11,36,45 or 66, by any officer of Sales Tax may, within thirty days of the date of receipt of such decision or order, prefer appeal to the Collector of Sales Tax (Appeals)."

5. That being so, we are of the view that the appeal was very much competent before the learned Collector (Appeals) and the law in this context has not been properly appreciated by the Collector (Appeals). Our learned brothers in Bench-I, Lahore have also the same view as held by them in Appeal No.288/2007 (Pharianwala Sugar Mills v. Collector of Sales Tax Faisalabad).

6. For the foregoing reasons, we hold that the appeal against the Order-in-Original passed by the learned Collector (Adjudication) is maintainable before the Collector (Appeals).

7. The appeal be returned to the appellant to present it before the concerned Collector (Appeals) within 30 days of the receipt of this order. This order shall also apply to the following case as the facts and circumstances of this case are also the same:--

Sr. No.

Appeal No.

Name of the Parties

No. and date of the order-in-appeal.

1.

174/LB/2007

Messrs Hassan Woolen Mills, Water Works Road, Multan.

40-41/ST/2007 dated 28-2-2007.

C.M.A./92/Tax(Trib.) Order accordingly.