2010 PTD 1681

MIAN MUHAMMAD HANIF TAHIR, MEMBER JUDICIAL.-- This Sales Tax Appeal is directed against Order-in-Appeals .Nos.248-249/2008 dated 29-2-2008 passed by the Collector of Customs, Sales Tax and Federal Excise (Appeals), Faisalabad.

2. Brief facts giving rise to the filing of the present appeal are that during the scrutiny of refund claim for the period 6/2005, filed by the appellant was deferred due to the reasons of invoice summary not submitted, zero rated sector invoice, de-registration of the units, abnormal tax profile, computer data not available and MR No. mismatched etc. Based on the aforesaid irregularities and omissions, the appellants were charged. with the violation of sections 4, 7, 8(1), 8A, 10 and 26 of the Sales Tax Act, 1990 read with section 2(14) and Refund Rules. 2006 notified vide S.R.O. 555(I)/2006 dated 5-6-2006 and were called upon to show cause under sections 10(4) and 11(2) ibid as to why input tax/refund amounting to Rs.11963679 may not be rejected under the aforesaid provisions of law. The adjudication proceedings culminated in the passing of an Order-in-Original No.179/2007 dated 22-2-007. Against the said order-in-original, the appellants filed the appeal before the Collector (Appeals), who rejected the appeal on the point of limitation. Feeling aggrieved by the aforesaid order-in-appeal, the appellants filed the present appeal before this Tribunal.

3. The learned counsel for the appellants argued that the point of limitation was discussed at length and the same was verbally condoned by the learned Collector (Appeals) who thereafter accorded several opportunities of hearings and all other issues raised in the memo of appeal were discussed and the related documents were provided but the same were not considered by the learned Collector (Appeals) and he rejected the appeal only on the point of limitation. He argued that no time limitation runs against a void order as the refund of sales tax for the period in question was rejected under Standing Order No.3/2006 dated 2nd November, 2006 for want of attestation/verification of supportive documents submitted under the Sales Tax Refund Rules, 2005. The appellants provided all the relevant documents but the same were not considered by the respondent-department and in this respect he relied upon a judgment of Hon'ble Sindh High Court reported as 2006 PTD 1412 in case of "M/s Chenab Fabrics and Processing Mills Ltd. Faisalabad v. Government of Pakistan and 5 others" in which it has been laid down that the substantive rights of the citizens should not be crucified on the altar of some procedural administrative instructions, if otherwise the requirements of a beneficial legislation or notifications issued there-under are fulfilled concession/exemption cannot be withheld on the ground of administrative instructions". In the light of the said judgment, it is crystal clear that the impugned order is bad, void and illegal, therefore, no limitation would run against it as held by the Hon'ble Supreme Court of Pakistan in case of "M/s Ali Muhammad and others v. Chief Settlement Commissioner and others" reported as 2001 SCMR 1822, wherein it has been held that "no period of limitation would run against a void order" In support of his contention he also referred 2002 PTD 87; 2007 PTD 1458; PLD 1998 SC 64 and 2005 SCMR 492 and GST 2003 CL 601. He also referred to a judgment reported as 2002 PTD 549, in which it was stated that "in the revenue matters, the prayer for condonation by an assessee/citizen should all the more be considered sympathetically." Lastly he argued that the STARR system was introduced by the department in July, 2005 but the matter of the appellants pertains to the period July, June, 2005, therefore, it has no nexuses with the present case. The learned counsel for the appellant has produced before the court all the related documents for perusal.

4. On the other hand the learned departmental representative argued that the STARR system indicated that refund of the tax for which refund is being claimed, the tax has not been properly deposited by the appellants and the appellants have failed to produce any valid evidence/ documentary proof against STARRS objections on the invoices of the suppliers and they have also failed to prove that the goods in question were physically received and the same were consumed for the supply of zero rated, therefore, the refund claimed by them is not admissible under the relevant provisions of law.

5. I have heard the learned counsel for the appellant and the departmental representative and perused the record available on the file. The first point involved in this appeal is a limitation as the learned Collector (Appeals) Faisalabad, rejected the appeal on the ground of limitation. In this regard the contention of the learned counsel for the appellant is that no time limitation runs against a void order as the refund claim of the appellants was rejected under Standing Order No.3/06 dated 2nd November, 2006 for want of attestation/verification of supportive documents submitted under the Sales Tax Refund Rules, 2005. During the adjudication proceedings he claimed that all the supportive documents as required under the law were submitted to the adjudicating authority but the same were not considered by it. He rightly relied on a judgment reported as 2006 PTD 1412, claiming that only on executive instructions, the substantive rights of the citizens should not be crucified. If the refund is admissible and the appellants have submitted all the authentic documents before the concerned authority, then the rejection of refund on time limitation is against the justice. The learned Collector (Appeals) Faisalabad in case of M/s Grip Master International, Faisalabad and others vide his order-in-appeal dated 30-4-2008 where point of limitation was also involved sanctioned the refund on the ground that if the appellants were fulfilled the provisions of Sales Tax Act, 1990 and the relevant refund rules, the denial of refund would also be a violation of the Constitution and on the other hand on the same point he rejected the refund claim of the present appellants which is a discriminatory attitude of the appellate authority, as all the citizens are equal under the Constitution of Islamic Republic of Pakistan. From the perusal of the case law, which was relied upon by the learned counsel for the appellants and referred to in his arguments, I am of the considered opinion that the impugned order is a void and illegal order, therefore, the point of limitation does not arise. The learned counsel for the appellants also produced Sales Tax Return-cum-payment challans, Sales Tax Invoice, copies of supply register, de-registration of different units, verification of Bills of Entry, statement of purchase and payment of yarn and payments proof through banking channel.

6. For the foregoing reasons, the impugned order is set aside and the case is remanded to the adjudicating authority to reprocess and re-examine the refund claim in the light of the discussions made above and on the basis of the documents and records available with the appellants within a period of one month from the date of receipt of this judgment after affording an opportunity of hearing to both the parties, Parties be informed through post or by UMS.

7. This order shall also apply to the Sales Tax Appeal No.578/LB/2008, filed by the same appellants having identical points of law and facts.

C.M.A./49/Tax(Trib.) Order accordingly.