2010 PTD 451

MIAN MUHAMMAD HANIF TAHIR, (MEMBER JUDICIAL). ---This appeal is directed by the Sales Tax Department under section 46 of the Sales Tax Act, 1990 against Order-in-Appeal No.352/2007 dated 29-9-2007 passed by the learned Collector (Appeals), Faisalabad, whereby he accepted the appeal of respondents (then appellants) by setting aside the order of Assistant Collector Sales Tax (Refund), Faisalabad.

2. The facts, giving rise to this appeal are that a show-cause notice was issued on 13-10-2006 that during scrutiny of refund claim for May, 2005, it was observed that Messrs Ihsan Yousaf Textile (Pvt.) Ltd. has claimed refund of imput tax against invoices of Messrs D.S. International Pvt. Ltd. which has not filed sales tax return for period in question as indicated by STARR Computer System therefore, respondents are not entitled for refund of input tax. The adjudication proceedings culminated in passing of an Order-in-Original No. 611 of 2006 dated 30-12-2006, rejecting the refund amounting to Rs.87,354 on the charge of abnormal tax profile. Being aggrieved by these proceedings, Messrs Ihsan Yousaf Textiles (hereinafter "the respondent") filed the first appeal and the learned Collector of Appeals accepted the appeal on the ground that the impugned adjudication order on the charge of abnormal tax profile is beyond scope and contents of impugned show-cause notice, hence, this further appeal by the sales tax department.

3. Arguments were heard. The appellant-department urged on the lines of submissions made in their memo of appeal whereas Mr. Khubaib Ahmad, Advocate appearing on behalf of respondent assailed that the impugned adjudication order is illegal and unjustified as the adjudicating authority has travelled beyond the show-cause notice and also referred various judgments of superior Courts in their support.

4. I have thoroughly examined the case record and have carefully considered written as well as oral arguments made by both the sides and have come to the following conclusion.

5. I find that the charge of non-filer against invoices of Messrs D.S. International Pvt. Ltd was levelled in the impugned show-cause notice however, impugned adjudication order provides for rejection of refund on the charge of abnormal tax profile hence; rejection of refund is beyond scope, stance and contents of impugned show-cause notice. No such charge as adjudged in impugned adjudication order was primarily levelled in show-cause notice which renders it null and void in eye of law. It is trite law that a charge which was not framed in show-cause notice cannot be adjudged through an adjudication order. I am also fortified in my views on the basis of settled law by the Honourable Supreme Court of Pakistan in case of Collector Central Excise and Land Customs v. Rahim Din reported as 1987 SCMR 1844, wherein it was laid down. "The order of adjudication being ultimately passed on a ground which was not mentioned in the show-cause notice was palpably illegal and void on the face of it" relying thereon, the Division Bench of the Appellate Tribunal (Bench-II), Lahore has also vacated a case of Messrs Aftab Industries Oil Mills, Kehror Pacca v. The Collector Sales Tax Multan reported as GST 2002 CL 210 on same cause of action. This verdict of Honourable Supreme Court of Pakistan has also been followed by a Division Bench of the Honourable Sindh High Court, Karachi in case of Messrs Excide Pakistan v. The Deputy Collector reported as 2004 PTD 1449. The dictum laid down by the Customs, Excise and Sales Tax Appellate Tribunal (Bench-III), Karachi in case of Messrs B.P. Industries, Karachi v. The Additional Collector of Customs, Sales Tax and Central Excise Adjudication and another reported as 2008 PTD (Trib.) 36 is also attracted in circumstances of the instant case that; "One cannot go beyond the allegations mentioned in the show-cause notice".

6. In view of what has been stated above, the order passed by the Collector (Appeals), Faisalabad do not suffer from any legal infirmity and the same is upheld and the appeal filed by the sales tax department being devoid of any merits is rejected.

Parties be informed through registered post TCS or by UMS.

C.M.A./181/Tax(Trib.) Appeal rejected.