2010 PTD 456
MHER MUHAMMAD ARIF SARGANA, MEMBER (JUDICIAL).--- This appeal has been directed against Order-in-Original No.21 of 2002 dated 22-5-2002.
2. The facts, giving rise to this appeal, are that during audit of the appellant the following discrepancies were pointed out:-- a) Change/difference in the name of registered person. b) Inadmissible tax credit on over consumption of dyes and chemicals. c) Production/supply understated. d) Out of tax period tax adjustment. e) Inadmissible input tax adjusted on double invoiced. f) Less payment of sales tax from July, 1999 to December, 1999. g) Inadmissible input adjustment on electricity and sui gas bills. h) Sales tax not charged on disposal of empty drums and bags. i) Non compliance of section 73. j) Wrong filing. k) Late filing.
3. The respondents were therefore, charged with the contravention of provisions of Sales Tax Act, 1990 and they were called upon as to why sales tax amounting to Rs.73,88,489 may not be recovered from them along with additional tax and as to why penal action be not taken against them under section 33 ibid. As a consequence of adjudication proceedings, most of the charges were settled and some were established. Hence, this appeal has been filed by the department against the issues which were settled by the learned adjudicating officer.
4. The main grounds, as urged in the memo of appeal, are:---
(a) The registered person may only work under the name and style as declared on the registration application under section 15 of the Sales Tax Act, 1990, the name of the registered person Messrs New Nizami Dyeing, Faisalabad remained effective till January, 2002 but the other names were used WAPDA, Sui Gas and Income Tax Departments, which was a Violation of sections 20 and 23 of the Sales Tax Act, 1990.
(b) As a general trade practice in textile processing units claim 35 to 40% consumption of dyes and chemicals. Whereas in the instant case registered person claimed 44% consumption of dyes and chemicals which caused excessive input tax adjustment of Rs.7,09,873. The claim of the registered person that the double dyeing was carried out could not be proved through the record nor any amount is claimed against the double dyeing from customers. Hence it is beyond doubt that higher consumption was showed to claim higher inputs. The adjudication officer accepted the point of the registered person without any confirmation and documentary evidence.
(c) Monthly consumption of sui gas was not matching with the production as is evident from the audit observation No.3: However, no justification could be offered by the registered person but the adjudicating officer accepted the arguments without any statement of correlation factor.
(d) At the time of audit during October, 2001 the registered person had no proof of adjustment which was obtained 3-5-2002 i.e. after the completion of audit. The adjudicating officer did not invoke the provision of section 33(7) of the Sales Tax Act, 1990.
(e) The objection was settled.
(f) The adjudicating officer did not examine the conditions of S.R.O. 392(I)/2001 dated 18-6-2001. He should pass speaking order if the registered person fulfils the conditions and entitled for relief of S.R.O. 392(I)/2001. Hence, by ignoring the facts, the benefit is passed on to the registered person unlawfully and demand of Rs.22,43,352 was dropped without any merit.
(g) To claim input tax adjustment against utility bills two conditions were mandatory.
(i) The connection should be in the name of the consumer or in the name of the landlord.
(ii) The registration number is printed on the bill.
The registered person violated the provisions of S.R.O.124(I)/2000 but the benefit is passed on without any merit. Further no amendment has been made in the collection and payment of sales tax on Natural Gas Rules, 1999 notified vide S.R.O.1040(I)/99 dated 14-9-1999. However, benefit was passed on to the registered person illegally.
(h) The objection was settled.
(i) No reconciliation was under section 73 of the Sales Tax Act, 1990 was provided at the time of audit. However, some cheques were presented at the time of adjudication but no fair opportunities were provided to the audit team to. confirm the same through bank sources.
5. Arguments were heard. The learned Senior Auditor argued on the lines of submissions made in the memo of appeal. He reiterated all the grounds one by one, as urged in the memo of appeal.
6. The learned counsel for the respondent, at the very outset, has raised objection about the maintainability of the appeal on the ground that the person signing the appeal (Assistant Collector) was not competent to file the same and in the absence of any proper authorization, the appeal as such was not tenable. In this regard the learned counsel for the respondent has referred to a judgment of this Tribunal passed in S.T.A. No.182/LB of 2003 and Sales Tax Appeal No. L-686 of 2004, wherein the appeals filed by incompetent persons were rejected.
7. I have carefully gone through the arguments advanced by both the sides and perused the available record. The appeal is not tenable. It has been argued on behalf of' the appellant that the appearance of the Sales Tax Officer has been prescribed under section 31 of the Sales Tax Act, 1990. Similarly, delegation of powers has been granted under section 32 ibid. Subsection (2) of section 32 ibid provides that "Unless the Board in any case otherwise directs, the Collector may authorize any officer subordinate to him to exercise within any specified area, any of the powers of the Collector or of any other officer of Sales Tax under this Act". But no authorization or general delegation of powers giving the specific authorization to file the appeals has been given to the Assistant Collector in the absence of which, it shall be safe to presume that the Assistant Collector has not been delegated the powers of filing the appeals before the Tribunal.
8. In view of the above, I am of the considered view that the Assistant Collector at the relevant time was not competent to file the appeal on behalf of the Sales Tax Department. Therefore, the instant appeal is held to be filed by un-authorized person and not maintainable within the provisions of section 46 of the Sales Tax Act, 1990 as it stood at the relevant time. The appeal is, therefore, rejected.
C.M.A./180/Tax(Trib) Appeal rejected.