COMMISSIONER OF INCOME TAX VS MULTAN FABRICS (PVT.) LTD., 2013 PTD-LAHORE-HIGH-COURT-LAHORE 2077 (2013)

(a) Sales Tax Act (VII of 1990)---

----S. 47---Reference to High Court---Scope---Factual findings of Appellate Authority upheld by Appellate Tribunal---Validity---Jurisdiction of High Court being advisory in nature could be invoked regarding question of law only---High Court could not re-appriase and re-assess such findings, thus, would decline to answer question referred regarding thereto---Illustration.

(b) Sales Tax Act (VII of 1990)---

----S. 47---Reference to High Court---Jurisdiction---Scope.

The advisory jurisdiction of High Court is clearly distinguishable from its appellate or revisional jurisdiction.

Jurisdiction of High Court is advisory in nature and can only be invoked to resolve problematic and debatable questions of law instead of getting a decision for or against a party.Question of fact cannot be entertained and examined by High Court in its reference jurisdiction, unless there is perversity in the findings of fact. Only a question of law, if duly raised and ruled upon by the Tribunal can be said to have arisen out of order of Tribunal. Every question of law must not be referred to High Court and only those questions of law having some substance in it should be referred. Jurisdiction of High Court can only be invoked when the issues raised before and decided by Tribunal were of substantial nature and of general application to sizeable class of assessees. When the question framed is not of general application and revolves around the fact of that particular case and that particular assessee in that very assessment year, no substantial question can be said to have arisen.

The Lungla (Sylhet) Tea Co. Ltd. Syhet v. Commissioner of Income Tax Dacca, Circle Dacca 1970 SCMR 872; Revenue Legal Division Bahawalpur v. Zulfiqar Ali 2012 PTD 964; Pakistan Steel Mills Corporation (Pvt.) Ltd. Karachi v. Commissioner Inland Revenue 2012 PTD 723; Commissioner of Income Tax Wealth Tax Multan v. Muhammad Rafi Medical Officer DHQ Khanewal 2007 PTD 333 and Commissioner of Income Tax Wealth Tax Companies Zone-III, Lahore v. Messrs Hafiz Abdul Wahid and Brothers (Pvt.) Ltd., Lahore 2003 PTD 2846 fol.

Syed Khalid Javed Bukhari for Petitioner.

Sh. Zafar-ul-Islam and Niaz Ahmad Khan for Respondents.

Date of hearing: 23rd May, 2013.

JUDGMENT

ABID AZIZ SHEIKH, J.---This Reference has been filed under section47oftheSalesTaxAct, 1990againstthejudgmentdated25-2-2009 passed by the Appellate Tribunal Customs Sales Tax and Federal Excise, Lahore whereby the appeal of the petitioner-department was dismissed.

2.The learned counsel for the petitioner only raised the following question of law:--

"Whether the respondent No.1 was not required to provide the record regarding purchase, movement of goods, payment proof of their alleged suppliers to check the admissibility of refund as required under sections 22, 25 and 73 of the Sales Tax Act, 1990."

3.It is argued that during the post refund audit from September, 2002 to December, 2004 it was observed that MessrsMultan Fabrics (Pvt.) Ltd. got refund of Rs.2,940,801 on the basis of fake and bogus invoices issued by the suspected and black listed units. The Additional Collector vide order in Original No.471 of 2007 dated 21-8-2007 directed the respondents to pay the sales tax involved along with additional tax and penalty. In appeal the order of the Additional CollectorwasmodifiedvideOrder-in-AppealNo.612 of 2008dated2-4-2008 and it was held that the respondents are entitled to claim the refund of sales tax on the basis of sales tax invoices issued by the supplier. The aforesaid order of the Collector (Appeals) was upheld by the Tribunal.

4.It is argued that the Collector (Appeals) allowed refund on the basis of sales tax invoices issued by the supplier namely, MessrsFraz Enterprises and Lucky Traders whereas the Tribunal allowed refund on the basis of sales tax invoices issued by Messrs Waqar Enterprises, MessrsFraz Traders and Lucky Star Text against which no finding was given by the Collector (Appeals). Submits that in any case such finding could not be given without allowing the department an opportunity to check the admissibility of refund regarding the aforesaid suppliers. Further argued that no factual finding was given by the Appellate Tribunal regarding the aforesaid suppliers.

5.We have perused the order dated 2-4-2008 passed by the Collector (Appeals)wherethequestionofentitlementofclaimofrefund of sales tax on the basis of sales tax invoices issued by MessrsWaqar Enterprises, Fraz Traders and Lucky Star Text has been discussed and was held that orders of black listing of supplier are not applicable to the period of purchase involved in this case and further held that requirement of section 73 of the Sales Tax Act, 1990 has been fulfilled by the respondents. The aforesaid factual finding of the Collector (Appeals) has been upheld by the Tribunal in its impugned order dated 25-2-2009. This factual finding cannot be re-appraised and re-assessed by this Court under section 47 of STA, 1990, in this reference as the jurisdictionofthisCourt under section 47 of the Sales Tax Act,1990is advisory in nature and can only be invoked regarding questions oflaw.

6.The advisory jurisdiction of this Court is clearly distinguishable from its appellate or the revisional jurisdiction. It is expedient to reproduce hereunder the scope of jurisdiction and meaning of the term question of law raised for this Court's advice:--

In The Lungla (Sylhet) Tea Co. Ltd. Syhet v. Commissioner of Income Tax Dacca, Circle Dacca (1970 SCMR 872) that:--

"It may be pointed out that it is not every question of law that must be referred to the High Court. There must be some substance in it."

In Revenue Legal Division Bahawalpur v. Zulfiqar Ali (2012 PTD 964) that:-

"It is pertinent to mention that jurisdiction of this Court in terms of section 133(4) of the Ordinance ibid is of advisory nature clearly distinct and distinguishable from its appellate or revisional jurisdiction. The purpose of reference therefore should be only to resolve problematic and debatable legal question instead to get a decision for or against a party."

In Pakistan Steel Mills Corporation (Pvt.) Ltd. Karachi v. Commissioner Inland Revenue (2012 PTD 723) that:--

"Wemayobservethatincaseofanyerrorinthefindingoffacts by the Tribunal the only course available to the applicant is to seek rectification of such error by moving appropriateapplicationinaccordancewithlaw,whichhasnotbeendoneintheinstantcase.Moreover,questionoffact cannot be examined by this Court in its reference jurisdiction."

In the aforesaid judgment it was also observed that:--

"finding of facts, unless proven to be perverse, cannot be disturbed by this Court in reference jurisdiction."

In the case of Commissioner of Income Tax Wealth Tax Multan v. Muhammad Rafi Medical Officer DHQ Khanewal (2007 PTD 333) that:-

"Without an iota of doubt this jurisdiction is advisory in nature and is required to be invoked only when the issues raised before and decided by the Tribunal were of substantial nature and of general application to a sizeable class of assessees. The nature of jurisdiction of this Court is clearly distinguishable from its appellate or the revisional jurisdiction."

In Commissioner of Income Tax Wealth Tax Companies Zone III, Lahore v. MessrsHafiz Abdul Wahid and Brothers (Pvt.) Ltd. Lahore (2003 PTD 2846) that:--

"It is established law that a question of law can be said to have arisen out of an order of the Tribunal only if it was duly raised and ruled upon before the Tribunal."

"The purpose of reference is not to get a decision for or against a party before the Tribunal. It is only the resolution of a problematic or debatable legal question. In re: C.I.T. v. Basanta Kumar Agarwalla (1983) 140 ITR 418, their Lordship expressed the views that A point of law" could not be equated with the expression "question of law" and that the question referred must be a disputed or disputable question of law. Further that the object of a reference was to get a decision from the High Court on a problematic or debatable question and not an obvious or simple point of law."

7.In view of the law established in the aforesaid judgments, the scope of the reference is as follows:--

(1)JurisdictionofthisCourtisadvisoryinnatureandcouldonlybeinvokedtoresolveproblematicanddebatablequestions of law instead of getting a decision for or against a party.

(2)Question of fact cannot be examined by this Court in its reference jurisdiction unless there is perversity in the finding of facts.

(3)Only a question of law if duly raised before and ruled upon by the Tribunal could be said to have arisen out of order of Tribunal.

(4)Every question of law must not be referred to High Court and only those questions of law having some substance in it should be referred.

(5)JurisdictionofthisCourtcanonlybe invokedwhentheissues raised before and decided by Tribunal were of substantialnatureandofgeneralapplicationtosizeableclassofassessee.

(6)When the question framed is not of general application and revolves around the fact of that particular case and that particular-assessee in that very assessment year, no substantial question can be said to have arisen.

8.The above question as framed in this reference in our view is neither of law nor has raised a substantial legal controversy between the parties. Therefore, as observed above, we decline to entertain and answer the same.

9.Answer declined.

10.Office shall send a copy of this judgment under the seal of the Court to the learned Appellate Tribunal Inland Revenue as per section 47(5) of the Sales Tax Act, 1990.

SAK/A-108/LAnswer declined.