ADDITIONAL COLLECTOR CENTRAL EXCISE AND SALES TAX VS MANGLA METALS (PVT.) LTD., 2018 PTD-SUPREME-COURT-AZAD-KASHMIR 1922 (2018)

(On appeal from the judgment of High Court dated 25.10.2017 in Civil Appeal No.15 of 2004)

Sales Tax Act (VII of 1990)---

----Ss. 31, 32, 47 & 37I---Powers of officers of Inland Revenue / sales tax department---Delegation of powers---Adjudication by officers of the Department---Adjudication by High Court under the Sales Tax Act, 1990 vis-a-vis delegation of powers under the Sales Tax Act. 1990---Scope---Officer(s) of the Sales Tax Department could exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to such officer(s) and in cases under the Sales Tax Act, 1990, High Court was to adjudicate the same with proper appreciation and interpretation of Ss. 31 & 32 of the Sales Tax Act, 1990.

Haji Muhammad Afzal, Advocate for Appellant.

Mian Sultan Mehmood, Advocate for Respondent.

Date of hearing: 25th April, 2018.

JUDGMENT

CH. MUHAMMAD IBRAHIM ZIA, C.J.---This appeal has arisen out of the judgment of the High Court dated 25.10.2017, whereby the appeal filed by the respondent, herein, has been accepted.

2.The relevant and necessary facts of the case are that the appellant, Additional Collector Central Excise and Sales Tax, Mirpur, issued a show-cause notice to the respondent on 07.08.2002 on the basis of letter dated 31.07.2002 addressed by Assistant Collector Central Excise and Sales Tax, Mirpur regarding tax period commencing from February to June, 2002 with the proposal to impose sales tax amounting to Rs.22,33,866/- upon the respondent-company which may increase to Rs.25,00,000/- to Rs.30,00 000/-. It is alleged that respondent-company rebutted all the allegations through representation filed on 12.09.2002 and prayed to drop the proceedings. The appellant through order dated 02.10.2002 imposed sales tax including Additional Tax and Penalty under section 33(2)(cc) of Sales Tax Act, 1990 amounting to Rs.22,47,871. Feeling aggrieved from the said order, the respondent-company filed an appeal before the Azad Jammu and Kashmir Sales Tax Appellate Tribunal, Muzaffarabad which was dismissed vide order dated 22.11.2003. The respondent-company filed an appeal before the High Court. The learned High Court accepted the appeal through the impugned judgment while quashing the orders dated 02.10.2002 and 22.11.2003 with the observation that the Deputy Collector, Central Excise and Sales Tax, Mirpur will be at liberty to initiate fresh proceeding, hence, this appeal.

3.Haji Muhammad Afzal, Advocate, the learned counsel for the appellant after narration of necessary facts submitted that the impugned judgment of the learned High Court is result of misconception of the facts and law. On merits, although there are important material propositions involved in the case which have also not been properly attended to and resolved by the High Court but the sole ground for acceptance of the appeal as incorporated in the impugned judgment is also against the statutory provisions of law. He submitted that while deciding the proposition of competency of Additional Collector Central Excise and Sales Tax in relation to the adjudication, the learned High Court has over sighted the cumulative appreciation of the relevant statutory provisions of law, especially, the provisions of sections 31 and 45 of the Sales Tax Act, 1990. According to the celebrated principle of law, the statutory provisions cannot be applied or interpreted in isolation while ignoring the other interconnected provisions. According to the scheme of law, the basic and controlling provision in relation to the powers of officers of sales tax is section 31 of Sales Tax Act which has been totally ignored by the learned High Court. He submitted that the controlling provisions of section 31 have expressly conferred that an officer of Sales Tax appointed under section 30 shall exercise such powers and discharge such duties as are conferred and imposed on him under this Act and it is specifically mentioned that he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon all or any officer subordinate to him. He submitted that the Deputy Collector is subordinate to the Additional Collector and the matter of adjudication falls within his competence, thus, according to the statutory provisions the powers of adjudication can validly be exercised by the Additional Collector or officer to whom the Deputy Collector is a subordinate. He submitted that the relevant statutory provisions have totally been neglected by the High Court and due to misconception, section 32 of Sales Tax Act has been unnecessarily referred to, whereas, in fact the relevant provision to be appreciated and interpreted is section 31. Therefore, the impugned judgment is not sustainable.

4.Conversely, Mian Sultan Mehmood, Advocate, the learned counsel for the respondent forcefully defended the impugned judgment and submitted that the arguments advanced on behalf of the appellant are misconceived. The learned High Court has rightly decided the appeal. The relevant statutory provision dealing with the subject-matter is section 45 of the Sales Tax Act which specifically confers adjudication powers upon the officers of Sales Tax, thus, the powers which are specifically conferred cannot be exercised by any other officer. As the adjudication order is without lawful authority, thus, the learned High Court has rightly referred the matter to the competent officer for initiating the adjudication process. This appeal has no substance and is liable to be dismissed.

5.We have heard the learned counsel for the parties and examined the record made available. The careful examination of the impugned judgment reveals that the learned High Court has decided the appeal on the main ground of competency of the Additional Collector to adjudicate. The learned High Court in the impugned discussed sections 32 and 45 of the Sales Tax Act, 1990 and while mainly relying upon section 45, the adjudication order has been declared without lawful authority. The provisions of section 31 of the Sales Tax Act have neither been considered nor interpreted. In our considered view, the provisions of section 31 of the Sales Tax Act are more relevant to the proposition involved in this case. No doubt under section 32 of the Sales Tax Act the Federal Board of Revenue has got authority of delegation of powers to the officers by notification in the official gazette, however, in this case the question of delegation of powers of Board of Revenue is not involved rather the simple proposition involved is whether the higher officer like Additional Collector can exercise the powers conferred upon its subordinates or not? In this context, 31 appears to be much relevant which reads as follows:--

"31. Powers.---An officer of sales tax appointed under section 30 shall exercise such powers and discharge such duties as are conferred or imposed on him under this Act; and he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him.

Provided that, notwithstanding anything contained in this Act or the rules, the Board may, by general or special order, imposed such limitations or conditions on the exercise of such powers and discharge of such duties as it deems fit."

Under these provisions without any condition it is expressly mentioned that an officer of Sales Tax can exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him. This legal proposition has neither been discussed by the High Court nor in this context any wisdom or opinion has been brought on record. Thus, in our opinion in view of facts and circumstances and legal proposition involved in this case the proper appreciation and interpretation of section 31 of Sales Tax Act is required and the impugned judgment is lacking it.

6.In this state of affairs, we are constrained to accept this appeal, set aside the impugned judgment and remand the appeal to the High Court for deciding the same after hearing the parties on all the propositions involved in the case, especially, regarding the cumulative appreciation of the statutory provisions of sections 31 and 45 of the Sales Tax Act, 1990. As the parties are facing the litigation since 2002, thus, the situation demands expeditious disposal of the appeal. It is desired to direct the High Court to decide the appeal within a period of three months from communication of this judgment.

With these observations this appeal stands disposed of with no order as to costs.

KMZ/23/SC(AJ&K) Order accordingly.