COMMISSIONER INLAND REVENUE, ZONE-I, FAISALABAD VS MAGNA TEXTILE INDUSTRIES PRIVATE LIMITED, FAISALABAD
2019 P T D 594
[Lahore High Court]
Before Shahid Jamil Khan and Asim Hafeez, JJ
COMMISSIONER INLAND REVENUE, ZONE-I, FAISALABAD
Versus
Messrs MAGNA TEXTILE INDUSTRIES PRIVATE LIMITED, FAISALABAD
S.T.R. No.106 of 2015, decided on 04/12/2018.
(a) Sales Tax Act (VII of 1990)---
----S. 45A---Exercise of powers under S.45A(4) of the Sales Tax Act, 1990---Powers of the Commissioner to suo motu call for record of any legal proceedings under Sales Tax Act, 1990---Delegation of revisional jurisdiction by the Commissioner---Scope----Delegation of jurisdiction conferred under S.45A(4) of the Sales Tax Act, 1990---Scope---No power or authority under S.45A of the Sales Tax Act, 1990 existed whereby the Commissioner could further delegate revisional jurisdiction under S.45A of the Sales Tax Act, 1990 unto any person including to a subordinate officer----Any direction by the Commissioner to a subordinate officer to proceed to adjudicate under S.45A of the Sales Tax Act, 1990 would suffer from a jurisdictional defect.
(b) Maxim---
----"Delegatus non potest delegare"----Application----In absence of any power or authority to further delegate any revisional or supervisory jurisdiction, such jurisdiction had to be exclusively exercised while adhering to the principles encapsulated in the maxim delegatus non-potest delegare.
Saba Saeed Sheikh for Applicant.
Khubaib Ahmad for Respondent.
ORDER
Through this reference application, department impugns order dated 16.01.2015 by the leaned Appellate Tribunal Inland Revenue, Lahore ("Appellate Tribunal") whereby the appeal filed by registered person was accepted.
2.As apparent from the application, following questions of law, statedly arisen out of the Appellate Tribunal's order, are proposed for our opinion, which are reproduced hereunder;
(a)"Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in holding that the order was reopened under section 45A(4) of the Sales Tax Act, 1990 without examining the legality and propriety of the Order?
(b)Whether on the facts and in the circumstances of the case, the learned Tribunal was justified in holding that the Commissioner cannot delegate the power of fresh adjudication to the subordinate officer after reopening the Order-in-Original under section 45A(4) of the Sales Tax Act, 1990?"
3.It transpired that determination of the questions proposed hinges on the interpretation of Subsection (4) of Section 45A of the Sales Tax Act, 1990 ("Act of 1990"). It appeared from the record, that Commissioner Inland Revenue in exercise of powers under subsection (4) of Section 45A ibid, proceeded to reopen the order-in-original dated 10.11.2013 - passed by the learned DCIR (E&C Unit-2, Zone-1 in favour of the registered person in earlier round of litigation - and thereafter directed the Deputy Commissioner Inland Revenue to proceed further in accordance with the provisions of law and pass speaking orders to incorporate all the aspects / facts of the case, after affording an opportunity of hearing, which order dated 11.12.2014 was challenged before the Tribunal through appeal by the registered person. The appeal was accepted, hence, this reference application by the department.
4.At the outset, learned counsel for the applicant department was confronted to satisfy us that whether Commissioner could further delegate such powers - as made available under subsection (4) of Section 45A of Act of 1990 to determine the legality or propriety of any decision/order - to a subordinate officer(s). The learned counsel could not reply satisfactorily.
5.We have reviewed the questions of law proposed and consider it appropriate to re-settle the same, re-settled questions of law read as;
I)Whether in the facts and circumstances of the case, the Commissioner Inland Revenue in exercise of powers under sub-section (4) of Section 45A of Sales Tax Act, 1990, is competent to delegate or refer the matter for adjudication afresh to any subordinate officer(s)?
II)Whether the expression "pass such order as he may deem fit" can be construed to include the order to refer the matter for adjudication afresh to any subordinate officer(s)?
6.Before proceeding to adjudicate upon the issue, it is expedient to reproduce subsection (4) of Section 45A of Act of 1990, which reads as:-
45A. Power of the Board [and Commissioner] to call for records---(1) The Board may, of its own motion, or otherwise, call for and examine the record of any departmental proceedings under this Act or the rules made thereunder for the purpose of satisfying itself as to the legality or propriety of any decision or order passed therein by an Officer of [Inland Revenue], it may pass such order as it may think fit:
Provided that no order imposing or enhancing any penalty or fine requiring payment of a greater amount of sales tax than the originally levied shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.
(2)....
(3)...
[(4) The Commissioner may, suo motu, call for and examine the record of any proceeding under this Act or the rules made thereunder for the purpose of satisfying himself as to the legality or propriety of any decision or order passed by an officer of Inland Revenue subordinate to him, and pass such order as he may deem fit.
[Emphasis supplied]
7.The expression 'Commissioner' is defined in section 2(5) of the Act of 1990 whose appointment was made in terms of section 30 of the Act of 1990. It is evident that revisional jurisdiction conferred under subsection (4) of section 45A of the Act of 1990 is intended to be exercised by the Commissioner - to be exercised by him upon finding any illegality or impropriety in any decision or order. A bare perusal of subsection (4) of section 45A of the Act of 1990 would amply establish that no power or authority has been extended to the Commissioner to further delegate such revisional jurisdiction unto any other person, let alone to any subordinate officer. In the absence of any such power or authority to delegate, the direction by the Commissioner through order dated 11.12.2014 to officer subordinate to proceed to determine/ adjudicate, suffers from jurisdictional defect, hence, of no legal effect. The expression 'satisfying himself' is crucial and reinforces the spirit of exclusivity of the jurisdiction conferred. It appears that where the legislature has intended to extend authority or power to delegate, it has allowed such delegation under section 32 of the Act of 1990. The Tribunal has rightly observed that reference of matter to any subordinate officer for the purposes of passing any order or decision would upset and offend hierarchy of adjudicatory process, provided under the Act of 1990. A reference to paragraph 9 of the order is apt, which reads as;
"Notwithstanding above, if the provisions of section 45A of the Act are perused, the above view and interpretation arrived at by us, is further justified because under section 46 of the Act, an appeal has been provided before the Appellate Tribunal against an order passed by the Board or Commissioner Inland Revenue under section 45A of the Act. This clearly shows that if an order is re-opened under section 45A of the Act, then, it is the Commissioner who has to pass the order by himself after re-opening which could further be assailed before the Appellate Tribunal. What has happened in the instant case is that the Commissioner after re-opening of the case, has sent it back to the Deputy Commissioner whose order is not an order within the contemplation of section 45A of the Act and is therefore not appealable as such before the Appellate Tribunal rather it has to be appealable before the CIR(A) under section 45B of the Act".
8.In the circumstances, it is clear that jurisdiction conferred under subsection (4) of section 45A of the Act of 1990 is conferred upon the Commissioner, exclusively, and such jurisdiction has to be discharged by the said person and not by any other person, subject to such conditions and limitations prescribed. In the absence of any power or authority to further delegate, revisional/supervisory jurisdiction, such jurisdiction has to be exclusively exercised, while adhering to the principle encapsulated in legal maxim, i.e. "delegatus non-potest delegate".
9.In view of the above, our response to first question is in negative, declaring that the Commissioner cannot delegate the powers/ authority conferred, meant to be exclusively exercised by the Commissioner in terms of subsection (4) of section 45A of the Act of 1990. The order dated 11.12.2014, whereby the Commissioner after re-opening of the matter directed the subordinate officer to adjudicate, has been rightly set-aside by the Tribunal and call for no interference.
10.It is evident from the bare reading of subsection (4) of section 45A of the Act of 1990 that the Commissioner alone has the power to exercise suo motu or revisional/supervisory jurisdiction, which jurisdiction cannot be shared or delegated to any subordinate officer. The expression "pass such order as he may deem fit" cannot be interpreted to imply that Commissioner in exercise of the discretion given - can pass any order, including the order to refer or remand the matter to any of its subordinate officer for adjudication/determination, which construction, if employed, would offend the legislative intent and tend to extend the scope of statutory discretion even beyond the mandate of subsection (4) of section 45A of the Act of 1990. The discretion extended to the Commissioner has to be exercised and applied while adhering the conditions and limitations prescribed. Our response to the second question is in negative as well.
11.In these circumstances, the order passed by the Tribunal does not suffer from any legal infirmity, error in law or misapplication of any provision of enactment and therefore, there is no occasion to interfere therein.
12.The reference application is disposed of in terms of opinion expressed with respect to resettled questions of law.
13.Office shall send a copy of this order under seal of the Court to the Appellate Tribunal as per Section 47(5) of the Sales Tax Act, 1990.
KMZ/C-1/LOrder accordingly.