ORDER SHEET

IN THE HIGH COURT OF SINDH, KARACHI

 

Spl. STRA No.282 of 2007.

 

BEFORE:

 

            Mr. Justice Gulzar Ahmed, and

            Mr. Justice Irfan Saadat Khan

 

 

Date of hearing:            12.01.2010.

 

Applicant, the Collector of Customs, through Mr. Mohsin Imam, advocate.

 

Respondent No.1, Tharparkar Sugar Mills, through Dr. Farogh Naseem, advocate.

 

Nemo for Respondent No.2.

 

 

ORDER

 

IRFAN SAADAT KHAN, J:-  Through the instant Reference Application (R.A) the applicant, Collector of Customs, has referred the following questions of law for determination by this Court:

 

".1       Whether the learned Appellate Tribunal have [has] misunderstood the words "sales tax department" appearing in clause (1) of section 46 of the Sales Tax Act, 1990 as to mean the "Head of the department" (i.e. Collector) or it can be construed as any officer of the sales tax department working under the Collector, as per SRO.1160(1)/96 dated 06.10.1996.

 

2.         Whether the Appellate Tribunal has erred in holding that the appeal before the Tribunal was filed invalidly by non-competent Officer despite the fact that the contents of section 46 of the Sales Tax Act, 1990 are silent in this  behalf.

 

3.         Whether the Appellate Tribunal has misconstrued/ misunderstood the spirit of the section 46 particularly sub-section (5) of section 46 under which the words "concerned sales tax officer" is [are] mentioned."

 

 

2.         Dr. Farogh Naseem, learned counsel for the respondent, stated that the Sales Tax Appellate Tribunal (STAT) has correctly decided the case by holding that the appeal was filed by a non competent person namely the Superintendent of the Sales Tax Department.  He has in this regard relied on the cases of (i) Director, Directorate General of Intelligence and Investigation and others v. Al- Faiz Industries (Pvt) Limited and others (2006 SCMR 129), (ii) Assistant Collector, Customs and Central Excise v. Pakistan Petroleum Ltd. (2005 PTD 2539), (iii) Muhammad Rashid Bhatti v. KDA and another (PLD 1986 Kar. 130) (iv) Punjab Province v. Malik Shahbaz Khan (NLR 1980 Civil (Lah) 192), (v) Director, Directorate General of Investigation (Customs & Excise) Karachi Vs. Tessori Trading Co. Pvt. Ltd. (2005 PTD 1957).

 

3.         The learned counsel for the respondent also submitted that the appeal could neither be considered valid nor competent in view of the explicit wordings used by the legislature in the provisions of section 46 of the Act (as it then was). He further submitted that the Superintendent is not the Sales Tax Department and thus was not competent to file the said appeal before the STAT which quite rightly dismissed the same as not maintainable being filed by a non competent person.

 

4.         Mr. S. Mohsin Imam, learned counsel for the appellant candidly conceded that the appeal was not filed by the competent person before the STAT as the same was filed by the Superintendent who was not the competent person to do so.

 

5.         Facts of the case, briefly stated, are that three violations under the Sales Tax Act were alleged against the respondent No.1.  The Deputy Collector (D.C.) in his order-in-original No.141/2002 held that input tax adjustment amounting to Rs.65,235 made by the respondent No.1 during December 1998, is not admissible under the law and ordered for the recovery of the said amount. The D.C. also imposed a penalty of Rs.5000/- on the respondent No.1.  The respondent No.1 assailed the said order-in-original before the Collector of Customs, Sales Tax & Central Excise (Appeals) who vide his order in appeal No.19/2003, dated 24.04.2003, allowed the same by holding that the appellant (Respondent No.1 herein) has neither made any evasion of tax deliberately/willfully nor has contravened any law.  Against the said order-in-appeal the Superintendent of the Sales Tax Department filed an appeal before the STAT which was also dismissed vide judgment dated 12.1.2007 in the following terms:

 

"In view of the above discussion I arrived at conclusion that the appeal carries no merit and was not validly and properly filed and signed as provided under the provisions of Section 46 of the Sales Tax Act, 1990.  I, therefore, dismiss the same."

 

 

6.         It is against the above judgment dated 12.1.2007 that the present RA has been filed.

 

7.         We have heard both the learned counsel, the only question of law which requires determination in this RA is whether the appeal against the order-in-appeal before the STAT,  which was signed by the Superintendent of the Sales Tax Department,  was filed by a competent person or not.

 

8.         Before proceeding further it would be advantageous if the provision of appeal, as provided under subsection (1) of section 46 of the Sales Tax Act (as it then was) is reproduced:

 

“(1) Any person including the Sales Tax Department aggrieved by any decision or order passed by a officer of Sales Tax, may appeal to the Appellate Tribunal within sixty days of the date of communication of such decision or

order.”

 

The above sub-section starts with the words “Any person” and includes “the Sales Tax Department” and then it is qualified by adjective “aggrieved”.  Thus, it is apparent that any person aggrieved by any decision or order passed by an officer of Sales Tax can approach the Appellate Tribunal.  The Sales Tax Department has been specifically included in the person of “aggrieved” person.  Therefore, only two kinds of persons can file an appeal before the Appellate Tribunal (i) any aggrieved person, and (ii) the Sales Tax Department.

 

 

 

9.         In the decision Manthar & another Vs. Province of Sindh & 4 others (1996 MLD 1510) Hon’ble Mr. Justice Dr. Ghous Muhammad (as he then was) while sitting singly observed that “Dy. Commissioner is the proper person to act on behalf of the provincial government and admittedly he was a party in the suit. Apparently, he decided neither to contest the suit nor to challenge the decree by appeal. The learned counsel for the respondent was unable to demonstrate that the Divisional Forest Officer could be a valid substitute for the Deputy Commissioner or that he was otherwise authorized to act for the Government of Sindh under any relevant law and also to file appeal. Thus, in the absence of a valid authorization District Forest Officer could not be said to have the locus standi to file appeal under his designation”. In a yet another decision Government of Sindh Vs. Noor Muhammad & 2 others (1996 CLC 412) Hon’ble Mr. Justice Rana Bhagwan Das (as he then was) while sitting singly observed that “at the relevant time, only provincial government was competent to take the matter directly to the Court and the reference by Military Estate Officer to the Land Acquisition Officer was barred and not maintainable at law”. In the decision Panjab Province Vs. Malik Shehbaz Khan (NLR 1980 Civil Lahore 192) Hon’ble Mr. Justice Muhammad Ilyas observed that “it is not anybody acquainted with facts of the case who can file a suit on behalf of the government”. Beside being so he has got to be a person appointed by a general or special order to file the suit on behalf of the government. In the decision Assistant Collector Vs. Pakistan Petroleum Ltd. (2005 PTD 2539), wherein the appeal was filed in the name of the Assistant Collector, Customs and Central Excise, Sukkur and was signed by the Deputy Collector, Customs, Central Excise and Sales Tax, Hyderabad and the verification was signed by a Law Officer, Customs and Central Excise, Hyderabad,  the Division Bench of this Court found the appeal to be not maintainable and dismissed the same as appeal under section 36-C of the Central Excise Act, 1944 can only be filed by the Collector only.  In the decision reported as Director, Directorate General of Intelligence Vs. Al-Faiz Industries (2006 SCMR 129) the Hon’ble Supreme Court of Pakistan observed that “ the appeals were not filed in accordance with law and there was contravention and violation of the mandatory provisions of the law thus in view of the observations made hereinabove such appeals would be nullities having no legal existence.” In the case of Muhammad Rashid Bhatti (supra) it was held that “A Department  as used in section 56(d) connotes an establishment, division, unit, faculty or branch of administration under the control of the Government at higher level completely separate from its officers.”  (emphasis supplied).

 

 

10.       Admittedly, in the present case the appeal before the Appellate Tribunal though the appeal was filed in the name of the “Collector, Directorate of Customs, Sales Tax and Central Excise” but was not signed by such person rather it was signed by the Superintendent of the Sales Tax Department.  Neither he can be categorized as an “aggrieved person” as the impugned order was not passed against him nor is he “Sales Tax Department” as in the above cited cases it has clearly been held that a department is completely separate from its officers.

 

11.       While the hearing before the Tribunal was underway the applicant has failed to produce any document/cogent material to justify the authority vesting in the Superintendent to sign the appeal documents. The A.R. of the applicant even before us has failed to produce any document regarding delegation of authorization by the competent authority to the Superintendent to sign the appeal documents. In the case DIRECTOR INTELLIGENCE AND INVESTIGATION (CUSTOMS AND EXCISE) versus AHMAD FAZIL (2005 MLD 241) Mr. Mian Muhammad Najam-uz-Zaman J. of Lahore High Court observed that “maintainability of appeal was objected to by respondents on ground that same was not filed by a competent person/Authority---Validity of objection---Instant appeal was filed by Standing Counsel for Customs Authorities under instructions of Director Intelligence (appellant)---Power of Attorney filed by said counsel was admittedly signed by Superintendent Customs--­Counsel who filed appeal, was not law officer as defined under S.4-A of Central Law Officers Ordinance, 1985 nor he had been authorized by a competent Authority to file the appeal---Appeal was dismissed as not maintainable.

 

12.       Hence, in the light of the above discussion it can safely be inferred that the Superintendent of Customs is neither the competent person nor has the valid locus standi to file an appeal. Appeals are always deemed to have been properly filed when the memos of appeal and other appeal documents are signed & verified by the competent person who has duly been delegated such authority to do so.

 

13.       Accordingly, we answer all the questions referred to us in negative. The above are the reasons for our short order dated 12.01.2010. The present R.A. is therefore dismissed in limine alongwith the listed application.

 

14.       Before parting with the order we would like to put our displeasure on record at the manner in which government cases are being dealt with.  We will refrain from remarking whether it is willful negligence or due to inefficiency on the part of the person dealing with the same but it indeed is a very alarming situation that cases like the one in hand cannot be examined on merit because of lapse on the part of the dealing officer.  Why the appeal was signed by the “Superintendent in the office of the Appellant” and why not by the Collector himself.  It is hoped that in future these types of technical mistakes will not be repeated and undue loss will not be caused to the government exchequer.

 

 

Judge

 

 

 

           

Karachi, the ____ January, 2010.                                       Judge