Customs, Excise and Sales Tax Appellate Tribunal: words and spirit of the law-I

It is futile to look for logic in the provisions of a taxing statute. Tax laws should be constructed on the basis of the language used by text of the law. Justice, equity or reason are not relevant in relation to a fiscal law. In relation to a taxing statute to be guided by text of the law is the need.
One does not have to look at what is not clearly written in the law. One must not swing by considerations that might weigh in a case otherwise, winking at words of the law. Issues of hardships and rendering justice cannot provide rationale for departing from provisions of the enactments.
However, this does not mean that the language of the provisions should be tutored into meaning something artificial, if natural meaning of the law is not repugnant to reason. A legal fiction must be limited to the purpose for which it has been created. It cannot be extended beyond its legitimate field.
On 'what a fiscal statute is like and how the relevant authorities should look at their concept', the Lahore High Court in Avari Hotel Ltd vs. The Collector of Sales Tax & Others, has provided guidelines in the following words:
"The rules of interpretation of fiscal statute are by now very well known. These are that only words of the statute should be looked into 1977 SCMR 371 re: Collector of Customs (Appraisement), Karachi and Others v. Messrs Abduld Majeed Khan and Others; that a levy can only be made by express and exact words 1971 SCMR 128 re: Hijvari & Co v. Commissioner of Sales that a person must be taxed only if he comes within the letter of law otherwise he is free even though his case falls within the spirit of law.
AIR 1931 Lahore 572 re: Hira Chand v. Emperor that in fiscal statutes only the letter of law is to be looked into and that there is no room for any intendment, equity or presumption 1989 PTD 909 re: Commissioner of Agricultural Income-tax, East Bengal v. B.W.M. Abdul Rehman; that such like statutes should be strictly construed as for liability to tax is concerned (PLD 1961 SC 119) re: Nawabzada M. Amir Khan v. Controller of Estate Duty; that the language of a taxing statute should not be stretched to hold subject liable to tax (AR 1940 PC 183) re: Bank of Chettinad Ltd v. CIT, Madras; that where two equally reasonable interpretations are possible strict and other liberal then the one favourable to the subject should be adopted (PLD 1961 SC 375) re: CIT, East Pakistan v. Hussain Qassim Dada. To epitomise all of them, in fiscal statute every word must be construed in the perspective it has been used, that nothing should be considered as superfluous, or surplusage. Also that subject should be allowed to escape the incidence of taxation if he cannot be brought within the four corners of words of law."
CONSTITUTION & SCOPE
PROVISIONS RELATING TO APPELLATE TRIBUNAL APPEAR IN:

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The Customs Act-1969           -       Sections 194, 194-A, 194-B

                                                          & 194-C

The Federal Excise Act-2005     -                      Section 34

The Sales Tax Act-1990          -                      Section 46

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Texts of provisions under the above three legislations dealing with 'Appellate Tribunal' are different.
"The penal provisions of law, like the law relating to limitation for filing of appeal, depriving a party from seeking adjudication of its case on merits, after a particular period, are to be construed strictly and the same cannot be invoked on mere presumptions or assumptions." - Extract from "The Customs Act, 1969 (Second Edition 2005-2006) by Javaid Umar. Page No 1703.
1(1). UNDER SECTION 194-A OF THE CUSTOMS ACT, ANY PERSON AGGRIEVED BY ANY OF THE FOLLOWING MAY APPEAL TO THE APPELLATE TRIBUNAL:
(a). an order passed by the Collector (Appeals) under section 193;
(b). an order passed under section 193, as it stood immediately before the appointed day;
(c). an order passed by the Board or the Collector of Customs under section 195.
Under section 194-C(7) when trying a suit in respect of the following matters, the Appellate Tribunal is vested with powers in a court under the Civil Procedure Code:
(a). Discovery and inspection;
(b). Enforcing the attendance of any person and examining him on oath;
(c). Compelling the production of books of account and other documents; and
(d). Issuing commission.
(2). Section 34 of the Federal Excise Act provides that any person aggrieved by any of the following may file appeal with the Appellate Tribunal:
(a). order passed by the Collector (Appeals), and
(b). order passed by CBR or Collector of Federal Excise under section 35.
(3). Section 46(1) of the Sales Tax Act provides that any person aggrieved by:
(a). any order passed by the Collector under sub-section (4) of section 45-A or the Collector of Sales Tax (Appeals) under section 45-B; and
(b). any order passed by the CBR or the Collector of Sales Tax under section 45-A. may file appeal with the Appellate Tribunal.
2. Under section 194-B(1) of the Customs Act, in terms of section 34(1) of the Federal Excise Act and according to section 46(7) of the Sales Tax Act an order is required to be passed within six months of filing the appeal with the Appellate Tribunal.
3. THE RELEVANT LAW PROVISIONS IN FEDERAL EXCISE ACT AND SALES TAX ACT ARE NOT ELABORATE ON THE PATTERN OF THE CUSTOMS ACT:
Customs, Excise & Sales Tax Appellate Tribunal (Procedure) Rules-2006 (Rules) can be said to cater functioning etc of the Appellate Tribunal under the "Act". In terms of sub-rule (a) of rule 2(1), "Act" means the Customs Act-1969 or the Sales Tax Act-1990 or the Federal Excise Act-2005. As the name of the Appellate Tribunal "Customs, Excise & Sales Tax Appellate Tribunal" (Tribunal) indicates and phraseology of the rules provides, the Tribunal derives authority from all the three aforesaid Acts. The word "Tribunal" defined by rule 2(j) of the rules reaffirms and fortifies such conviction.
"The Tribunal is always required to dilate upon all the questions of facts and law agitated before it, so that, the High Court is not handicapped in deciding the questions of law. [Engro Chemical Pakistan Ltd vs. Additional Collector of Customs 2003 PTD 777]."- Extract from "The Customs Act, 1969 (Second Edition 2005-2006) by Javaid Umar. Page No 1698.
Customs Act provides that a judicial member of the Appellate Tribunal shall be one who has been a judge of the High Court or is or has been a District Judge, qualified to be a judge of the High Court, or one who has been advocate of a High Court, qualified to be judge of a High Court. A technical member shall be an officer of Customs & Excise Group equivalent in rank to that of a member, CBR, the law provides.
JURISDICTION:
Civilisations work in an era where every one, individuals and institutions, works in a compartmentalised scenario, with checks and balances. In relation to the subject each individual or institution is assigned a task, vested with wherewithal to accomplish the task assigned and later evaluated in relation thereto. Constitutionality or otherwise area of his doings to be depends on the chater he has.
To the extent of his extra territorial acts or indulgences he may not be in keeping with the law, unconstitutionally or ultra vires. In civilised societies there is no exception to this rule.
Reporting statement of Mr Makhdoom Ali Khan, Attorney General of Pakistan before the apex court in Steel Mills case, the story reads: "He said that while hearing petitions challenging steel mills privatisation, the apex court should keep in mind that its jurisdiction was limited, confined to determining the question of law, and that it could not summon witnesses to record evidence, a jurisdiction only enjoyed by the high court". So goes the press report.
In his address to the Rawalpindi High Court Bar Association, speaking on jurisdiction of a state organ, the Chief Justice of Pakistan, Mohammad Iftikhar Chaudhry, fortified same legal view. According to press report his words were: "It is impermissible for an organ to exceed its prescribed limits."
It is well-settled principle in law that an appellant on his appeal cannot be put in a worse position than what he was in earlier. Law restricts travel beyond scope of the appeal or passing an order or giving a direction which would work adversely to the appellant.
It would mean that the appellate authority is not allowed to simply enhance tax liability of the appellant. No party on the opposite side of the appellant ie with the respondent may be added as the same would go to enhance hassle of the appellant.
The Lahore High Court, Lahore, in the case of Karss Paints and Allied Industries, Faisalabad vs. Collector of Sales Tax, Faisalabad and Another [(2007) 95 Tax 77 (H.C. Lah.)](Sales Tax Appeal No 503 of 2002, decided on 18-07-2006), has held:
"Third, that in absence of a cross appeal the appellant in a revenue matter may not be pushed to a position worse than the one at which he was placed at the time of filing of an appeal. In re: Chaudhry Muhammad Sadiq v. Income Tax Officer and others (1988 PTD 1014) a remand by the Income Tax Tribunal which was found likely to expose the assessee to another round of cumbersome proceedings and unnecessary harassment was struck down by this Court in exercise of constitutional jurisdiction."
1. PRINCIPLES OF LAW FOCUSED BY SUPREME COURT IN ELAHI COTTON MILLS LTD. & OTHERS VS. FEDERATION OF PAKISTAN, INCLUDE THE FOLLOWING: "That Frankfurter J. in Money v. Doud (1957) US 457 has remarked that "in the utilities, tax and economic regulation cases, there are good reasons for judicial self restraint if not judicial deference to the legislative judgement."
2. WHETHER AT THE ADJUDICATION STAGE THE AGGRIEVED PARTY HAD AN OPPORTUNITY OF BEING HEARD, THE APPELLATE TRIBUNAL MAY LOOK AT:
"Even in cases where the assessee does not file reply to show cause notice and does not also appear for personal hearing, it cannot be straightaway concluded that the assessee is guilty. It is necessary for the adjudicating authority to discuss the merits of the case based on evidence on record." "Guide To Central Excise Law & Practice" (Sixth Edition 2006-07) by Arvind P. Datar - Page No 907.
3. Inducting an outside party in list of respondents is making addition to means available to adversaries of the appellant. Such addition of means in the hands of the respondents on the ground of providing justice, fair play, level playing field, catering public interest or assisting the exchequer or on any other count is not upheld by the law.
"But in construing an Act the courts cannot add to the means enacted by the Legislature for giving effect to its policy even if those means are not adequate to achieve the object and leave room for evasion." "Principles of Statutory Interpretation" (Eighth Edition-2001) by Justice G.P. Singh. Page No 671.
4. "It is not for the Court to suggest in any case that a more equitable mode of assessment or rate of taxation might be adopted than the one prescribed by the Legislature." "N.S. Bindra's Interpretation of Statutes" (Eighth Edition) by Justice G.P. Singh. Page No 704.
5(1). With reference to jurisdiction of an Appellate Tribunal, the Sindh High Court in M/s. Karim Containers (Pvt) Ltd vs. Customs, Central Excise & Sales Tax Appellate Tribunal [2003 PTD 1106] (Constitutional Petition No D-1865), has held:
"The Tribunal cannot be held to be a Court of Civil jurisdiction by any stretch of imagination. It has been held by a Division Bench of this Court in the case of Nazir Ali M.H. Gangji v. Commissioner of Income Tax 1994 PTD 1985, that, the jurisdiction exercised by the High Court under section 136 of the Income Tax Ordinance, 1979 is not that of a Civil Court and consequently, provisions contained in Civil Procedure Code are not applicable.
It has been held that, the powers exercised by the High Court Under Section 136 of the Income Tax Ordinance, has not been conferred by the Code of Civil Procedure and is a special jurisdiction of limited nature not conferred by the Code of Civil Procedure but by the special provisions of the Income Tax Ordinance and, therefore, any incidental or ancillary powers under the C.P.C. are not available to the High Court. Thus the question of extending equitable provisions contained in Order 39, C.P.C. to the proceedings pending before the Tribunal under the Sales Tax Act, does not arise."
Giving rationale for non-extension of Appellate Tribunal's jurisdiction in line with a Court of Civil jurisdiction, the Hon'able Justice Ahmed Sarwana and Justice Mujeebullah Siddiqui in the above case ruled:
"........... the Tribunal exercises jurisdiction under the Special Act and thus the provisions contained in Civil Procedure Code, which is a general law pertaining to the procedure as well as the jurisdiction regarding the matters seized by the Courts of Civil Jurisdiction and in respect of incidental and ancillary matters cannot be extended to the proceedings under the Special Law."
(2). The Sindh High Court, in Collector of Sales Tax (East), Karachi vs. Customs, Excise, Sales Tax Appellate Tribunal, Karachi [2003 PTD 1477](Sales Tax Appeal No 27 of 2002), held:
(a). "......... Sales Tax Act is a complete code in itself and a special law shall exclude the provisions contained in general law. The Sales Tax Act contains all the substantive as well as procedural law, pertaining to the charge-levy, assessment and appeals pertaining to the Sales Tax.........", and;
(b). "......... therefore, the question of exercise of inherent jurisdiction under C.P.C. does not arise ........".
6(1). "Appellant cannot be put to worse position. - An aggrieved person who appeals against an order cannot be put into a worse position than he was in before the appeal." "Guide To Central Excise Law & Practice" (Sixth Edition 2006-07) by Arvind P. Datar. Page No 907.
(2). "If the revenue has not filed appeal against an order granting refund, but crediting it to the Fund, the appellate Commissioner cannot put the appellant in worse position by holding that rectification provision under section 154 of the Customs Act, had not been followed." "Guide To Central Excise Law & Practice" (Sixth Edition 2006-07) by Arvind P. Datar. Page No 907.
(To be concluded)