Decision within stipulated period: SC explains why a taxpayer’s appeal can’t be negated

ISLAMABAD: The Supreme Court has held if a taxpayer’s appeal is not decided within the stipulated period, his appeal cannot be negated and the taxpayer non-suited on this score, as to hold otherwise would be eminently unfair and gives the state a premium for its own functionary’s non-compliance with the law.

A three-judge bench headed by Justice Qazi Faez Isa comprising Justice Yahya Afridi Justice Jamal Khan Mandokhail declared that on the appeal of M/s A.J. Traders against the judgments of the Peshawar High Court passed in Customs Reference.

The judgment authored by Justice Faez stated that “Article 4 of the Constitution accords the protection of law and to be treated in accordance with law to be the inalienable right of every citizen and also of every other person for the time being in Pakistan.”

“The right to be dealt with in accordance with the law is further fortified by Article 10A of the Constitution which stipulates a fair trial and due process as a Fundamental Right”, it added.

It said that these rights cannot be negated or diluted by statute, and if any law purports to do so it shall to such extent be void, as stipulated in Article 8(1) and (2) of the constitution, adding, “Therefore, it cannot be stated that an order belatedly passed on a taxpayer’s appeal is a void order and/ or a nullity”.

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Recently, a two-member bench of the apex court while interpreting a similar provision of the Sales Tax Act, 1990 held that the same was ‘mandatory and if (the appeal is) decided beyond the given time … makes the order void.’ Justice Faez noted in the judgment that the consequences for not deciding the appeal within the prescribed time is not provided in the Customs Act, 1969.

M/s A.J. Traders (appellants) had availed the benefit of SRO No. 266(I)/2001 dated 7 May 2001 and had imported silver and gold which was required to be used in the manufacture of jewellery and the jewellery manufactured there from was to be exported within one hundred and eighty days, but no export took place.

Therefore, the Collector of Customs on 25th January 2016 passed orders-in-original, which were unsuccessfully appealed before the Customs Appellate Tribunal. Thereafter, the appellants filed customs references before the Peshawar High Court, Peshawar but these too were dismissed.

It was the contention of the appellant that the Tribunal did not decide the appeals within sixty days nor extended the period for decision in terms of the first proviso to section 194-B of the Customs Act, 1969, which says; “Provided that the appeal shall be decided within sixty days of filing the appeal or within such extended period as the Tribunal may, for reasons to be recorded in writing, fix”.

The counsel for the appellant argued that since the Tribunal did not decide the appeals within the prescribed period nor extended the period; therefore, the judgments passed by the Tribunal are void and a nullity in law.

The judgment noted that the Deputy Collector (Adjudication) had delayed in deciding the show cause notice. It said belatedly adjudicating a show cause notice is not the same as belatedly deciding an appeal preferred against a purported liability, because then the appellate authority’s tardiness, whether intentional or otherwise, will frustrate the taxpayer’s appeal, which is not the intention of the law, nor could it be as it would violate Articles 4 and 10A of the Constitution.

The legislature in prescribing a period within which an appeal should, or must, be decided obligates the appellate authority. Therefore, if there are any consequences in deciding an appeal beyond the prescribed period the same may only be visited upon the State functionaries, and not on an appellant taxpayer.

Copyright Business Recorder, 2022