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2018 SLD 159 Equiv. Citation: 2018 PTD 314 = (2018)118 TAX 204 = =

2018

PTD 314

INLAND REVENUE APPELLATE TRIBUNAL

I.T.As. Nos. 2244/LB, 2243/LB, 2242/LB of 2016 and M.As. (cond.) Nos. 56/LB to 58/LB of 2017, decision date: 31--10--2017, hearing date: 17--10--2017

PRESENT:

MUHAMMAD WASEEM CH. JUDICIAL MEMBER MASOOD AKHIAR SHAKEEDI, ACCOUNTANT MEMBER

PETITIONER(S): M/S. SAEED BROTHERS STEEL RE--ROLLING MILLS, LAHORE VS RESPONDENT(S): THE C.I.R., R.T.O., LAHORE

Mian Ahmad Saeed, ITP for Appellant. Ms. Amina Kamal, DR (RTO) for Respondent.

Income Tax Ordinance (XLIX of 2001)—

—Ss. 111(1)(d)(i) & 122(5--A)—SRO No. 345(I)/2010, dated 24--5--2010— Amendment of assessment—Assessing Officer noticed certain discrepancies which warranted action and considered the deemed assessment erroneous in so far as prejudicial to the interest of revenue within the meaning of S. 122(5--A) of the Income Tax Ordinance, 2001— Assessing Officer, initiated the proceedings and issued show-- cause notice confronting the taxpayer with alleged discrepancies and sought its explanation in that regard—Reply tendered by the taxpayer, being not satisfactory for the Assessing Officer, deemed assessment was amended—Appellate authority below upheld the order of the Assessing Officer—Taxpayer had declared rate of sale of re--rolled items, which was even lesser than the rate of ingots/billets which was raw material of re--rolled items—Assessing Officer had concluded that the taxpayer had suppressed/concealed sales which attracted the provisions of S. 111(1)(d)(i) of Income Tax Ordinance, 2001 and said amount was added to the total income of taxpayer—Held, that orders passed by the authorities below on the issues of suppressing of sales were not in accordance with law and the order was vacated —Action initiated by Assessing authority in exercise of its powers under S. 122(5--A) of the Income Tax Ordinance, 2001 and confirmed by appellate authority were not maintainable in the eyes of law.

1984

PTD (Trib.) 143; S.H. Mahmood and Company v. CIT, Karachi 1960 PTD 1347; Laser

Parix Deplix Clinic v. ATIR 2002 PTD 549; Commissioner of Income Tax v. Sakhi Contractors and Engineers, Multan, 1987 PTD 210; 2007 PTD (Trib.) 1253; CIR, Legal

Division, Hyderabad v. Messrs Shad & Co. Carriage Contractor Head Office, Hyderabad),

2011

PTD (Trib.) 2380; Defence Housing Authority Islamabad v. CIR, LTU, Islamabad 2013

PTD (Trib.) 1749; Haji Meher Din v. Commissioner of Income Tax 2002 PTD 541; Kamalia Steel Furnace v. CIR, RTO, Lahore I.T.A. 858/LB/2015 and I.T.A. 859/LB/2015 ref.

THIS ORDER PASSED BY: MASOOD AKHTAR SHAHEEDI (ACCOUNTANT MEMBER):------.----

--

This common order intends to dispose of the titled three further appeals along with the titled miscellaneous applications presented by an AOP. The appeals arise out of three separate appellate orders, all dated 23.06.2016, passed by the learned CIR(A--II), Lahore (the “CIR Appeals”). For the tax year 2011, the appellant, mainly, feels aggrieved of non-- consideration of its revised return. For the remaining two years, besides the maintainability

of action under section 122(5 A) of the Income Tax Ordinance, 2001 (the “Ordinance”), rejections of accounts, estimation of sales and disallowance of certain expenses constitute the grievances which have brought the appellant before us.

2. The Miscellaneous Applications (Condonation) have been filed seeking condonation of

delay in filing of the titled appeals. Earlier the office had raised objection that the orders of the learned CIR (A) having been served on 29.06.2016, the statutory period for filing of appeals expired on 28.08.2016 whereas the titled appeals were filed on 03.09.2016, thus

a delay of 6 days. The learned AR of the appellant explained the alleged delay, in terms of

the contents of the miscellaneous applications and submitted that proceeding before the learned CIR(A) had concluded on 4th May 2016. He pointed out that upon non receipt of the appellate order after a considerable time, the appellant came to know of the passing of order on 23rd June 2016 and its service upon its (the then) AR. Further submitted that the Appellant then applied for duplicate copies of the Impugned Appellate Orders which were provided to the Appellant on 26th August 2016 by the office of the learned CIR (A). He argued that the present appeals filed on 03.09.2016 were thus within the statutory limitation. He concluded that since appellant had nothing to gain from intentionally delaying the filing of appeals, the titled appeals needed to be treated as within time. He has placed reliance upon the following judgments:

1.

ITA No. 2954 of 1982--83 1984 PTD (Trib.) 143;

2.

S. H. Mahmood and Company v. CIT, Karachi 1960 PTD 1347;

3.

Laser Parix Deplix Clinic v. ATIR 2002 PTD 549.

3.

The learned DR opposed the prayer.

4.

Having considered the rival arguments and benefited from the views expressed by our

learned brothers as also their lordships, we feel convinced to condone the alleged delay in filing of the titled appeals. These are accordingly ordered to be treated as having been filed within time.

Tax Year 2011

5. Facts for the year under consideration lie in a narrow compass. The assessing officer

noticed that the appellant had not paid the minimum tax at the rate of 1% amounting to Rs.6,335,669/-- on its total turnover returned at Rs.635,566,866/--. Non--payment of flood surcharge at the rate of 15% to the tune of Rs. 278,061/-- was also observed. He

accordingly invoked the provisions of Section 122(5A) of the Ordinance. The last notice was issued on 20.5.2015 for compliance by 28.05.2015. For stated non--compliance of the said notice, the Assessing Officer proceeded ex parte to pass the impugned order on

07.03.2016. The learned CIR(A) confirmed the amendment order.

6. At the outset, the learned AR drew our attention to the following extract of the

amendment order dated 07.03.2016.

“In response to this notice, neither anybody attended the proceedings nor has any application for adjournment has been received. Therefore, a reminder was issued to the taxpayer on 20.05.2015 for compliance on 28.05.2015 which was received back un--

served with the report of Notice Server that the taxpayer refused to receive the notice. The notice was then served through affixture by the Inspector namely Mr. Zafar Iqbal on

11.05.2015. On the due date again neither anybody attended the proceedings nor has any

application for adjournment has been received. Considering the attitude of the taxpayer, it

is

tear that despite proper service of notices, the taxpayer has no explanation to offer.”

7.

He argued that a notice dated 20.05.2015 could not possibly or plausibly, be served

through affixture nine days earlier on 11.05.2015. He further drew our attention to the fact that the impugned order dated 07.03.2016, having not been passed on a day for which the hearing had allegedly been fixed, suffered from a serious legal infirmity. He quoted with favour the ratio settled in Commissioner of Income Tax v. Sakhi Contractors and Engineers, Multan, 1987 PTD 210 Lahore, to bail out his client on this score. The

learned AR further brought to our notice the fact that, during the course of amendment proceedings, the appellant had filed a revised return on 26.05.2015 whereby the figures of turnover had been revised. He vehemently contended that a revised return, upon its filing, results in an amended assessment order in terms of section 122(3) of the Ordinance. He argued that a revised return dated 26.05.2015 having not been discarded by the competent authority under Section 122 attained finality then and there. He stressed that it was the revised return which could have been subjected to amendment and not the original return. Reliance in this regard is placed upon the cases cited as.

1. I.T.A. No. 1276/LB of 2006, 2007 PTD (Trib.) 1253;

2. CIR, Legal Division, Hyderabad v. Messrs Shad & Co. Carriage Contractor Head Office, Hyderabad 2011 PTD (Trib.) 2380

3. Defence Housing Authority Islamabad v. CIR, LTU, Islamabad 2013 PTD (Trib.) 1749

In response to a specific question as to why the factum of filing of revised return was not brought to the knowledge of the learned First Appellate Authority, the learned AR candidly conceded that it could have been a human error on the part of the then Authorized Representative. He pleaded that any commission or omission on the part of the Authorized Representative might not in the interest of justice and fair play be made the basis for punishing the Taxpayer. He further explained that the factum of filing of return was and is always verifiable from taxpayer’s profile available with the revenue authorities. The learned DR vehemently opposed. According to the learned DR filing of revised return was an afterthought and it carried no legal sanctity.

8. We have considered the rival arguments as also perused the case law. In the case of DHA Islamabad (supra @ page 1759) our learned brothers made the following authoritative pronouncement:

“We are further of the view that no provision of section 114 restrict the taxpayer for filing a revised return during the audit proceedings and if any revised return is found incomplete that does not become invalid automatically as has already been held by this Tribunal in a case reported as 2010 PTD 2602 wherein while deciding the issue that whether in the case of return filed and qualified to be accepted under subsection (1) of section 120 including a revised return filed and treated to be an assessment order under subsection (3) of section 122 the assessing officer could only pass an order of amendment under the relevant provision of section 122 of the Ordinance. It has been categorically held that for passing of an order to frame the assessment of income on the basis of result of audit the official of the department have to keep in mind the concept and procedure of assessment provided under the new law that is Income Tax Ordinance, 2001. Under the new scheme of assessment a valid return of income in all the cases of taxpayer is deemed to be an assessment order under the provision of subsection (1) of section 120 on the day it is furnished without there being any exception. Similarly in case of a revised return filed under subsection (6) of section 114 it is treaded to be an amended assessment order under the provision of sub--section (3) of section 122 of the Ordinance. This Tribunal in a case reported as 2011 PTD 2389 has held that the revised return filed by the taxpayer for all purposes are the assessment order which includes the audit proceedings under section 177, amendment under section 122 etc. and has finally been held that making an assessment in ignorance to the amendment assessment order/revised return by implication of the provisions of section 122(3)(b) an amended order on the basis of earlier assessment order cannot stay in the field. Keeping in view all these facts and the legal position we are of the view that there was no justification for amending the assessment without considering the revised return filed by the taxpayer. We, therefore, without going into the merits of the case allow the appeal on the legal ground that the assessment in this case is made by ignoring amended assessment in the shape of revised return which has been filed after the prior approval of the department official in accordance with law. Consequently, the impugned order of the learned CIR(A) is vacated and the order passed by the Taxation officer is annulled.”

The learned DR has not been able to distinguish the case of the appellant before us so as to render the ratio settled in DHA case (supra) as inapplicable to the appellant before us. We, therefore, do not feel any hesitation in vacating the impugned assessment order along with the appellate order.

Miscellaneous Application (Additional Grounds) for tax years 2012 and 2013

9. The Appellant has sought our permission, through the titled Miscellaneous Applications, to plead some additional grounds of appeal, which are common to both the years (except change of figures).

10. The learned AR pleaded that the additional grounds are of legal nature and go to the

very root of the cause as also the case. He relied upon the ratio settled by their lordships’ of the Lahore High Court in re: Haji Meher Din v. Commissioner of Income Tax 2002 PTD 541 (Lahore) to the following effect:

The “

stressed. There could be a number of reasons for not taking a ground in the memo, of appeal despite its availability. It can start from inadvertence to end at negligence. Whatever be the reason when a lis pending before a Court or a judicial forum, entertainment of an additional ground should be a rule and not an exception. Unless the purpose for making of additional ground is either to delay the proceedings or is to cause embarrassing to the parties or the Presiding Officer an additional ground must not be refused provided, it is made or raised before conclusion of hearing. Even in case where a hearing is complete but the order is not announced an additional ground should not ordinarily be refused except for the reasons noted above”

word “additional grounds” itself implies that a ground not already taken was being

The case of Messer Siddique Enterprises v. CIR (Appeals), RTO, Faisalabad is also quoted with favour where our learned brothers had observed:

are of the considered opinion that any legal issue can be raised at any stage of

adjudication of the case and the taxpayer has all rights to raise any new or additional legal issues for the first time before the Appellate Tribunal even though not set forth in memorandum of appeal filed before this Tribunal or even if it had not been raised before the original stage of adjudication or at the time of first appeal before the CIR (Appeals) and when any such new or additional ground is raised before the Tribunal, it is duty bound ”

we “

to entertain that ground and render a decision thereon

The learned DR opposed the requests in the absence of any valid reason for not filing the same at the time of presentation of appeal.

11. Having considered the rival arguments on this issue, we allowed the learned AR to

argue the additional grounds keeping in view the authorities quoted by the learned AR.

Tax Years 2012 and 2013

12. Brief facts of the case as per impugned order for the tax year 2012 are that the taxpayer returned income at Rs. 4,552,460/-- against consumption of electricity units 1,627,860. The OIR applied, on the basis of SRO No. 345(I)/2010 dated 24.05.2010 issued under the Sales Tax Act, 1990, a formula of production of 1 Metric Ton against 130 Units of electricity and applying a sale rate of Rs.65,000 to the production thus worked out, reached a figure of Rs. 813,930,000 to be the total sales of the appellant against the declared version of Rs. 699,759,935. It was further noted that appellant had not paid turnover tax and WWF. A show--cause notice was issued on 08.05.2015 for compliance on 19.05.2015 under section 122(I)/(5A)/(9) of the Ordinance. As per the impugned amendment order nobody attended the proceedings nor any request for adjournment was received. A specific notice under Section 111(1)(d)(i) of the Ordinance read with the 122(5A)/(9) of the Ordinance followed on 20.05.2015 requiring compliance on 28.05.2015.

Finally of notice was issued on 29.02.2016 seeking compliance and attendance by 07 03.2016. In response thereof the taxpayer sought adjournment of 30 days vide its letter dated 07.03.2016 which was refused. At the end of the day the OIR proceeded to make an addition under section 111(1)(d)(i) of the Ordinance to the tune of Rs. 114,170,165/--, the taxpayer had claimed expenses under the head ‘Repair and Maintenance’ at Rs.9,717,160/--. This was also disallowed Income thus assessed was subject to charge of WWF at the rate of 2%.

13. For the tax year 2013 the facts are same except change of figures. The appellant had

returned sales at Rs.667,088,864/-- on total production of 12237 MT against total consumption of total electricity units at 1,590,840 at rate of Rs.54, 511/-- per metric ton. The OIR applied a sale rate of Rs.70,000/-- and worked out resulted addition at Rs. 189,537,290/-- which was added in appellant’s income. Claim of sales tax (Rs. 8,778,492/--) and expenses on account of repair and maintenance (Rs. 5,812,646/--) were also disallowed so as to assess total income at Rs.208,438,527/--. The reasoning which prevailed upon the learned OIR is found in the following extract from the Amendment Assessment Order:

“In the income tax return total sales have been declared at Rs. 699,759,935/-- you are running a Re--rolling unit which requires 130 Electricity Units for production of 1--M.Ton. The production when measured with consumption of electricity units in accordance with the production formula agreed upon with the Steel Mills Association and resultant Special Procedure Rules of Sales Tax 2007 for Steel Melters is worked out at 12,522--M--Tons. The declared sales rate is Rs. 55,882/-- per metric ton, which is grossly understated. The rate of Ingots /Billets is fixed at Rs. 55,000/-- to Rs. 60,000/ per M. Ton through SRO No. 345(I)/2010 dated 24.05.2010 which if reproduced hereunder:

S.R.O. 345(I)/2010.—In exercise of the powers conferred by the first proviso to clause (46) of section 2 of the Sales Tax Act, 1990, the Federal Board of Revenue is pleased to fix the value of locally produced goods specified in the Table below, supplied by registered persons opting to pay sales tax on ad valorem basis, at the rate specified in subsection (1) of section 3 of the Act.

TABLE

Sr.

No.

Goods

Value

(1)

(2)

(3)

1.

Bullets

Rs. 60,000 per metric ton

2.

Ingots

Rs. 55,000 per metric ton

2. In case the value of supply of the goods specified in this notification is higher than the values fixed therein, the value of goods shall be the value at which the supply is made.

[C. No. 3(5)ST--L&P/2007]

Considering the consumption of Electricity Units as well as sale rate of re--rolled items declared by other parallel cases and rate prevailing in the market the minimum sale rate is adopted @ Rs. 65,000/-- per metric ton including value addition for M.S. Products in your cases. Your sales are therefore worked out at Rs. 813,930,000/-- whereas, total sales have been declared by you at Rs. 699,759,935/-- resulting suppression of sales at Rs. 114,170,065/--. Thus sales have been concealed/ suppressed to the extent of Rs. 114,170,065/-- which attracted the provisions of section 111(1)(d)(i) of the Income Tax Ordinance, 2001. The undersigned thus intends to make an addition of Rs. 114,170,065/-- in your total income under section 111(1)(d)(i) as income from other sources.”

14. The learned first appellate authority took up the merits of the appeal before him and

rejected the appeal after observing as under:

“So far as rejection of low declared sale rate and application of higher sale rate is concerned the action of the OIR in treating the deemed assessment as erroneous in so far as prejudicial to the interest of revenue under section 122(5A) of the Ordinance, is found to be justified being lawful because of the fact that sale rate declared by the appellant was too low to that of the rate as fixed in S.R.O. 345(I)/2010 for the purpose of sales tax. Though both the income tax and sales tax law are separate enactments but they do not prohibit the tax officials to draw inference and gather information from each other. The comparisons of various statements filed by the taxpayer for income tax and sales tax are subjected to scrutiny and desk audit which quite frequently leads to discovery of discrepancies and needs correction and proper taxation. Further efforts are made to make compatibility of both laws which was on^ of the major goals of merging both tax regimes.”

For the tax year 2012 addition on account of sales tax was upheld with following remarks:

“I have considered the rival arguments in the perspective of the impugned order, it persuades me to hold that the submissions made at bar carry no weight. The OIR rightly observed that the expense claimed was inadmissible as the taxpayer charged sales tax @ Rs. 780/-- per metric ton. Against 12552--M.Ton quantity the total sales was charged at Rs. 9,7667,160/, The taxpayer thus enjoyed double benefit, firstly by claiming the sales tax paid on electricity bill in the cost of sales and secondly by recovering the same from customers which rendered the amount of Rs. 9,767,160/-- claimed as expense in the cost of sales being inadmissible expense. The action of the OIR is upheld being as per law.”

For the tax year 2013, besides confirming additions under Section 111 of the Ordinance and claim of sales tax he also confirmed the addition under section 21(i) of the Ordinance, agreeing with OIR that the said expense was of capital nature.

15. The learned AR, opening his case, strongly objected to invocation of section 122(5A) of

the Ordinance in the appellant’s case. He argued that the learned OIR unlawfully imported the provisions of S.R.O. 345(I)/2010 issued under the Sales Tax Act, 1990, to proceed against the taxpayer. He sought help from the judgment in I.T.A. 28/LB/2016 dated 03.08.2017 where a learned division bench of this Tribunal held the action under section 122(5A) of the Ordinance based on the provisions of said SRO 345 as unmaintainable. Alternatively, he pointed out that the assessing officer, even otherwise, could not find fault

with the total quantitative production of the appellant which was accepted as declared. The OIR, he continued, subjected the declared quantity to a sale rate which was calculated on figures noted in the said SRO for sales tax purposes plus some whimsical figure of value addition.

16. For the tax year 2012 he pointed out that expenses claimed on account of repair and

maintenance were disallowed without ever confronting the taxpayer. He explained that show--cause notice dated 08.05.2015 only mentioned application of sale rate, levy of minimum tax claim of sales tax and non--charging of WWF. He vehemently contends that the impugned addition on this account was thus unsustainable in the eyes of law. The learned DR supported the impugned orders for the reasons recorded therein.

17. We have heard the rival arguments, examined the record and benefited from the case

law presented before us. In our considered opinion, the issue as to invocation of provisions of Section 122(5A) of the Ordinance on the basis of the said Sales Tax SRO 345 is by now

a settled one. It had earlier come up for adjudication before this Tribunal in re: Kamalia Steel Furnace v. CIR, RTO, Lahore (I.T.A. 858/LB/2015 and I.T.A. 859/LB/2015), where, under identical circumstances, the learned Bench of this Tribunal allowed the taxpayer’s appeals holding against application of the said SRO. Operative part of the said judgment is reproduced below for convenience of reference:

“6. Precisely, two questions are involved in the case in hand. Firstly, whether on the basis of extraneous material, proceedings under section 122(5A) of the Ordinance can be

initiated and secondly whether on the basis of SRO relating to sales tax (which was not even adopted in the sales tax proceedings), any proceedings of income tax can be initiated.

7. The answer to the first question is obviously in negative as an extraneous material cannot be made basis for invocation of provision of section 122(5A) of the Ordinance. Only the material available on record can justify such like action on behalf of the departmental authorities. Furthermore, the scope of proceedings under section 122(5A) of the Ordinance is nevertheless very narrow and restricted as the department has to establish two eventualities i.e. simultaneously the one is illegality and the other is loss of revenue. If any one of these is not existing, the initiation of proceedings under section 122(5A) of the Ordinance would be illegal. Reliance by the learned counsel placed on the reported judgment of Islamabad High Court relevant/operative part of which is reproduced in pre-- para supports the arguments. With regard to the second question we are of the considered opinion that the sales tax and income tax are two different legislation providing different modes of levy of tax. One is the direct tax whereas the other is indirect tax. Furthermore, in light of the pronouncements delivered by the higher appellate forums, on the basis on one of the proceedings in respect of the other cannot be initiated. In view of the foregoing discussion, we are left with no other option except to declare the order passed by both authorities below to be illegal, void ab--initio by way of acceptance of instant appeal. We order accordingly.”

18. Again the issue came up before this Tribunal in I.T.A. No. 195l/LB/2014 (tax year

2012) where the ratio settled in the case of Kamalia Steel (supra) was followed by

observing:

“We find substantial force in submissions made by the learned AR at the bar. The suppressed sales were calculated by the assessing authority by applying sale rate of Rs. 65,000/-- per M. Ton against declared sale rate of Rs.375/-- per M. Ton. The whole case of estimation of sales was made out on the basis of SRO which was issued by the Board to collect sales tax on ad-- valorem basis. It seems that the assessing authority is in old frame of mind as there is no scope of estimation presumption and surmises.”

The judgment relied upon by the learned AR in case of Messrs Awais Steel (which was co-- authored by one of us, the Accountant Member), has shown due respect to Tribunals views expressed in earlier judgments referred to above. Facts obtaining in Tribunals order dated 03.08.2017 in case of Awais Steel (supra) are that the taxpayer--appellant, an individual filed its income tax return for the tax year 2013 declaring income at Rs. 3,728,261/-- which was deemed to be an assessment order in terms of Section 120 of the Income Tax Ordinance, 2001. Later on, the assessing officer noticed certain discrepancies which warranted action and considered the deemed assessment erroneous in so far as prejudicial to the interest of Revenue within the meaning of section 122(5A) of the Ordinance. Accordingly, he initiated the proceedings and issued show-- cause notice under section 122(9) read with 122(5A) of the Ordinance confronting the appellant--taxpayer with alleged discrepancies and sought its explanation in this regard. In response thereto, the reply tendered by the taxpayer could not satisfy the assessing officer, hence the deemed assessment was amended by the assessing officer under section 122(5A) of the Ordinance, vide order dated 16.06.2015.

19. Feeling aggrieved with the treatment accorded by the assessing officer, the taxpayer

filed appeal before the CIR (Appeals--II), Lahore who by virtue of his order dated supra upheld the order of the assessing officer. This dispensation has compelled the appellant to

come up in further appeal before the learned Appellate Tribunal Inland Revenue.

As regards, the addition on account of suppressed sales/sales rate, it was observed by the assessing officer that the taxpayer declared sale rate of re--rolled items at Rs. 36,076/-- to Rs. 65,000/-- per metric ton which was even less than the rate of ingots/billets which was raw material of re--rolled items. According to him, sale rate re--rolled items declared by other similar manufacturers ranged from Rs. 60,000/-- per metric ton for tax year 2013.

The applied sale rate for the taxpayer also included the value addition of M.S. Product over and above the sale rate for billets. Therefore, it was concluded by the Assessing Officer that the taxpayer had suppressed/concealed sales at Rs. 281,667,564/-- which attracted the provisions of section 111(1)(d)(i) of the Ordinance and the said amount was made to the total income of the taxpayer. The learned Division Bench atter quoting from the earlier judgments in the case of Messrs Jamal Steel (supra) and Messrs Kamalia Steel (supra) held as under:

“It is pertinent to mention here that the Federal Board of Revenue issued SRO 345(I)/2010 for the purpose of levy of sales tax on the registered person opting to pay sales tax on ad- - valorem basis. However, the assessing officer failed to understand its applicability and misinterpreted the said SRO and charged the tax on the appellant. The sales tax and income tax are two different legislation providing different modes of levy of tax. One is direct tax, whereas the other is indirect tax. According to the pronouncments delivered by the higher appellate forum, on the basis of one, the proceedings in respect of the other cannot be initiated.”

10. What has been discussed above and in the light of the judgment of the Superior

Courts, we are constrained to opine that the orders passed by the authorities below on the issue suppressed sales is not in accordance with law. Therefore, the same is vacated. Consequently, the appeal of the taxpayer succeeds on this point.”

20. We would readily agree with the learned AR that the facts of the case of the appellant

for both the years are on all fours with those of the judgments quoted above. Thus we have no hesitation in holding that the impugned action initiated by the learned OIR in exercise of his powers under Section 122(5A) of the Ordinance, and confirmed by the learned first appellate authority, are unmaintainable in the eyes of law. The impugned orders for both the years are accordingly vacated being unlawful and unmaintainable on legal plain.

21. Since the relief has been provided to the appellant on legal grounds the others issue

do not require adjudication. Both the appeals succeed.

22. The three appeals succeed.