WAK LIMITED, MULTAN ROAD, LAHORE vs COLLECTOR CENTRAL EXCISE AND SALES TAX LAHORE (NOW COMMISSIONER INLAND REV

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WAK LIMITED, MULTAN ROAD, LAHORE VS COLLECTOR CENTRAL EXCISE AND SALES TAX LAHORE (NOW COMMISSIONER INLAND REVENUE LTU, LAHORE). Ss. 36(1), 36(2) & 36(3) second proviso---Central Excises Act (I of 1944), S. 33(3)---Timeframe for passing order-in-original consequent to a show-cause notice---Failure in adhering to such mandatory timeframe by the authorities---Effect---Order-in-original would be barred by time---The pivotal question requiring determination before the Supreme Court was whether the timeframe provided for passing orders post issuance of show-cause notices was followed as required under the relevant statutes. Held: Despite two corrigenda issued, the events to invoke either Sections 36(1) and 36(2) of the Sales Tax Act, 1990 were not disclosed. It was only in the second corrigendum that Section 36(1) of the Act with the disclosing event required under the relevant law was introduced for the first time. Nonetheless, the record reflected that under the second proviso to Section 36(3) of the Act, the order under the relevant subsection was to be made within 120 days of the issuance of the show-cause notice or within such extended period as the Commissioner might, for reasons to be recorded in writing, fix, provided that such extended period in no case could exceed 60 days. The show-cause notice was issued on 30-06-2000 and in consideration thereof the order-in-original was passed on 02-02-2001, which was much beyond the timeframe required under the law. However, in the appeal relating to sales tax there was no extension in timeframe within Section 36(3) of the Act, thus, the order-in-original should have been passed in 120 days. The orders-in-original were time-barred. The appeal related to excise duty under the Central Excises Act, 1944 and related rules. The timeframe provided in the Act and related rules for passing an order post show-cause notice is 45 days under Section 33(3), which was flouted, hence the order-in-original in the appeal too was time-barred. The provisions prescribing the timeframe for passing an order-in-original consequent to a show-cause notice were held to be mandatory. The orders-in-original were barred by time. The impugned judgments were set aside and the appeals were allowed in the circumstances.

WAK LIMITED, MULTAN ROAD, LAHORE vs COLLECTOR CENTRAL EXCISE AND SALES TAX LAHORE (NOW COMMISSIONER INLAND REVENUE LTU, LAHORE) — 2026 PTD 505 SUPREME-COURT

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