Power of FBR to grant extension ‘narrower’: SC

TERENCE J SIGAMONY

ISLAMABAD: The Supreme Court noted that the power of Federal Board of Revenue (FBR) under Section 179(4) of the Customs Act, 1969 to grant extension of time is much narrower and circumscribed.

A three-judge bench, headed by Justice Munib Akhtar, ruled that while hearing an appeal of Director, Directorate General, Intelligence and Investigation (Customs) against the decision of the Sindh High Court (SHC), and dismissed it.

Dr Farhat Zafar, representing the petitioner (DG Intelligence and Investigation (Customs) submitted that in this case an extension of time was granted by the FBR and therefore, the impugned decision of the SHC is not sustainable. She relied on paragraphs 11 and 12 of the judgment of larger bench of the Supreme Court, which upheld the principles laid down in the case of Collector of Sales Tax, Gujranwala and others v Messrs Super Asia Mohammad Din and Sons and others 2017 SCMR 1427 (Super Asia).

The court noted that these paras dealt with Section 74 of the Sales Tax Act, 1990, and considered the possibility of the grant of an extension of time in terms thereof. Section 74 was held to apply in terms as stated in para 12 of the judgment in Super Asia.

The judgment said this matter (extension of time) has arisen under the Customs Act, 1969, which Section 179 (4) says; “The Board shall have the powers to regulate the system of adjudication including transfer of cases and extension of time-limit in exceptional circumstances.”

The court noted that the power to grant an extension by the Board under Section 179(4) of the Customs Act, 1969, is circumscribed, and is to be exercised only in “exceptional circumstances”. On the other hand, Section 74 of the 1990 Act provides that the Board is empowered to grant an extension to the extent found “appropriate”.

The court said that there is an obvious and clear difference between the two provisions; the power under Section 179(4) is much narrower and circumscribed. Therefore, the paragraphs of Super Asia sought to be relied upon by counsel for the petitioner have no relevance. It stated that the Larger Bench has also made some observations with regard to Section 74 of the Sales Tax Act, 1990.

The judgment also said that, on a query from the Court, the counsel for the petitioner has candidly stated that the permission/ letter of extension that was granted by the Board was not placed on the record before the Appellate Tribunal. The judgment said that indeed, this was specifically noted by the Tribunal in its order; i.e., “However, the plea taken by the respondents is that they have taken approval from FBR as mentioned in Section 179(4) but no such approval was placed before the Tribunal”.

The court noted that the matter came before it from a tax reference and it is well established that beyond the stage of the Appellate Tribunal, it is only questions of law that can be taken to the High Court. It is also well settled that the record on the basis of which the questions of law can be decided is in terms of the record as it stood before the Appellate Tribunal.

The judgment said that record cannot be added to and certainly not on a point that requires factual determination. Since the position is that the FBR letter by which it is claimed extension of time was granted by the Board was never placed on the record before the Appellate Tribunal, it is impermissible for any reliance to be placed on the same in this Court.

The Court; therefore, declined to entertain this point, saying; “Any departure from the well settled position would allow a party to a tax reference to alter the record either before the High Court or this Court which is not permissible.”