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Customs, Excise, VAT Appellate Tribunal order set aside

.
High Court Division
(Special Original .Jurisdiction)
Md Ashfaqul Islam J
SM Emdadul Hoque J
Judgment
February 28th, 2011
Shah Cement Industries Limited ........... . Petitioner.
vs
Chairman, Customs, Excise and VAT Appeal
Tribunal and others ........
............... Respondents
Value Added Tax (XXII of 1991
Section 5(2)
Section 5(2) of the Act gives a right to manufacturer to declare base value which can be interfered with by the VAT authority as a whole in exercise of power given under rule 3 read with section 72 of the VAT Act. Section 72 of the Act stated that for the purpose of Act government may frame Rules. If we glean all these provisions i.e section 5(2) we find that the base value declared under section 5(2) can be reduced or enhanced by the authority in terms of rule 3 that is to say that while exercising the power under rule 3, as it has been done in the instant case. While doing so the VAT authority can take into consideration all the variables properly to give a correct decision in terms of the provisions. ...... (10)
Ramzan Ali Sikder with Abdullah Mahmood Hasan and Ms Maherin Islam Khan, Advocate-For the Petitioner.
Pratikar Chakma with, KM Masud Rumy, Assistant Attorney-General - For the Respondent No.4.
Judgment
Md Ashfaqul Islam J : At the instance of the petitioner Shah Cement Industries Limited, this Rule Nisi was issued calling upon the respondents to show cause as to why the order bearing bw_ bs wmBwfwU/‡KBm (f¨vU) XvKv-92/2003/164(1-5)  dated 03-04-2004 (Annexure-G) passed by respondent No. I affirming the order bearing bw_ bs-4/g~mK (26) kvn wm‡g›U/g~j¨ Abyt/‡UK/2002/3171(6) dated 19-07-2003 (Annexure-E-I) passed by respondent No.2 allowing the application in part and the order bearing bw_ bs-4/wm‡g›U (6)5/ f¨vU/ 2000/Ask-1/1415  date 1-6-2003 (Annexure D) passed by respondent No.4 fixing the retail price at an inflated rate and in a discriminatory manner should not be declared to have been passed without any lawful authority and is of no legal effect and as to why the respondents should not be directed to realize VAT on that declared price at Tk. 165.45 per 50 kg bag of cement from the petitioner.
2. The background leading to the issuance of Rule, in short is that the petitioner is a cement manufacturing. company having a VAT registration. The petitioner impugns (i) the order bearing bw_ bs-4/wm‡g›U (6)5/f¨vU/2000/Ask-1/1415 dated 01-06-2003 (Annexure-D) passed by respondent No.4 fixing the retail price of the goods at Tk.l77 per 50 kg bag for the purpose of VAT (ii) order bearing bw_ bs-4/g~mK (26) kvn wm‡g›U/ g~j¨ Abyt/ ‡UK/2002/ 3171(6) dated 19-7-2003 (Annexure-E-l) passed by respondent No.2 refixing the rate of retail price at Taka 174 per 50 kg bag (iii) order and decision bearing bw_ bs-wmBwfwU/ †KBm (f¨vU) XvKv- 92/2003/164 (1-5) dated 3-4-2004 (Annexure-G) passed by respondent No. 1 Customs Excise and VAT Appellate Tribunal affirming both the orders dated 1-6-03 (Annexure-D) and 19-7-03 (Annexure-E1) passed by the respondent No.4 and, 2 respectively. The aforesaid orders and decisions are collectively referred to as "impugned orders".
3. Factual aspect of the case is that respondent No.6, NBR decided to add the value on the Portland Cement on regional basis at the following rate:
(K) cÖwZ 50 †KwR IRb wewkó †cvU©j¨vÛ wm‡g‡›Ui g~j¨ ms‡hvR‡bi cwigvY AÂj wfwËK wbgœiƒcfv‡e wba©viY Kiv hv‡et
1)    XvKv AÂj t45 UvKv
2)    PÆMÖvg AÂj t 40 UvKv
3)    Lyjbv I Ab¨vb¨ AÂj t 37 UvKv
(L) GB cÎ Rvixi ci mKj wm‡g›U Drcv`K cÖwZôvb DcKiY Drcv`b mnMmn b~Zb g~j¨ †NvlYv cÎ `vwLj Ki‡ebÓ
4. The above decision of the respondent No.6 was communicated to the respondent No.2 vide its office letter dated 22-9-2002 (Annexure-A). In terms of the recommendation dated 22-9-2002 and in accordance with the provisions of Rule 3(1) of the VAT Rules, 1991 the petitioner on 17-5-2003 submitted its price declaration in the prescribed VAT Form-I declaring the retail price of its Cement (the goods) at Tk 120.45 per bag containing 50 kg of cement including all costs of the manufacturer except VAT. The retail price of the goods inclusive VAT was stated as Taka 65.45 (Taka 120.45 price + Taka 45 value added on the price) (Annexure-"B").
5. Pursuant to the letter dated 25-5-2003 of the respondent No.4, the petitioner appeared in the hearing and explained in detail the reasons for declaring Taka 165 as its retail price.
The petitioner categorically stated all the material costs for producing per bag of cement containing 50 kg excluding the amount deducted by way of rebate for electricity bill. The petitioner further stated that even though the petitioner incurs other expense amounting to 28% per bag, the petitioner added Taka 45 as determined and fixed by the respondent No.6, N B R. Thus the petitioner justified the declared price (Annexure-"B") and complied with the order dated 22-9-2002 (Annexure-A). The petitioner also submitted its statements under cover of its letter dated 28-5-2003 to the respondent No.4 (Annexure-"C" and "C- I "). After declaration of the price (Annexure-B), the respondent No.4 issued its office order dated 1-6-2003 fixing the retail price at Taka 177 per bag containing 50 kg Cement for VAT purpose.
6. The petitioner being aggrieved filed an application dated 4-6-2003 (received on 5-7-2003) for review of the decision dated 1-6-2003 (Annexure-D) under Rule 3(7) of the Rules. The respondent No.2, on hearing the application for review though accepted the submissions of the petitioner, but passed its order dated 19-7-2003 allowing the petitioner's objection in part and reduced the amount of retail price from Taka 177 to Taka 174.
The petitioner preferred an appeal on 7-8-2008 before the respondent No. I, Customs, Excise and VAT Appellate Tribunal, Dhaka. The Tribunal upon hearing the appeal affirmed the decision of the Commissioner of Customs dated 19-7-2003 by the impugned order dated 3-4-2004 against which the petitioner has obtained the present Rule.
7. Mr Ramzan Ali Sikder with Mr Abdullah M Hasan, the learned counsel appearing on behalf of the petitioner after taking us with the petition, different Annexures with it mainly submits that the impugned order dated 3-4-2004 (Annexure-G) have been passed without lawful authority inasmuch as the respondent No.1, Appellate Tribunal failed to consider the fact that the petitioner filed the aforesaid appeal under section 42 of the VAT Act impugning the Order dated 19-7-2003 passed by the respondent No.2, for not approving the price as declared by the petitioner. The petitioner demanded justice for unlawful determination/fixation of the amount of Taka 174 by the 'respondent No. 2 on which VAT was payable. But the respondent No. I without applying its judicial mind affirmed the order dated 19-7-2003 (Annexure-E-I) passed by the respondent No. 2 and the order dated 1-6-2003 (Annexure-"D") issued by the respondent No. 4 which is self-contradictory and erroneous and are liable to be declared to have been issued without lawful authority and have no legal effect. In support of their contention, they relied on the decision of Chittagong Cement Clinker vs NBR, 60 DLR 287. In elaborating his submissions the learned counsel further argued that the impugned orders have been passed without lawful authority in as much as the respondent No. I, Tribunal in passing the impugned order failed to consider that the respondents wrongly decided and approved the price of the petitioner's goods at Taka 177 that includes an excess amount of Taka 11.55 (Taka I77-Taka 165.45. If that excess amount is payable, it would amount to VAT on VAT and thus the impugned orders are liable to be