IN THE SUPREME COURT OF PAKISTAN

(APPELLATE JURISDICTION)

PRESENT: MR. JUSTICE MIAN SAQIB NISAR, HCJ

MR. JUSTICE MAQBOOL BAQAR
MR. JUSTICE FAISAL ARAB

CIVIL APPEAL NOS.682 TO 684 OF 2008, 131,233,253,504,

219 & 220 OF 2011, 678-683, 783 & 729-732 OF 2012, 389-
401 & 710-713 OF 2013, 1632 OF 2014, 565 OF 2015 AND
1424-1425 & 2470 OF 2016
(on appeal against the judgments/orders dated 7.11.2007, 18.12.2007,
05.11.2008, 25.09.2009, 09.07.2009, 29.01.2009, 01.04.2008, 07.04.2008,
04.05.2012, 05.04.2012, 05.04.2012, 06.06.2012, 19.07.2012, 06.06.2012,
05.04.2012,13.07.2011, 05.04.2012, 07.12.2011, 10.09.2014, 21.01.2015,
17.11.2015, 22.03.216 of the Lahore High Court, Lahore passed in
W.P.13331/2006, S.T.R.68/2006, S.T.R.13/2007, S.T.A.5/2005, S.T.R.42/2006,
W.P.13499/2003, W.P.16171/2008, S.T.A.23/2006, S.T.A.2/2007,
S.T.R.44/2010, S.T.R.29/2010, S.T.R.144/2011, S.T.R.95/2010, S.T.R.36/2011,
S.T.R.26/2010, S.T.R.76/2010, STR 55/2009, S.T.R.82/2010, S.T.R.32/2010,
S.T.R.73/2010 S.T.R.22/2010, S.T.R.77/2009, S.T.R.21/2010, S.T.R.43/2010,,
S.T.R.85/2010, S.T.R.101/2010, S.T.R.21/2011, S.T.R.62/2011, S.T.R.68/2011,
S.T.R.69/2011, S.T.R.75/2011, S.T.R.70/2011, S.T.R.22/2011, S.T.R.83/2011,
S.T.R.130/2011, S.T.R.13/2011, S.T.R.114/2011, S.T.R.89/2014,
S.T.R.14/2015, S.T.R.194/2015, S.T.R.195/2015, S.T.R.58/2016 respectively)
AND
CIVIL APPEAL NO. 733 OF 2010
AND
CIVIL APPEAL NO. 1507 OF 2016

The Collector of Sales Tax, Gujranwala, etc. (in CAs 682/08

& 131/11)
Assistant Collector (C&E Division) Gujranwala, (in CA 683/08)
etc.
Dy. Collector of Sales Tax Gujranwala, etc. (in CA 684/08)
Abbasi Enterprises Unilever Distributor Haripur & (in CA 733/10)
another
The Collector of Sales Tax, & Federal Excise (in CAs 233/11)
Lahore
Collector of Sales Tax, Lahore (in CAs 253/11)
Collector of Sales Tax Faisalabad, etc. (in CAs 504/11)
Commissioner Inland Revenue, RTO, Faisalabad (in CAs 678-
683/12 &
710/13, 729-
732/12)
Commissioner Inland (Rev.) Legal Division (in CAs 389-
Regional Tax Office, Lahore 401/13)
Commissioner Inland Revenue Sialkot (in CA 711/13)
Director of intelligence & investigation FBR Lahore (in CA 712/13)
Commissioner Inland (Rev) Zone-I Regional Tax (in CAs 713/13)
Officer, Faisalabad
Commissioner Inland Rev. Zone-II, RTO, (in CAs 1632/14,
Faisalabad & 565/15, 1424,
& 1425 &
1507/16)
Commissioner Inland (Rev) Zone-III RTO, (in CA 2470/16)
Faisalabad
Collector of Customs Federal E & S Tax Multan (in CAs 219-
220/11)
Civil Appeal Nos. 682 of 2008 etc. -: 2 :-

…Appellant(s)
VERSUS
M/s. Super Asia Mohammad Din & Sons etc. (in CA 682/08)
M/s. Hanif Straw Board Factory, etc. (in CA
683,684/08)
The Collector of Sales Tax & Federal Excise, (in CA 733/10)
Peshawar & others
M/s. Farhan Plastic, etc. (in CA 131/11)
M/s. Meraj Din & Sons, etc. (in CA 233/11)
M/s. New Art Press (Pvt.) Ltd. etc. (in CA 253/11)
M/s. Tanvir Weaving (PVT) Ltd. etc. (in CA 504/11)
M/s Cresent Textile Mills Faisalabad (in CA 678/12)
M/s Fabritex International C/o. Kay Sons (Pvt) (in CA 679/12)
Ltd. Faisalabad & another
M/s Pharianwali Sugar Mills Ltd. Lahore etc. (in CA 680/12)
M/s Aftab Soap Factory, Faisalabad (in CA 681/12)
M/s Ihsan Yousaf Textile Mills (Pvt.) Ltd. Faisalabad (in CA 682/12)
M/s Sargodha Spinning Mills Ltd. Faisalabad (in CA 683/12)
M/s Fateh Habib Textile, Faisalabad & another (in CA 783/12)
M/s. Zahid Hafeez Re-Rolling Mills LHR, etc. (in CA 389/13)
M/s. Chimera (Pvt) , Ltd., etc. (in CA 390/13)
M/s. Ejaz & Co.,LHR, etc. (in CA 391/13)
M/s. D.S. Power Ltd. LHR, etc. (in CA 392/13)
M/s. Zahoor Cotton Mills. LHR, etc. (in CA 393/13)
M/s. Mirtex Enterprises, LHR, etc. (in CA 394/13)
M/s. Innovox Industries, LHR, etc. (in CA 395/13)
M/s. Hussain Cotex Ltd., LHR (in CA 396/13)
M/s Barkat Ali Steel Mills, LHR (in CA 397/13)
M/s. Barkat Ali Re-Rolling Mills, LHR (in CA 398/13)
M/s. Chaudhry Steel Re-Rolling Mills, LHR (in CA 399/13)
M/s. Javed Nazir Brothers (PVT) Ltd., LHR (in CA 400/13)
M/s. Al-Macca Press (Pvt.) Ltd., LHR, etc. (in CA 401/13)
M/s. Zeshan Energy Ltd. etc. (in CA 710/13)
M/s. Asad Brothers Sialkot (in CA 711/13)
M/s. Umer Textiles (in CA 712/13)
M/s. Crescent Textiles Mills Ltd. etc. (in CA 713/13)
M/s Idrees & Company, Chiniot & another (in CA 1632/14)
M/s Al-Haseeb Corporation, Faisalabad etc. (in CA 565/15)
M/s Master Textile Processing Mills, Faisalabad etc. (in CAs
1424,1425/16)
M/s Umer Brothers, Faisalaabad & another (in CA
1507/16)
M/s Karimi Traders, Faisalabad (in CA2470/16)
M/s. Joyia Sadat Cotton Industries (in CA 219/11)
M/s. Qadir Agro Industries (Pvt) Ltd. Multan etc. (in CA 220/11)
M/s Allah Tawakel Corporation Faisalabad etc. (in CA 729/12)
M/s Bashir Printing Industries (Pvt) Ltd Faisalabad etc. (in CA 730/12)
M/s Arfatex Industries (PVT.) Ltd. Faisalabad etc. (in CA 731/12)
M/s Mian Zafar & Co. & another (in CA 732/12)
…Respondent(s)

For the Appellant(s):

(in CAs 682-684/08, 131,
233, 253,504/11, 389-401/
13, 710, 711, 713/13, 219 Mr. Izhar-ul-Haq, ASC
& 220/11)
Civil Appeal Nos. 682 of 2008 etc. -: 3 :-

(in CAs 678-683/12, Dr. Farhat Zafar, ASC

783/12, 1632/14, 565/15, Mr. M. S. Khattak, AOR.
1424, 1425, 1507, 2470/16
& 729-732/12)
Raja Abdul Ghafoor, AOR.

(in CAs 733/10) Mr. Farhat Nawaz Lodhi, ASC

Raja Abdul Ghafoor, AOR.

(in CAs 712/13) Ch. M. Zafar Iqbal, ASC.

For the respondent(s):
(in CA 220/11) Nemo.

(in CAs 682/08, 397 Syed Naveed Andrabi, ASC.

and 398/13)

(in CA 733/10) Mr. Riaz Hussain Azam, ASC.

Mr. M. S. Khattak, AOR.

(in CAs 682-684/08) Mr. Waqar Azeem, ASC.

(in CA 131/11) Nemo.

(in CA 233/11) Nasir Mahmood Qureshi, ASC

(in CA 253/11) Nemo

(in CAs 504/11, 396, Mr. Muhammad Iqbal Hashmi, ASC

399, 710/13)

(in CAs 678/12, 713/13, Nemo.

683/12, 392/13)

(in CA 390/13) Mr. Shazib Masud, ASC

(in CA 400/13) Mian Ashiq Hussain, ASC

(in CAs 394, 401/13,

711/13, 1632/14,
2470/16, 565/15, 730/12, Nemo.
712/13, 732/12)

(in CA 1507/16) Mr. M. Ajmal Khan, ASC

(in CAs 219/11, 729/12, Ex-parte.
731/12,

(in CAs 679-682,783/12,

382, 391, 393, 395/13, N.R.
1424, 1425/16

Date of Hearing: 31.03.2017

…
JUDGMENT
MIAN SAQIB NISAR, CJ.- The facts pertaining to

these appeals, with the leave of the Court, are that the respondents are
Civil Appeal Nos. 682 of 2008 etc. -: 4 :-

manufacturing units/suppliers who made taxable supplies during

various tax years and filed sales tax returns for the relevant periods.

They were served with show cause notices under the erstwhile Sections

11 and 36 of the Sales Tax Act, 1990 (the Act) and later the current

Section 11 thereof. The orders-in-original were passed beyond the

period of limitation provided in law. Aggrieved, some respondents

approached the learned High Court directly by way of writ petitions,

whilst others challenged the orders before the Customs, Excise & Sales

Tax (Appellate) Tribunal (the Tribunal) which culminated in sales tax

references before the learned High Court. The learned High Court

allowed the writ petitions and the references alike through the

impugned judgments; holding that since the adjudicating authority

failed to decide the show cause notices within the statutory period

provided in the first provisos to the erstwhile Sections 11(4) and 36(3) of

the Act and the current Section 11(5) thereof, the orders were barred by

time. Leave was granted on 09.04.2008 in the following terms:-

“…whether the limitation of 45 days for completion of

adjudication proceedings under Finance Ordinance, 2000
enhanced to 90 days by the Finance Act, 2003 was
mandatory or directory in nature…”

2. The moot point is whether the limitation period contained

in the first provisos to the erstwhile Sections 11(4) and 36(3) of the Act

and the current Section 11(5) thereof for passing an order thereunder is

mandatory or directory in nature (note:- as the show cause notices and the orders

passed pursuant thereto were spread over a span of approximately 15 years, i.e. from 1998 to

2013, we shall discuss all the relevant provisions which were in force from time to time). The

relevant law read as under:-

Civil Appeal Nos. 682 of 2008 etc. -: 5 :-

Erstwhile Section 36
1
[36. Recovery of tax not levied or short-levied or
erroneously refunded.–
⁞
(3) The officer of 2[Inland Revenue] empowered in this
behalf shall, after considering the objections of the person
served with a notice to show cause under sub-section (1) or
sub-section (2), determine the amount of tax or charge
payable by him and such person shall pay the amount so
determined 3[:]

4
[Provided that order under this section shall be
made within 5[one hundred and twenty] days of issuance of
show cause notice or within such extended period as 6[the
7
[Commissioner] 8[* * *]] may, for reasons to be recorded
in writing, fix, provided that such extended period shall in
no case exceed 9[sixty] days 10[:]]

11
[Provided further that any period during which
the proceedings are adjourned on account of a stay order
or Alternative Dispute Resolution proceedings or the time
taken through adjournment by the petitioner not exceeding
thirty days shall be excluded from the computation of the
periods specified in the first proviso.]
⁞

Erstwhile Section 11
12
[11. Assessment of Tax.-
⁞

1
Substituted by the Finance Act, 1996. Omitted by the Finance Act, 2012.
2
Substituted for the words “Sales Tax” by the Finance Act, 2010. Earlier the same amendment was made by the
Finance (Amendment) Ordinance, 2010 and the Finance (Amendment) Ordinance, 2009.
3
Substituted for the full stop by the Finance Ordinance, 2000.
4
Proviso added by the Finance Ordinance, 2000.
5
Substituted for the word “ninety” by the Finance Act, 2008 which was substituted for the word “forty-five” by the
Finance Act, 2003.
6
Substituted for the words “an officer of Sales Tax” by the Finance Act, 2003.
7
Substituted for the word “Collector” by the Finance Act, 2010. Earlier the same amendment was made by the
Finance (Amendment) Ordinance, 2010 and the Finance (Amendment) Ordinance, 2009.
8
The words, commas and brackets “or, as the case may be, Collector (Adjudication)” omitted by the Finance Act,
2005.
9
Substituted for the words “one hundred and twenty” by the Finance Act, 2009 which was substituted for the word
“ninety” by the Finance Act, 2008.
10
Substituted for the full stop by the Finance Act, 2003.
11
Proviso added by the Finance Act, 2009.
12
Substituted by the Finance Act, 1996. Substituted for the Section 11 by the Finance Act, 2012.
Civil Appeal Nos. 682 of 2008 etc. -: 6 :-

(4) No order under this section shall be made by an officer

of 13[Inland Revenue] unless a notice to show cause is
given 14[within five years] to the person in default
specifying the grounds on which it is intended to proceed
against him and the officer of 15[Inland Revenue] shall take
into consideration the representation made by such person
and provide him with an opportunity of being heard 16[:]]

17
[Provided that order under this section shall be
made within 18[one hundred and twenty] days of issuance
of show cause notice or within such extended period as
19
[the 20[Commissioner] 21[* * *]] may, for reasons to be
recorded in writing, fix provided that such extended period
shall in no case exceed 22[sixty] days 23[:]]

24
[Provided further that any period during which
the proceedings are adjourned on account of a stay order
or Alternative Dispute Resolution proceedings or the time
taken through adjournment by the petitioner not exceeding
thirty days shall be excluded from the computation of the
periods specified in the first proviso.]
⁞

Current Section 11
25
[11. Assessment of Tax and recovery of tax not levied or
short-levied or erroneously refunded.―
⁞
(5) No order under this section shall be made by an officer
of Inland Revenue unless a notice to show cause is given
within five years to the person in default specifying the

13
Substituted for the words “Sales Tax” by the Finance Act, 2010. Earlier the same amendment was made by the
Finance (Amendment) Ordinance, 2010 and the Finance (Amendment) Ordinance, 2009.
14
The words inserted by the Finance Act, 2008.
15
Substituted for the words “Sales Tax” by the Finance Act, 2010. Earlier the same amendment was made by the
Finance (Amendment) Ordinance, 2010 and the Finance (Amendment) Ordinance, 2009.
16
Substituted for the full stop by the Finance Ordinance, 2000.
17
Proviso added by the Finance Ordinance, 2000.
18
Substituted for the word “ninety” by the Finance Act, 2008 which was substituted for the word “forty-five” by the
Finance Act, 2003.
19
Substituted for the words “an officer of Sales Tax” by the Finance Act, 2003.
20
Substituted for the word “Collector” by the Finance Act, 2010. Earlier the same amendment was made by the
Finance (Amendment) Ordinance, 2010 and the Finance (Amendment) Ordinance, 2009.
21
The words, commas and brackets “or, as the case may be, Collector (Adjudication)” omitted by the Finance Act,
2007.
22
Substituted for the words “one hundred and twenty” by the Finance Act, 2009 which were substituted for the word
“ninety” by the Finance Act, 2008 which was substituted for the word “forty-five” by the Finance Act, 2003.
23
Substituted for the full stop by the Finance Act, 2009.
24
Proviso added by the Finance Act, 2009.
25
Substituted by the Finance Act, 2012.
Civil Appeal Nos. 682 of 2008 etc. -: 7 :-

grounds on which it is intended to proceed against him and

the officer of Sales Tax shall take into consideration the
representation made by such person and provide him with
an opportunity of being heard:

Provided that order under this section shall be

made within one hundred and twenty days of issuance of
show cause notice or within such extended period as the
Commissioner may, for reasons to be recorded in writing,
fix provided that such extended period shall in no case
exceed ninety days:

Provided further that any period during which the

proceedings are adjourned on account of a stay order or
Alternative Dispute Resolution proceedings or the time
taken through adjournment by the petitioner not exceeding
thirty days shall be excluded from the computation of the
period specified in the first proviso.
⁞

26
[74. Condonation of time-limit.–Where any time or
period has been specified under any of the provisions of the
Act or rules made thereunder within which any application
is to be made or any act or thing is to be done, the
27
[Board] may, in any case or class of cases, permit such
application to be made or such act or thing to be done
within such time or period as it may consider appropriate
28
[:]

29
[Provided that the Board may, by notification in
the official Gazette, and subject to such limitations or
conditions as may be specified therein, empower a
30
[Commissioner] to exercise the powers under this section
in any case or class of cases.]]

31
[Explanation.– ………………………………………]

26
Added by Finance Ordinance, 2002.
27
Substituted for the words “Central Board of Revenue” by the Finance Act, 2007.
28
Substituted for the full stop by the Finance Act, 2004.
29
Proviso added by the Finance Act, 2004.
30
Substituted for the word “Collector” by the Finance (Amendment) Ordinance, 2009, the Finance (Amendment)
Ordinance, 2010 and the Finance Act, 2010.
31
Explanation added by the Finance Act, 2011.
Civil Appeal Nos. 682 of 2008 etc. -: 8 :-

Since the first provisos to the erstwhile Sections 11(4) and 36(3) of the

Act and the current Section 11(5) of the Act are identical, save for the

time limit prescribed and the officers mentioned therein, we are using

the erstwhile Section 36(3) (as originally inserted in the Act) as notionally

representative of the other sections and any reference to the said

provision and the terms used therein are to be taken to include the

corresponding provisions and terms of the erstwhile Section 11(4) and

the current Section 11(5) of the Act and the subsequent amendments

made therein from time to time (unless stated otherwise).

3. The learned counsel for the petitioner/department argued

that once the first proviso to Section 36(3) of the Act had been inserted,

a time frame came to be prescribed for the officer of Sales Tax (the

‘officer’) to pass an order under the said section and the same is not

mandatory but rather directory especially considering that this period

can be extended by the Collector under the first proviso itself and by the

Board (or Collector notified by the Board) under Section 74 of the Act. He was

of the opinion that the order passed by the officer after the stipulated

period would not be vitiated merely on the ground that it had been

passed beyond such time frame; therefore, the impugned orders of the

learned High Court were liable to be set aside. Conversely, the learned

counsel for the respondents submitted that the word ‘shall’ appearing in

the first proviso to Section 36(3) of the Act rendered the provision

mandatory and the officer was bound to pass the order within the

stipulated period. Further, whilst time could be extended under the Act,

such extension could not be for an unlimited period but only for the

period specified therein.

4. The first proviso to Section 36(3) of the Act (as it stood at the time

it was inserted) stipulated that orders passed thereunder ‘shall be made

Civil Appeal Nos. 682 of 2008 etc. -: 9 :-

within forty-five days’ of the issuance of the show cause notice or

within such extended period as the officer may, for reasons to be

recorded in writing, fix, provided that such extended period ‘shall in no

case exceed ninety days’. There were basically two time frames: (i) a

period of forty-five days within which the officer was to pass an order

under Section 36 of the Act; and (ii) a period of ninety days which was

the maximum period for which the officer could grant extension of time

(with reasons recorded in writing) for passing of the order under Section 36

supra. The word ‘shall’ as opposed to ‘may’ has been used on both

occasions when prescribing the maximum time period in the first

proviso. It is settled law that when the word ‘shall’ is used in a provision

of law, it is to be construed in its ordinary grammatical meaning and

normally the use of word ‘shall’ by the legislature brands a provision as

mandatory32, especially when an authority is required to do something

in a particular manner. Reference in this behalf may be made to the

case of Haji Abdul Karim and others Vs. Messrs Florida Builders

(Pvt) Limited (PLD 2012 SC 247) wherein, whilst interpreting Order

VII Rule 11 of the Code of Civil Procedure, 1908, this Court held that

the Courts were bound by the word ‘shall’ used therein which made it

mandatory to reject a plaint if it appeared from the statements in the

plaint that it was barred by any law. In effect the deployment of the

word ‘shall’ in this context denuded the Courts of their discretion in this

behalf. Similarly, in the judgment reported as Safeer Travels (Pvt.)

Ltd. Vs. Muhammad Khalid Shafi through legal heirs (PLD 2007 SC

504) it was held with regard to Section 16(2) of the Sindh Rented

Premises Ordinance, 1979 that the word ‘shall’ made it obligatory for

the Court to strike off a defence in case of default. Therefore we find

32
See the case of Mian Muhammad Nawaz Sharif Vs. President of Pakistan and others (PLD 1993 SC 473).
Civil Appeal Nos. 682 of 2008 etc. -: 10 :-

that the use of the word ‘shall’ is a strong indicator that the provisos in

question are mandatory in nature.

5. Learned counsel for the appellants argued that the word

‘shall’ is not always to be construed as mandatory but rather the

determining factor is whether non-compliance with a provision entails

penal consequences or not. He stated that since no such consequences

flowed from Section 36(3) of the Act thus the proviso was directory

notwithstanding the fact that the word ‘shall’ was used therein.

6. The ultimate test to determine whether a provision is

mandatory or directory is that of ascertaining the legislative intent.

While the use of the word ‘shall’ is not the sole factor which determines

the mandatory or directory nature of a provision, it is certainly one of

the indicators of legislative intent. Other factors include the presence of

penal consequences in case of non-compliance, but perhaps the

clearest indicator is the object and purpose of the statute and the

provision in question. It is the duty of the Court to garner the real

intent of the legislature as expressed in the law itself. Reference may be

made to the cases of Syed Zia Haider Rizvi and others Vs. Deputy

Commissioner of Wealth Tax, Lahore and others (2011 SCMR 420),

in Re. Presidential Election, 1974 (AIR 1974 SC 1682), Lachmi

Narain Vs. Union of India (AIR 1976 SC 714), and Dinesh Chandra

Pandey Vs. High Court Of Madhya Pradesh and another [(2010) 11

SCC 500].

7. From the plain language of the first proviso, it is clear that

the officer was bound to pass an order within the stipulated time period

of forty-five days, and any extension of time by the Collector could not

in any case exceed ninety days. The Collector could not extend the time

according to his own choice and whim, as a matter of course, routine or

Civil Appeal Nos. 682 of 2008 etc. -: 11 :-

right, without any limit or constraint; he could only do so by applying

his mind and after recording reasons for such extension in writing.

Thus the language of the first proviso was meant to restrict the officer

from passing an order under Section 36(3) supra whenever he wanted.

It also restricted the Collector from granting unlimited extension. The

curtailing of the powers of the officer and the Collector and the negative

character of the language employed in the first proviso point towards its

mandatory nature. This is further supported by the fact that the first

proviso was inserted into Section 36(3) supra through an amendment

(note:- the current Section 11 of the Act, on the other hand, was enacted with the proviso from

its very inception in 2012). Prior to such insertion, undoubtedly there was no

time limit within which the officer was required to pass orders under

the said section. The insertion of the first proviso reflects the clear

intention of the legislature to curb this earlier latitude conferred on the

officer for passing an order under the section supra. When the

legislature makes an amendment in an existing law by providing a

specific procedure or time frame for performing a certain act, such

provision cannot be interpreted in a way which would render it

redundant or nugatory. Thus, we hold that the first proviso to Section

36(3) of the Act [and the first proviso to the erstwhile Section 11(4) and the current Section

11(5) of the Act] is/was mandatory in nature.

8. As regards the submission of the learned counsel for the

appellants that the time period in the first proviso was only meant to

ensure that orders were passed within a reasonable time and in fact,

the orders could have been passed beyond the stipulated time period if

the department were able to show that special circumstances existed

warranting the same, suffice it to say that there is no justification

whatsoever to read ‘special circumstances’ and ‘reasonable time’ into

Civil Appeal Nos. 682 of 2008 etc. -: 12 :-

the said proviso. It is settled law that the principle of reading in or

casus omissus is not to be invoked lightly, rather it is to be used

sparingly and only when the situation demands it. In fact the Courts

should refrain from supplying an omission in the statute because to do

so steers the Courts from the realms of interpretation or construction

into those of legislation.33 This principle has been aptly dealt with by

this Court in judgment reported as Abdul Haq Khan and others Vs.

Haji Ameerzada and others (PLD 2017 SC 105) in which it was

observed that:-

The reading in of words or meaning into a statute when its

meaning is otherwise clear is not permissible. As a matter
of statutory interpretation, Courts generally abstain from
providing casus omissus or omissions in a statute, through
construction or interpretation. An exception to this rule is,
when there is a self-evident omission in a provision and the
purpose of the law as intended by the legislature cannot
otherwise be achieved, or if the literal construction of a
particular provision leads to manifestly absurd or
anomalous results, which could not have been intended by
the legislature. However, this power is to be exercised
cautiously, rarely and only in exceptional circumstances.

Therefore, we find that the wording of the first proviso to Section 36(3)

of the Act contained no ambiguity or obscurity warranting reading in of

the aforesaid phrases.

9. Another aspect of the matter is that when a statute requires

that a thing should be done in a particular manner or form, it has to be

done in such manner. But if such provision is directory, the act done in

breach thereof would not be void, even though non-compliance may

entail penal consequences. However, non-compliance of a mandatory

provision would invalidate such act. In this context, reference may be

33
Principles of Statutory Interpretation (13th Ed.) by Justice G. P. Singh.
Civil Appeal Nos. 682 of 2008 etc. -: 13 :-

made to the case of Rubber House Vs. Excellsior Needle Industries

Pvt. Ltd. (AIR 1989 SC 1160). Thus, having held the first proviso to

Section 36(3) supra to be mandatory, the natural corollary of non-

compliance with its terms would be that any order passed beyond the

stipulated time period would be invalid.

10. Learned counsel for the appellants submitted that in terms

of the second proviso to Section 36(3) of the Act, the time consumed by

virtue of stay orders or adjournments not exceeding thirty days was

to be excluded from the calculation of the time period in the first

proviso. We find that such exclusion could not exceed 30 days as per

the clear mandate of the provision itself.

11. Learned counsel for the appellants also stated that the

Collector under the first proviso to Section 36(3) of the Act was

empowered to grant extensions. Learned counsel for the respondent

argued that the Collector could only extend time during the subsistence

of the time limit provided in the former part thereof, accordingly, as per

Section 36(3) of the Act, once the time period of forty-five days for

passing the order under the section ibid had passed, no extension could

be granted. We do not find any force in this argument. Undoubtedly the

Collector has the power to grant extensions which cannot exceed ninety

days, as is manifest from the wording of the latter part of the first

proviso, however it is not incumbent upon the Collector to extend the

time within the currency of the initial time period of forty-five days: it is

entirely possible to extend the time even after the expiry of the initial

time period but the critical period in this regard is ninety days because

at the expiry of this maximum period time cannot be further extended.

By way of illustration, as per the first proviso to Section 36(3) of the Act,

if an officer fails to pass an order within forty-five days (the initial time
Civil Appeal Nos. 682 of 2008 etc. -: 14 :-

period), the Collector need not grant an extension within such forty-five

days, instead he can do so after the said number of days. However,

since the latter part of the first proviso only allows him to grant an

extension of ninety days, thus any extension granted must not exceed

the maximum limit of one hundred and thirty five days (forty-five plus

ninety) from the date of the show cause notice.

12. As regards the reliance placed on Section 74 of the Act, it

provides that where a time frame has been stipulated in the Act within

which an act or thing is to be done, the Board, or the Commissioner

notified by the Board, are empowered to permit such act or thing to be

done within such time period as they may consider appropriate. Passing

an order under Section 36(3) of the Act is certainly an act or thing to be

done under the Act. Therefore the Board (which expression shall hereinafter

include Commissioner notified by the Board) has the power under Section 74 of

the Act to permit the passing of an order under the aforesaid section

within such time period as it may consider appropriate. While applying

the principles of harmonious construction, we find that the proviso is

restricted in its application to the section it is attached to, whereas

Section 74 of the Act is of general applicability and shall apply to all the

provisions of the Act and the rules framed thereunder. This provision

will undoubtedly have an overriding effect over the first proviso to

Section 36(3) supra and can be held to be an exception thereto. The

purpose of Section 74 supra is to give a separate overriding power to the

Board to permit any act or thing to be done under the statute within

such time period as it may deem appropriate, which undoubtedly is

independent of any other provision of the Act which provides a time

frame. To restrict the time period that can be granted under Section 74

supra to the maximum period available under the first proviso to

Civil Appeal Nos. 682 of 2008 etc. -: 15 :-

Section 36(3) of the Act would render the former absolutely redundant

and superfluous, which cannot be countenanced under the settled rules

of interpretation which do not allow such redundancy to be attributed

to the legislative intent. Therefore, where the Board has permitted the

passing of an order under the proviso within a time frame different from

that contained therein, this new time frame shall be deemed to be the

relevant one. However this does not mean that in exercise of its power

under Section 74 of the Act, the Board will have unfettered and

unbridled authority to extend time when, and for however long, it feels

it expedient to do so. Rather time would only be extended in certain

cases, after application of mind and that too for a reasonable amount of

time. For the purposes of settling the reasonable time, we hold that

after the expiry of the two time periods envisaged by the first proviso to

Section 36(3) of the Act, i.e. forty-five days [within which the order under Section

36 of the Act is to be passed] and a further ninety days [extended period under the first

proviso to Section 36(3) ibid], the Board should have six months within which

it may grant extension of time under Section 74 supra which (extension)

can also not exceed six months. If the reasonable time mentioned above

also lapses, then the rule of past and closed transaction shall apply

because it is inconceivable in law that:- (a) the Board would have

infinite and unlimited time within which it can grant extensions under

Section 74 supra; and (b) the Board can grant infinite and unlimited

extension under Section 74 ibid; to obliterate the vested rights that

stand created in favour of the taxpayer on account of such lapse of

time. In this respect, the judgment reported as Federal Land

Commission through Chairman Vs. Rais Habib Ahmed and others

(PLD 2011 SC 842) is relevant in which this Court, while relying upon

the settled principles of past and closed transaction and reasonable

Civil Appeal Nos. 682 of 2008 etc. -: 16 :-

time, stipulated that a period of six months was the reasonable time for

the purposes of exercise of power by the Federal Government under

Section 25 of the Land Reforms Act, 1977. Thus we are of the opinion

that while undoubtedly the Board has the power under Section 74

supra to extend the time limit and permit an order under Section 36

supra to be passed within such time or period as it may consider

appropriate, such power must be exercised within a reasonable time

period of six months from the date when the time period provided in the

first proviso to Section 36(3) supra and the extension granted

thereunder have lapsed, and such power can only be exercised (by the

Board under Section 74 supra) to grant an extension of not more than a

reasonable time period of six months.

13. In view of the findings given hereinabove, it is appropriate

to consider the relevant facts of each case which are tabulated below:-

Civil Date of
Date of order in Limitation
Appeal show cause Observations
original period
No. notice
682/2008 06.04.1998 No order passed as yet. 90 days Beyond time
683/2008 22.06.2000 24.02.2004 45 days Beyond time
684/2008 19.06.2000 30.10.2000 45 days Beyond time
131/2011 06.04.2002 31.07.2002 45 days Beyond time
233/2011 31.05.2004 02.01.2006 90 days Beyond time
253/2011 21.11.2001 20.08.2003 45 days Beyond time
504/2011 23.04.2005 28.03.2006 90 days Beyond time
219/2011 09.09.2004 30.04.2005 90 days Beyond time
220/2011 17.05.2002 28.10.2002 45 days Beyond time
678/2012 07.11.2001 23.07.2003 45 days Beyond time
679/2012 11.12.2006 23.10.2008 90 days Beyond time
680/2012 27.11.2001 08.05.2002 45 days Beyond time
681/2012 19.07.2001 18.10.2001 45 days Beyond time
682/2012 20.03.2006 30.12.2006 90 days Beyond time
683/2012 12.02.2002 30.05.2002 45 days Beyond time
783/2012 15.11.2007 20.09.2008 90 days Beyond time
729/2012 09.08.2003 31.03.2005 90 days Beyond time
730/2012 19.02.2009 13.10.2009 120 days Beyond time
731/2012 09.08.2003 24.11.2004 90 days Beyond time
732/2012 06.11.2006 14.12.2007 90 days Within time
Civil Appeal Nos. 682 of 2008 etc. -: 17 :-

(extension
granted by the
Board)
389/2013 04.03.2002 30.11.2005 45 days Beyond time
390/2013 12.04.2001 17.08.2001 45 days Beyond time
391/2013 19.05.1999 17.06.2004 45 days Beyond time
392/2013 10.11.2004 12.10.2005 90 days Beyond time
393/2013 12.12.2002 11.11.2004 45 days Beyond time
394/2013 17.10.2008 12.02.2009 120 days Within time
395/2013 22.10.2007 28.02.2008 90 days Beyond time
396/2013 13.03.2004 18.05.2005 90 days Beyond time
397/2013 10.03.2004 10.06.2005 90 days Beyond time
398/2013 28.06.2003 20.03.2004 90 days Beyond time
Before
No limitation
399/2013 21.09.1998 19.06.1999 insertion of
period
proviso
400/2013 07.05.2005 06.10.2005 90 days Beyond time
401/2013 21.05.2005 21.10.2005 90 days Beyond time
710/2013 28.11.2007 30.12.2008 90 days Beyond time
711/2013 22.04.2005 26.12.2006 90 days Beyond time
Within time
(extension
712/2013 28.05.2007 12.09.2008 90 days
granted by the
Board)
713/2013 17.12.2004 16.05.2005 90 days Beyond time
1632/2014 09.08.2003 06.04.2004 90 days Beyond time
565/2015 16.05.2003 12.06.2004 45 days Beyond time
1424/2016 15.05.2012 05.10.2012 120 days Beyond time
1425/2016 14.03.2012 04.10.2012 120 days Beyond time
2470/2016 14.12.2012 19.04.2013 120 days Beyond time

14. While dictating the judgment, it came to our attention that

in Civil Appeal No.394/2013, the show cause notice was issued on

17.10.2008 while the order was passed on 12.02.2009 which was

within the limitation period of 120 days. In Civil Appeal No.399/2013,

the show cause notice was issued on 21.09.1998 and the order was

passed on 19.06.1999 therefore the matter pertained to the time period

when the proviso containing the limitation period was not yet inserted

into the Act hence, such limitation period did not apply thereto. In Civil

Appeal No.712/2013, the show cause notice was issued on 28.05.2007

and the order was passed on 09.09.2008. However there are letters of
Civil Appeal Nos. 682 of 2008 etc. -: 18 :-

the Board on record suggesting that the time period was extended up

till 30.09.2008 under the second proviso to Section 45(1) read with

Section 74 of the Act. Thus the order was passed within time. Similarly,

in Civil Appeal No.732/2012, the show cause notice was issued on

06.11.2006 and the order was passed on 14.12.2007, whereas there is

a letter of the Board on record indicating that the time period was

extended up till 31.12.2007 under the provisions ibid hence the order

was passed within time. Therefore these four noted appeals are

separated from the rest of the cases and the office is directed to fix them

for re-hearing.

15. In the remaining appeals, all the orders of the officers were

time barred as they were passed beyond the time period provided in the

respective law existing at the relevant point in time and there is no

material on the record in any of the cases suggesting that time was

extended [under the second part of the first proviso to Section 36(3) of the Act or Section 74

thereof] for passing an order under Section 36 of the Act or that there

was any stay order or adjournment granted on the request of the

assessee [under second proviso to Section 36(3) of the Act] warranting exclusion of

a period of 30 days from the limitation period in the first proviso,

therefore, Civil Appeal Nos.682 to 684 of 2008, 131, 233, 253, 504, 219

and 220 of 2011, 678 to 683, 783 and 729 to 731 of 2012, 389 to 393

and 395 to 398, 400, 401, 710, 711 and 713 of 2013, 1632 of 2014,

565 of 2015 and 1424 to 1425 and 2470 of 2016 are dismissed.

16. The above are the detailed reasons for our short order of

even date which reads as under:-

“For the reasons to be recorded later and without in any

manner limiting our jurisdiction to appropriately enlarge
the scope of the detailed judgment, we hold that the
Civil Appeal Nos. 682 of 2008 etc. -: 19 :-

provisions of Section 11 and the erstwhile Section 36 of the

Sales Tax Act, 1990 (the Act) are mandatory in nature. The
Collector/Commissioner has the power to extend the time
within which an order under either of the Sections supra is
to be passed; besides, such time can also be extended in a
particular case or class of cases by the Federal Board of
Revenue (or the Commissioner if empowered by the said Board)
as per the provisions of Section 74 of the Act. In the light of
the above, all these petitions (except Civil Appeals No.
733/2010 and 1507/2006) are dismissed on the above
question of law.

C. As.733/2010 AND 1507/2016

Due to their peculiar facts, these cases are

separated from the aforementioned cases and are to be re-
listed.”

CHIEF JUSTICE

JUDGE

JUDGE
ISLAMABAD.
31st March, 2017.
Approved for reporting
Mudassar/