Law: Federal Excise Act, 2005

Section: 14(1)

 Summary The Appellate Tribunal Inland Revenue had set aside/rejected proceedings on the ground that the show-cause notice was time-barred under Section 14(1) of the Federal Excise Act, 2005. The limitation period had originally been three years but was later extended to five years through the Finance Act, 2011 (effective from 01.07.2011). The High Court held that since the amendment extending limitation was introduced before the expiry of the original limitation period, no vested right accrued to the taxpayer. Therefore, the proceedings initiated within the extended limitation period were valid. The Tribunal’s finding on limitation was declared unsustainable, and the matter was remanded for decision on merits. Tagline “Extension of limitation period before expiry creates no vested right; amended limitation applies retrospectively to pending proceedings.” ORDER; BABAR SATTAR, J.- This reference arises from an order of the Appellate Tribunal Inland Revenue (“Tribunal”) dated 15.08.2016. The questions framed for our consideration are as follows: Whether on the facts and circumstances of the case the Appellate Tribunal was justified to allow appeal holding that the order in original was barred by time when the order was passed within the limitation provided in section 14(1) of the Federal Excise Act, 2005? Whether a case where limitation had not expired when amendment in section 14(1) was introduced through Finance Act, 2011 effective from 01.07.2011 can be classified as past and closed transaction? The learned counsel for the applicant relied on the law laid down by the Sindh High Court in Summit Bank Limited vs. Sindh and others (2022 PTD 1279) for the propositionthat to the extent that the Show-Cause Notice in terms of Section 14(1) of the Federal Excise Act, 2005, was issued within a period of five years of the relevant date, which period was extended from three years to five years by the Finance Act, 2011, the…