Controversy over non-cancellation of adjudication SRO

The Federal Board of Revenue (FBR) has forgotten to rescind an old Statutory Regulatory Order (SRO) pertaining to adjudication, despite introduction of new procedures for adjudication of tax related cases following abolition of section 45 of Sales Tax Act 1990.
Tax experts told Business Recorder here on Saturday that a legal controversy has emerged in the backdrop of revised adjudicating mechanism in the presence of SRO 555(I)/96, which has created confusion whether the adjudication officers are still required to follow the pecuniary limit for raising demands under the said notification for adjudication of tax cases or not. It is apprehended that huge recovery demands adjudicated during last year, after omission of section 45 of the Sales Tax Act, could now be annulled on this single technical/legal ground.
Sources said that this major anomaly of adjudication powers of tax officers has been pointed out by the legal experts. According to details, it has been observed that section 45 of the Sales Tax Act 1990 was omitted through Presidential Ordinance 2010 (III of 2010), promulgated on February 6, 2010. The amendment was further endorsed through Finance Bill 2010. Under section 45 of the Sales Tax Act there was specific pecuniary limit given for adjudication of the cases; the superintendent was authorised to pass orders for recovery involving Rs 10000; Assistant Collector can decide cases exceeding Rs 10000/ up to Rs one million; the Deputy Collector can decide cases exceed Rs one million up to Rs 2.5 million; whereas an Additional Commissioner can decide cases without any restriction. After omission of the section 45, the officers of the Inland Revenue have begun passing assessment orders without any specified pecuniary limits in the absence of section 45 of the Sale Tax Act.
However, recently these decisions had been confronted by tax experts on the grounds that though section 45 was omitted from the Act, an old notification 555(I)/96 is still operating under the law having same pecuniary limits for creating demands under section 11 and section 36 of the Sales Tax Act., 1990. Hence, all cases decided in recent past by the officers of the Inland Revenue seemed to be in violation of the pecuniary limit and hence become null and void.
Responding to a question on the legality of section 45 vis-à-vis SRO.555(I)/96, a leading Karachi-based sales tax expert, Arshad Shehzad, explained that section 45 was inducted in the Sales Tax Act in year 2000. The rationale behind inducting this section at that point of time was to create separate office for adjudication and detach this authority from executive office, in order to bring more transparency in the tax system and to bring confidence of the taxpayer. However, the section was omitted last year and now powers of the adjudication rest with the same officer who issues the contravention report against the taxpayers, meaning that taxpayers are now left to the mercy of the audit officers.
In his view it is correct that notification 555(I)/96 is still operative and after omission of section. 45 of the Sales Tax Act 1990 though executive officers may pass recovery orders, but they have to follow the pecuniary limits provided under the law. The pecuniary limits and delegation of powers clearly reflect regulator's intention to observe maximum care in exercise of such important powers. He further said that there also prevails divergent viewpoint of the tax officers that since the section 11(3) under which notification 555 was issued was also omitted in 2000, the notification stands cancelled itself. However, the important question still remained that why the notification was not specifically rescinded till date, Arshad Shehzad added.