Setting aside an order-in-original: No unlimited period for re-adjudication: apex court
ISLAMABAD: The Supreme Court ruled that setting aside of an original order by the appellate forum and remanding it to the authority does not create an unlimited period for re-adjudication; rather, it gives rise to a fresh period within which the renewed adjudicatory exercise must be completed in accordance with section 36(3) of the Sale Tax Act, 1990.
A three-judge SC bench headed by Chief Justice Yahya Afridi and comprised Justice Muhammad Shafi Siddiqui and Justice Miangul Hassan Aurangzeb heard an appeal filed by the Commissioner Inland Revenue, Lahore, the main question wherein was; “whether, after an order-in-original has been set aside in appellate proceedings and the matter remanded for re-adjudication, the fresh order must still be passed within the limitation prescribed under section 36(3) with reference to the original show-cause notice, or whether the order of remand gives rise to a fresh period within which such re-adjudication may lawfully be undertaken.”
The respondent (M/s Makerwal Collieries Limited) was proceeded against under the Sales Tax Act, 1990. An order-in-original was initially passed against it. The matter was taken in appeal before the Tribunal, which, by order dated 10.03.2001, set aside the impugned order and remanded the case to the adjudicating authority.
The Tribunal directed the authority to re-decide the matter in accordance with law. Pursuant to the remand, Order-in-Original was passed on 31.12.2005 by the Additional Collector Sales Tax and Federal Excise (Adjudication), Lahore. The order imposed sales tax together with default surcharge and penalties. The respondent challenged the order before the Collector (Appeals), which upheld the adjudication on merits.
The Department challenged the Tribunal’s decision before the Lahore High Court, but it declined to interfere and dismissed the reference.
The judgment, authored by Justice Shafi Siddiqui, said the authority was required to undertake the adjudicatory exercise afresh in accordance with the directions of the appellate forum which indeed cannot exceed statutory frame. It said where an order-in-original is set aside and the matter is remanded for fresh adjudication, the period prescribed under section 36(3) of the Sale Tax Act, 1990, is to be reckoned afresh from the date of remand, subject to any extension or exclusion lawfully available under the statute.
Justice Shafi wrote “We cannot conceive a situation where the time frame after remand for adjudication would exceed the time originally available to the officer.” He stated that in the present case, the original order-in-original was set aside by the Appellate Tribunal, which remanded the matter vide order dated 10.03.2001 to the Collector (Adjudication), Multan/Faisalabad, for re-adjudication. Pursuant thereto, the order-in-original No. 303/2005 was passed on 31.12.2005. Thus, notwithstanding the remand, the fresh adjudication was undertaken after a period of 4 years, 9 months and 21 days from the date on which the matter was remanded. It noted that the record further shows that no extension of time for adjudication was sought or obtained under the applicable statutory provision. It ought to have been adjudicated within 45 days of the remand order dated 10.03.2001.
The judgment did not accept the department’s contention that no period of limitation applies to a matter after remand cannot, therefore, be accepted.
Such an interpretation would render the statutory limitation nugatory in every case where an order is set aside and the matter is remanded, leaving the adjudicating authority without any temporal constraint upon the exercise of its renewed jurisdiction. This would be contrary not only to the mandatory character of section 36(3), as settled by the Supreme Court in Super Asia and affirmed by the Larger Bench in WAK Limited, but also to the principle of finality and expeditious adjudication which underlies the law of limitation.
Copyright Business Recorder, 2026