Summary: (a) Sindh Sales Tax on Services Act (XII of 2011)--- ----Ss. 3 & 4---Services rendered by flying club---Taxable service---Scope---Economic activity---Scope---Record revealed that the Commissioner (Appeals) got the appellant's premises surveyed through Survey and Development Wing (S&D) which found that the appellant was providing on-ground and flying courses to its members starting from the most basic flight training course, then to achieve firstly a Private Pilot's License (PPL) within a time span of 8 months, during which the participants must complete a minimum of 40 hours of flying---Once a Private Pilot's License (PPL) is secured, the participants move to the next step towards becoming a professional pilot by acquiring a Commercial Pilot's License (CPL), which takes approximately 10 months after completing 110 hours flight---After obtaining Commercial Pilot's License the participants may move on to obtaining an Instrument Rating, which (rating) allows the participants to fly aircraft under Instrument Meteorological Conditions (IMC) and they can fly in challenging conditions--- Appellant's entire economic activity is skill-based training coupled with practical application, equipping individuals with specific skills and competencies needed for a particular job or task through hands-on experience, practical exercises, and real-world application, which prepares the participant to obtain a professional license from the Civil Aviation Authority, who may pursue their career in such specified field, therefore, the same cannot be treated as mere educational training---Thus, the appellant's economic activity falls within the definition of taxable service, requiring its registration under the Sindh Sales Tax on Services Act, 2011---Appeal, filed by flying club, was dismissed, in circumstances. (b) Sindh Sales Tax on Services Act (XII of 2011)--- ----Ss. 24, 24B & 43, Table, Serial No.1---Non-registration before providing taxable services---Penalty, imposition of---Scope---Appellant sought waiver of penalty imposed in terms of Serial No.1 of the Table under S. 43 of Sindh Sales Tax on Services Act, 2011 (‘the Act, 2011’)---Held: Provision of Serial No.1 of the Table under section 43 of the Act 2011 shows that penalty deals with two situations i.e. “not-getting registered voluntarily” and “being registered compulsorily” provided under Ss. 24 and 24B, respectively---It is clear from the wordings of statute that penalties provided in the first part (in column (2)) are applicable to single situation i.e. “not-getting registered voluntarily” and officer has discretion to impose a penalty either of Rs.10,000/- or five per cent of the amount of sales tax---However, the penalty provided in second part is applicable to twin situations i.e. "non-compliance of notice (requiring the taxpayer get registered voluntarily)" or "when an order has been passed making the taxpayer registered compulsorily", wherein the law prescribes minimum penalty of Rs.100,000/---In such circumstances it would be appropriate that the appellant must be registered under S. 24 of the Act, 2011---Situations mentioned at serial No.1 (in column (2)) are interconnected---In case a person, liable to be so registered, does not get himself registered the assessing officer issues a notice requiring such person to get himself registered voluntarily---In case such person responds to such notice positively and get himself registered, the assessing officer after considering the existence of mens-rea behind non-registration prior to providing taxable services, may impose either of the penalties i.e. Rs.10,000/- or five per cent of the amount of sales tax---However, in case of non-compliance of the notice (asking the person to get registered voluntarily), the assessing officer is liable to register said person compulsorily and also impose a penalty of Rs.100,000/-.---Word "shall" used with the penalty (in column (2)) makes it directory in nature, therefore, no discretion can be exercised by the assessing officer in case the taxpayer does not comply with the notice---In the present case , vide show-cause notice the assessing officer required the appellant to get himself registered, which was not responded positively---Having no other alternative the assessing officer registered the appellant compulsorily---Thus, in such circumstances, imposition of penalty amounting to Rs.100,000/- in terms of serial No.1 of the Table under section 43 of the Act, 2011 was justified---Appellate Tribunal Sindh Revenue Board maintained the findings of the Commissioner (Appeals)---Appeal, filed by flying club, was dismissed, in circumstances. Usman Shaikh, ITP for Apppellant. Ms. Shazmeena Abbas, AC (UNIT-25). Javed Akhtar, Departmental Representative. Date of hearing: 10th March, 2025.

Summary: Sindh Sales Tax on Services Act (XII of 2011)--- ----Ss. 2(19), 2(72C), 3 & 63---Reference---Taxable service---Exempt service---Absence of invoices---Dispute pertained to demand of sales tax on Business Support Services along with renting of premises---Validity---If Appellate Tribunal believed that no substantial material was provided by applicant / taxpayer, then at the same time it was also incumbent upon the Tribunal to confront respondent / Revenue Board Authorities as to from where they had gathered information and made out a case without proper invoices issued by applicant / taxpayer---Various invoices were placed on record by applicant / taxpayer who had discharged the burden as to providing two separate and distinct services---Invoices so produced clearly depicted that there were separate and distinct services to various clients and had charged sales tax accordingly---Applicant / taxpayer was offering / renting the space, which at times also included certain support services---Renting of space remained a separate and distinct service, and mere issuance of a common invoice did not ipso facto make such services wholly taxable---Neither the definition nor the category under which a person was registered could create liability of tax as it was the actual service so rendered which was taxable---High Court set aside orders of the forums below and decided questions in favour of applicant / taxpayer---Reference was allowed accordingly. Young’s (Private) Limited v. Province of Sindh 2019 PTD 389 ref. Sauban Tasleem for Applicant. Shamshad Ahmed for Respondents. Date of hearing: 17th March, 2025.

Summary: Income Tax Ordinance (XLIX of 2001)--- ----S. 131---Appeal before Appellate Tribunal Inland Revenue, filing of---Limitation---Technical consideration---Condonation of delay---Scope---Appellant (Registered person / Company) filed appeal before the Appellate Tribunal Inland Revenue (‘Tribunal’), which was late by 99 days---Plea of the appellant was that, against the order passed by the concerned Commissioner (‘impugned order’), it had filed complaint before the Federal Tax Ombudsman (‘Ombudsman’) under the wrong impression that the there was no right of appeal and after disposal of said complaint , the Tribunal was approached---Validity---Record showed that against the impugned order, the appellant had approached the Ombudsman--- Since the appellant had already filed complaint before the Ombudsman which was later rejected for lack of jurisdiction, the delay in filing the (present) appeal late was not without reason---Delay in filing of appeal was a technical error---Prayer for condonation of delay should be considered sympathetically---Technical ground of delay in filing appeal should not be made to hinder the cause of justice---When technical and procedural considerations were pitted against rights on substantial considerations, the substantial considerations had to be preferred over technical considerations in order to effectuate the cause of justice---Case of the appellant deserved to be decided on merits of facts and legal provisions rather than mere technicalities---Appellate Tribunal Inland Revenue condoned the delay in filing the appeal and admitted the main appeal for hearing and adjudication on merits--- Application for condonation of delay was accepted accordingly. 2012 PTD 637 (Trib.); Messrs Ashraf Dawakhana v. Additional Collector Sales Tax GST 2003 CL 601 and 2002 PTD 1035 ref. Muhammad Azam for Appellant. Ms. Saima Ijaz, DR for Respondent. Date of hearing: 14th March, 2025.

Summary: ----Ss.11 & 115 & O.VII, R.11---Qanun-e-Shahadat (10 of 1984), Arts.2, 3, 17 & 79---Transfer of Property Act (IV of 1882), S.3---Constitution of Pakistan, Art.10-A---Specific Relief Act (I of 1877), S.12---Suit for specific performance of agreement to sell---Agreement to sell attested by one witness---Trial Court rejecting plaint due to defective attestation---Legality---Respondent No.1 (through LRs) filed suit for specific performance and injunction based on an alleged agreement for purchase of suit land; the Trial Court rejected the plaint under O.VII R.11(d), C.P.C. for want of two attesting witnesses, but the Appellate Court set aside that rejection and remanded the suit, which order was under challenge in the present revision petition---Legal question requiring determination in the present matter was as to “whether a suit could be dismissed without recording evidence by invoking Art.17 or 79 of the Qanun-e-Shahadat, 1984?”---Held: Trial Court adopted a preemptive measure and it had rejected the plaint which was contrary to the language of Art.79 of Qanun-e-Shahadat, 1984 which did not declare a suit would be barred or in other words it did not preclude the party from filing a suit and whenever a party file a suit while lacking attesting witnesses of the agreement, it could not fall under R.11(d), C.P.C.---Without arriving at evidence stage and without crossing the different stages of evidence, dependent upon the requirements of Arts.2 and 3 of the Qanun-e- Shahadat, 1984, the provision of Art.79 could not be invoked---It was not permissible for the Trial Court to jump straightaway over Art.79 while bypassing the whole scheme of Qanun-e-Shahadat, 1984---Views of Trial Court about the infirmity of agreement which led to decision to reject the plaint was based on surmises, assumptions and conjectures---Stage as required under Art.79 of Qanun-e-Shahadat, 1984 i.e. “it shall not be used as evidence until two attesting witnesses at least have been called for the purpose of proving its execution” had not arrived or in other words the Trial Court had not afforded opportunity to the plaintiff to come into witness box, adduce evidence, produce document or agreement on oath, undergo the test of cross-examination and prove of the execution of agreement as per assertiveness and aspiration of doctrine of fair trial as embodied under Art.10-A of the Constitution---Trial Court was directed to proceed with the suit by recording evidence---Order passed by the Appellate Court was maintained---Present revision petition was dismissed, in circumstances. Nazir Ahmed v. Muzaffar Hussain 2008 SCMR 1639; Sheikh Muhammad Muneer v. Mst. Feezan PLD 2021 SC 538; Farid Bakhsh v. Jind Wadda 2015 SCMR 1044; State v. Farman Hussain PLD 1995 SC 1 and Khan Mir Daud Khan and others v. Mahrullah and others PLD 2001 SC 67 rel. (b) Civil Procedure Code (V of 1908)--- ----O.VII, R.11---“Rejection of plaint in suit” and “dismissal of suit”---Distinction---Scope---Order VII, R.11, C.P.C. refer only words the “rejection of plaint in suit” which ought to be applied by Trial Court having power and jurisdiction to adjudicate the lis and whenever any of the basic ingredients mentioned at (a) to (d) in O.VII, R.11, C.P.C. are available on examination of plaint including documents attached thereto---In contrast, the “dismissal of suit” connotes that it is a final determination of controversy between the parties---The power and jurisdiction to dismiss the suit can only apply by Trial Court when the parties have adduced evidence, produced documents on oath and undergone with the test of cross-examination by opposite party and finally fails to clear the test of “prove”---Another key difference between the “rejection of plaint in suit” and “dismissal of suit” is that the former keep opens the door for the plaintiff to re-try or re-file or re-institute a fresh suit or, in other words, the plaintiff cannot be precluded to file afresh suit on same cause of action or joinder of new cause of actions, against same parties or include other parties or on same subject-matter or with addition or subtraction of subject-matter where it is possible for him according to situation---In contrast, the later strictly prohibit the plaintiff to institute fresh suit---The plaintiff cannot file fresh suit against the same parties (including legitimate successor in interest or successor in office) or in respect of same subject-matter---The legal position is further tightened on the point of cause of action---In former case, the cause of action may be kept same for the plaintiff or he may join more cause of action to re-agitate or institute suit whilst the later omitted the point of cause of action and paved out another way to tackle the cases on examination of earlier subject matter decided either directly or indirectly in previous suit (case) and it can only be invoked when the evidence is recorded, the documents have been produced on oath and such document could be read as admissible evidence by Trial Court or otherwise while delivering the judgment---However, in both situations law provides statutory remedies against either Order of rejection of plaint in suit or dismissal of suit by way of judgment. (c) Civil Procedure Code (V of 1908)--- ----S.11---Res judicata, doctrine of---Concept and scope---The doctrine of res judicata isbased on the three maxims: (i.) ‘Nemo debet bis vaxari pro una et eadem cansa’which means none should be vexed twice for thesame cause; (ii.) ‘Interest reipublicae ut sit finis litium’ which meansthat it is in the interest of the state that there should bean end to litigation; (iii.) ‘Res judicata pro veritate accipitur’ which means that a judicial decision must be accepted as correct---The doctrine of res judicata prohibits the re-litigation of matters which is otherwise already decided by a court---The theory of res judicata is the culmination of the public purpose embodied in the three maxims, and it applies to all judicial processes, civil or criminal---The theory of res judicata is based on justice, equity, and moral conscience---This concept and its provision serves as a strong deterrent to re-try or re-agitate any lawsuits or disputes that were previously and conclusively resolved between the same parties under the same title or on same subject-matter---The main goal of "res judicata" is to provide court decisions a sense of finality and certainty in order to prevent protracted litigation and protect parties from being harassed---Furthermore, the "res judicata" has more connotations than just its literal translation---It is not limited to literally meanings but it is also used in modern legal discourse to refer to "claim preclusion", a robust and firm concept that guaranteeing that a judgment's binding or settled disputes. Lal Chand v. Radhakrishnan 1 (1977) 2 SCC 88 and Duchess of Kingston Case (1776) 20 Howell's State Trials 355 ref. (d) Qanun-e-Shahadat (10 of 1984)--- ----Arts.17, 79 & 81---Execution of a document---Proof---Production of two attesting witnesses, requirement of---Exception to the general requirement---Where the execution of a document is admitted by the executant himself, the examination of attesting witness is not necessary. (e) Administration of justice--- ----Each case has to be decided on its own facts---The Court cannot force or knock out someone’s suit having variegated style and nature of lis. Sajjad Ahmad Khan v. Mohammad Saleem Alvi and others Civil Petition No. 84 of 2016 ref. (f) Specific Relief Act (I of 1877)--- ----Ss.12 & 39---Agreement to sell---Defendant’s bare denial of execution in written statement---Requirement to challenge the agreement through separate proceedings---Scope---Even where the defendant in his written statement alleges the agreement and his signatures over the same as fake and fictitious but has not specifically challenged the agreement in question either by way of criminal proceedings or through a civil suit, a simple denial of a document being fake and fictitious is not legally sufficient unless the same facts are proved and established on the record. Muhammad Sattar v. Tariq Javaid 2017 SCMR 98 and Abdul Hameed v. Jahangir Khan Civil Petition No. 3097 of 2015 and Civil Appeal No. 1074 of 2015 rel. (g) Administration of justice--- ----When law requires a thing to be done in particular manner then, it should be done in that manner and anything done in conflict of the command of law shall be unlawful being prohibited or not permissible. The Collector of Sales Tax, Gujranwala v. Messrs Super Asia Mohammad Din and Sons 2017 SCMR 1427; Zia ur Rehman v. Syed Ahmed Hussain 2014 SCMR 1015 and Muhammad Hanif Abbasi v. Imran Khan Niazi and others PLD 2018 SC 189 rel. (h) Administration of justice--- ----It is indispensable and imperative sense of the duty of a Court in application of law and its interpreting to essentially delve into and realistically discover the intention of the legislature about the statutes---It is not possible for Trial Court to take departure from the amplitude of evidential rules by importing a particular rule in order to decide the matter summarily. (i) Qanun-e-Shahadat (10 of 1984)--- ----Arts.17 & 79---Whether a scribe of a document can be an attesting witness---Permissibility and legality---A scribe is not an attesting witness in terms of Arts.17 & 79 of the Qanun-e-Shahadat, 1984 though he has written the agreement or signed in some manners except as an attesting witness---The scribe of a document can only be a competent witness in terms of Arts.17 & 79 of the Qanun-e-Shahadat, 1984 if he has put his signature as an attesting witness of the document and not otherwise---The signing of the document in the capacity of a writer or scribe does not fulfill and meet the mandatory requirement of attestation, however, he may be examined by the concerned party for the corroboration of the evidence of the marginal witnesses. Hafiz Tassaduq Hussain v. Muhammad Din through Legal Heirs and others PLD 2011 SC 241; N. Kamalam and another v. Ayyasamy and another (2001) 7 SC cases 507 and Khudadad v. Syed Ghazanfar Ali Shah @ S. Inaam Hussain and others Civil Appeals Nos. 39-K to 40-K of 2021 rel. Khirpal Chetan Dev for Applicants (called absent). Kanji Mal Meghwar for Respondent No. 1. Ayaz Ali Rajpar, Assistant A.A.G Sindh for Respondents. Date of hearing: 24th February, 2025.

Summary: Obligation of the service provider in terms of Punjab Sales Tax on Services Act, 2012. 667Writ Petition- Guardianship- Custody of Minor 3974-24 NAZIA SADDIQUE VS ADJ ETC. Mr. Justice Syed Ahsan Raza Kazmi 06- 03- 2025 2025 LHC 2078 PLJ 2025 Lahore 965 (Bahawalpur Bench, Bahawalpur)

Summary: Sales Tax Act (VII of 1990)--- ----Ss. 7(1), 8(1) & 10---Taxable supplies---Lost / damaged goods---Input tax, adjustment of---Scope---Whether the taxpayer (Gas supply Company/SSGC) was entitled for adjustment of entire input tax including that which had been paid on Unaccounted for Gas (“UG”), notwithstanding the threshold fixed by OGRA?---Held : If any sales tax is paid on a product, which for some reason is not fully utilized in the production or manufacture of the finished goods, the input tax so paid can still be claimed and be fully adjusted against the tax liability---In the present case, the taxpayer's claim for adjustment of such input tax was denied by the Department on the ground that the said input was never used in final production of the finished goods---Loss of input/ raw materials does not fall within the scope of "used or to be used for any purpose other than for taxable supplies made or to be made as stipulated in S. 8(1) of the Sales Tax Act, 1990---Therefore, the proposed question was answered in the affirmative i.e. in favor of the taxpayer (SSGC) and against the Department---Thus, the order of the Appellate Tribunal Inland Revenue stood set-aside /modified---Special Sales Tax Reference Application filed by the taxpayer (SSGC) was allowed. Commissioner Inland Revenue v. Mayfair Spinning Mills Ltd. and others 2025 SCMR 1 ref. Khalid Jawed Khan for Applicant. Muhammad Aqeel Qureshi for Respondents. Adeel Kaiser, Acting Deputy General Manager, Tax Department (SSGC), Shah Hilal Manager Tax Department (SSGC) and Raj Love Kush, Deputy Manager, Legal (SSGC).

Summary: Punjab Sales Tax on Services Act (XLII of 2012)--- ----Ss. 52, 14 & 14A [as inserted through Punjab Finance Act, 2017]---Constitution of Pakistan, Arts. 4 & 10-A---Withholding agent---Show-Cause Notice issued under S. 52 of the Punjab Sales Tax on Services Act, 2012---Stance of the petitioner-company was that since it was a withholding agent and not covered within the definition of a taxpayer, therefore, it should first be dealt with under the provisions of S. 14 of Punjab Sales Tax on Services Act ('the Act, 2012'), thus, the impugned show-cause notice was liable to be set-aside---Held, that in the present case, the Authority had straightway invoked the provisions of S. 52(3) of Act, 2012 before fulfilling the mandatory requirement of issuing a notice in terms of S.52(1) of the Act, 2012---Moreover, relevant paragraph (No.3) of the impugned show-cause notice only mentioned that "various services were obtained which were taxable as per provisions of Second Schedule of the Act, 2012 and scrutiny of the petitioner's taxpayer profile shows that it failed to clear its due tax liability" which was not a valid reason to bind the petitioner to deposit the due amounts of Punjab Sales Tax in lieu of the taxable services---Provisions of S. 14 of the Act, 2012 as well as S. 14A of the Act, 2012 clarify that subsection (2) of S. 14 of the Act, 2012 discusses the powers of the Authority in connection with a withholding agent whereas S. 14A(2) of the Act, 2012 describes a special procedure for collection and payment of tax in respect of any service(s)---However, in the present case, without first meeting the mandatory requirements of said provisions, straightway notice under S. 52 of the Act, 2012 had been issued to the petitioner---A taxpayer has certain rights while the Federal Board of Revenue functions under provisions of the fiscal laws prevailing in Pakistan---The concerned authority, while issuing the impugned show-cause notice, had ignored the principle of fair trial and due process as envisaged under Art. 10-A of the Constitution---Article 4 of the Constitution clearly states that it is an inalienable right of every citizen to be treated in accordance with law and no action detrimental to his/her life, liberty, reputation or property shall be taken except as per law---No public functionary/authority is allowed, under the Constitution, to act in a manner infringing upon fundamental rights or exceeding statutory limits---A statute should be interpreted according to its plain meaning and not as per the intent of the legislature, the statutory purpose or the legislative history---Thus, the notice under S.52 of the Act, 2012 was not maintainable when clear provisions of S. 14 of the Act, 2012 had been provided---Section 14 and S. 14A [which was inserted on 15.06.2017 through Punjab Finance Act, 2017, to provide further clarification] were given under Chapter II (Scope of Tax) as such, these two sections, being special provisions, were to be first invoked by concerned authority because the same were main sections of the law/Act, and not ancillary or auxiliary sections---But when compared to S. 52 of the Act, 2012, it comes under Chapter VIII of the Act (Offences and Penalties), which was not a direct provision to issue the impugned show-cause notice, thus, the same could not be straightaway invoked---Thus, stance of the petitioner had some legal force---High Court set-aside the impugned show-cause notice and remitted the matter to the Respondent /Additional Commissioner, Punjab Revenue Authority, Rawalpindi, who would consider it as a representation of the petitioner and decide the same, after providing proper hearing to all concerned including the petitioner, strictly as per relevant provisions of the Act [specifically Ss. 14 & 14A], through a speaking order---Constitutional petition was allowed accordingly. Rahat Caf?, Rawalpindi v. Government of Punjab through Secretary Finance and others 2024 PTD 898; Reliance Commodities (Private) Ltd. v. Federation of Pakistan and others PLD 2020 Lah. 632 = 2020 PTD 1464; Chenab Flour and General Mills v. Federation of Pakistan and others PLD 2021 Lah. 343; Federal Government Employees Housing Authority through Director General, Islamabad v. Ednan Syed and others PLD 2025 SC 11 and Service Global Footwear Limited and another v. Federation of Pakistan and others PLD 2023 Lah. 471 ref. Hafiz Muhammad Idris, Advocate Supreme Court with Hassan Askari Kazmi and Hafiz Muhammad Tanveer Nasir for Petitioners. Barrister Raja Hashim Javaid with Ms. Rahat Farooq Raja, Assistant Advocates General. Zeeshan Zafar Hashmi on behalf of the Punjab Revenue Authority with Ms. Nadia Murad, Legal Officer. Arshad Mahmood Malik, Assistant Attorney General along with Barrister Zoopash Khan for Respondents. Mujtaba-ul-Hussan, Civil Judge / Research Officer for Research Assistance. Date of hearing: 4th March, 2025.

Summary: Sales Tax Act (VII of 1990)--- ----S.7---Input tax, adjustment of---Electricity and gas supply bills---Residential colony of industrial unit---Authorities were aggrieved of adjustment of input tax against supply of electricity and gas to residential colony for workers established in factory premises---Validity---Residential colony of factory for the convenience of workers was provided within factory premises for unrestrained factory work---Entire premises was registered as one manufacturing premises---Had it been objected, the entire premises would not have been registered as one manufacturing unit---Supreme Court declined to interfere in conclusion drawn by Appellate Tribunal Inland Revenue as well as by High Court, as it was based on admission of facts regarding residential colony existing within registered factory premises---Petition for leave to appeal was dismissed and leave to appeal was refused. Sheikhoo Sugar Mills Ltd. and others v. Government of Pakistan and others 2001 SCMR 1376 = 2001 PTD 2097 rel.

Summary: Sales Tax Act (VII of 1990)--- ----Ss. 38-A & 40---Criminal Procedure Code (V of 1898), Ss. 96, 98, 99-A, 100 & 103---Search of documents, items etc.---Officer of Inland Revenue---Powers---Section 40 of Sales Tax Act, 1990 authorizes an Officer of Inland Revenue to enter a place, after obtaining a warrant from a Magistrate, to search any documents or items, that in his opinion may be useful or relevant to any proceedings under Sales Tax Act, 1990---The use of word "shall" in subsection (2) of S. 40 of the Sales Tax Act, 1990, makes the procedure outlined in the Criminal Procedure Code, 1898 as mandatory---Provisions of S. 103, Cr.P.C., require that a search be conducted in the presence of two or more respectable inhabitants of the locality, which was not done in the present case---In the present case, relevant recovery memo did not contain signatures of any witnesses; which established that no witnesses were associated with the seizure of record and / or preparation of the seizure memo---Provisions of Section 40 of the Sales Tax Act, 1990 had not been complied with by the department in letter and spirit while conducting raid and seizing the documents---All searches made under the Sales Tax Act, 1990 were to be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898---Procedure regarding search had been provided in Ss. 96, 98, 99-A & 100 of the Cr.P.C. whereby firstly, a search warrant is to be obtained from the Illaqa Magistrate when search of the premises is to be conducted---In accordance with S. 103 of the Cr.P.C., it is mandatory to involve two or more respectable inhabitants of the locality in which the place to be searched is situated to attend and witness the search and a list of all articles taken into possession shall be prepared and a copy thereof shall be delivered there and then---It was evident from the record that there had been a clear departure from the compliance of the procedure and law qua the impugned action, therefore, the so-called recoveries could not be used against the respondent---Section 38-A (inserted through the Finance Act, 2004), S. 40 (substituted through the Finance Act, 2004) and S. 40-A (omitted by the Finance Act, 2006) were meant to curtail and monitor the unlimited and unbridled powers of the sales tax authorities, which was resulting in undue harassment and humiliation of taxpayers---No doubt, tax officials are empowered under the law and are duty bound to check tax evasion but, it is always to be kept in mind that the evasion of taxes and duties is a contravention of law, which cannot be eradicated through commission of another illegality and contravention of law---An illegality can be checked by adherence to the dictates and requirements of law only---Applicant-department had failed to pinpoint any illegality or legal infirmity in the impugned order passed by Appellate Tribunal Inland Revenue---Thus, proposed question was answered in affirmative i.e. decided against the applicant-department---Reference application, filed by department, was dismissed. Federation of Pakistan through Secretary, Ministry of Finance, Federal Secretariat, Islamabad and 4 others v. Messrs Master Enterprises (Pvt.) Ltd. through Managing Director 2003 PTD 1034; A.R.K. Textiles through Proprietor v. Federation of Pakistan through Ministry of Finance, Islamabad and 4 others 2006 PTD 494; Naimat alias Chacha Katta v. Summary Military Court No.2, Lahore and another PLD 1979 Lah. 279; Chairman, Central Board of Revenue and others v. Messrs Haq Cotton Mills (Pvt.) Ltd. Burewala 2007 SCMR 1039 and M/s. N. P. Water Proof Textile Mills (Pvt.) Ltd., Karachi v. Federation of Pakistan and another 2004 PTD 2952 ref. Collector of Sales Tax and others v. Messrs Medora of London Ltd. and another 2005 PTD 2234 distinguished. Liaquat Ali Ch., Shahid Sarwar Chahil and Akhtar Monga for Applicant (in STR No.256 of 2015). Malik Abdullah Raza for Applicant (in STR No.73779 of 2022). Barrister Shehryar Kasuri, Raza Imtiaz Siddiqui and Haider Aziz Sheikh for Respondent. Date of hearing: 18th February, 2025.

Summary: (a) Sales Tax Act (VII of 1990)--- ----Ss. 21(2) & 21(5) [as inserted by the Finance Act, 2024]---Sales Tax Rules, 2006, R. 12---Initiation of suspension/ blacklisting proceedings, assailing of---Suit, filing of---Remedy subsequently available---Retrospective applicability---Scope---Suit was brought to challenge a “pre-suspension notice” issued to the plaintiff (company / registered person) by the Commissioner-Inland Revenue (‘Commissioner-IR ’) for initiating suspension/ blacklisting proceedings---Plaintiff prayed for a temporary injunction to restrain the Commissioner-IR from taking coercive action against the plaintiff---Validity---The impugned 'pre-suspension' notice was essentially a notice to show-cause against suspension of sales tax registration ; which was a precursor to blacklisting proceedings--- By virtue of subsection (5) of S. 21 of the Sales Tax Act, 1990 which had been inserted by the Finance Act 2024, a remedy was available to the plaintiff before the Chief Commissioner in the event an order of suspension was passed against the plaintiff---Though that provision was inserted in the statute after the suit was filed, it is settled law that an amendment in statute to provide a forum is procedural in nature and therefore operates retrospectively---Since the plaintiff did not bring forth any exception for interfering with the impugned notice, application seeking grant of temporary injunction was dismissed. Income Tax Peshawar v. Islamic Investment Bank Ltd. 2016 SCMR 816; Air League of PIAC Employees v. Federation of Pakistan 2011 SCMR 1254; Commissioner of Income Tax v. Hamdard Dawakhana (Waqf) PLD 1992 SC 847; Deputy Commissioner of Income Tax v. Punjab Beverage Company (Pvt.) Ltd. 2007 PTD 1347; Indus Trading and Contracting Company v. Collector of Customs (Preventive) Karachi 2016 SCMR 842; Dr. Seema Irfan v. Federation of Pakistan PLD 2019 Sindh 516; Commissioner Inland Revenue v. Jehangir Khan Tareen 2022 SCMR 92; Zain ul Abideen v. Federal Board of Revenue PLD 2021 Sindh 130 and Pakistan Petroleum Ltd. v. Pakistan 2022 PTD 1742 ref. (b) Civil Procedure Code (V of 1908)--- ----O. XXXIX, Rr. 1 & 2---Sales Tax Act (VII of 1990), Ss. 21(2) & 21(5)---Initiation of suspension/blacklisting proceedings, assailing of---Suit, filing of---Temporary injunction sought---Suit was brought to challenge a “pre-suspension notice” issued to the plaintiff (company / registered person) by the Commissioner-Inland Revenue (‘Commissioner-IR’) for initiating suspension / blacklisting proceedings---Plaintiff prayed for a temporary injunction to restrain the Commissioner-IR from taking coercive action against the plaintiff---Held: Excepting a jurisdictional defect, a Court of law does not ordinarily interfere with a show-cause notice issued by a statutory authority lest such interference stifles the exercise of fact-finding and provides an escape from special statutory proceedings and remedies--- The grounds urged by the plaintiff for interference were on the facts of the case and did not go to the jurisdiction of the Commissioner-IR in issuing the impugned notice ; said facts had been laid by the plaintiff before the Commissioner-IR who had yet to pass any order thereon; he might well agree with the plaintiff---Temporary injunction sought in effect required the High Court to determine to those facts instead of the Commissioner-IR---Since the plaintiff did not bring forth any exception for interfering with the impugned notice, application seeking grant of temporary injunction was dismissed. Ovais Ali Shah for Plaintiff. Nisar Ali Naushad Babar, Assistant Attorney General for Defendant No.1. Nemo for Defendant No.2. Ameer Bakhsh Metlo along with Ms. Zakia for Defendant No.3. Date of hearing: 6th February, 2025.