Summary: (a) Taxation – Alternative Dispute Resolution for State-Owned Enterprises (SOEs): ----Income Tax Ordinance, 2001 (XLIX of 2001), S.134A---Sales Tax Act, 1990, S.47A---Federal Excise Act, 2005, S.38---Mandatory referral of tax disputes by SOEs to Alternative Dispute Resolution Committee (ADRC)---Scope and application---Petitioner, a State-Owned Enterprise (SOE), challenged coercive recovery proceedings initiated by the tax authorities despite applying for ADR under S.134A of the Income Tax Ordinance, 2001---Held, as per the amendments introduced through the Finance Act, 2024, SOEs are required to apply for ADR before FBR in case of any tax dispute, and coercive recovery measures should not be adopted by tax authorities during the pendency of ADR proceedings---FBR issued a directive on 03.09.2024, instructing all tax departments to withdraw recovery notices against SOEs, confirming that no other legal remedy was available except ADRC---Court directed that all tax authorities must comply with these instructions to prevent unnecessary litigation and delays. ----Cited Case: • Civil Aviation Authority of Pakistan v. Federation of Pakistan (Constitution Petition No.D-1513 of 2024) (b) Judicial Review – High Court’s Role in Tax Matters: ----Constitution of Pakistan, Art.199---Judicial review of tax recovery measures against SOEs---Held, courts are burdened with excessive litigation due to coercive tax recovery measures taken by the Inland Revenue Department against SOEs, despite clear statutory provisions mandating ADRC for dispute resolution---Court noted that SOEs and FBR both fall under the Federal Government, making tax disputes between them a mere financial reallocation within the same entity, leading to unnecessary litigation costs and inefficiency---Court directed Inland Revenue officials to strictly comply with ADRC provisions and warned of legal action, including contempt of court proceedings, against non-compliant officials. ----Cited Case: • Province of Punjab Case (2024 SCMR ___) (c) Withdrawal of Recovery Notices – FBR’s Directive: ----Tax Laws (Amendment) Act, 2024---FBR's Letter dated 03.09.2024 directing all tax offices to withdraw recovery notices against SOEs---Scope and application---Court acknowledged FBR’s corrective action and took its letter and newly issued SRO 1290(I)/2024 on record, confirming that SOEs must resolve tax disputes exclusively through ADRC---Court warned that future non-compliance by tax officials would invite contempt proceedings. -----Disposition: Petition disposed of in favor of the Petitioner (SOE). FBR's directive for withdrawal of tax recovery notices against SOEs to be strictly implemented. Failure to comply will result in legal action against delinquent officials.

Summary: Customs Act (IV of 1969)--- ----S. 196---Sales Tax Act (VII of 1990), Ss. 33 & 34---Reference---Maintainability---Necessary party---Signatures on Reference---Principle---Penalty imposed by authorities was set aside by Customs Appellate Tribunal on the ground that raw material after conversion into finished goods had already been exported---Respondent / taxpayer assailed the Reference on the plea that liability was against Company whereas Reference was filed against director of Company---Respondent / taxpayer also raised objection against Reference which was not even signed by Collector Customs---Validity---Vakalatnama available on record clearly suggested that the Reference was filed on the instruction of Collector Customs by the counsel representing the Department, however, it was only signed by the counsel but at belated stage---Even if the Collector had failed to sign memo. of Reference but had consented to filing of Reference the same would be in accordance with law provided the counsel representing Department not only had signed the Reference in time but had presented the same before Court within the time stipulated by the law---Appeal was filed by the director and not by the Company, therefore, the company was not a necessary party as the matter only related to adjudication of certain questions of law which arose out of the judgment of Customs Appellate Tribunal---High Court overruled the objection raised by respondent / taxpayer---High Court declined to interfere in the judgment passed by Customs Appellate Tribunal as the Reference filed by authorities was barred by limitation---Reference was dismissed, in circumstances. PLD 2020 SC 736; PLD 2010 Lah. 666; KPRA v. Legacy Pharmaceutical (Pvt.) Limited, Peshawar 2023 PTD 56; CIR, Faisalabad v. Engineers Associated Precast (Pvt.) Ltd. 2023 PTD 393 and The Director of Customs Valuation v. Hanna Dairies 2023 PTD 68 ref. The Collector of Customs v. Dream Garments 2021 PTD 1042 distinguished. Director, Directorate-General of Intelligence and Investigation v. Messrs Al-Faiz Industries (Pvt.) Limited 2006 SCMR 129 rel. Mukhtar Ahmad Maneri for Petitioner. Barrister Syed Mudassir Ameer for Respondent. Date of hearing: 5th June, 2024.

Summary: (a) Sales Tax Act (VII of 1990)--- ----S.11(5)---Constitution of Pakistan, Art.199---Issuance of show cause notice, challenge to---Constitutional petition---Maintainability---Delay in issuance of show-cause notice---Show-cause notice was impugned on the ground that same was time barred---Validity---Reasons assigned for extension of time could not extend limitation as provided under S.11 of Sales Tax Act, 1990, whereas, the other argument that matter was under consideration in audit also did not entitle respondents to seek extension in the limitation either on the excuse of audit or delay in any other manner---Show-cause notice was time barred, whereas, the law as to limitation was settled---Cardinal principle of law was that all were equal before law, whether a citizen or State, and if a law prescribed time period for recovery of money, after its lapse, recovery was not enforceable through Courts---Since it was not in dispute that show-cause notice was hopelessly time barred, hence without jurisdiction, therefore, while exercising constitutional jurisdiction notice of same was taken by the High Court, and by doing so, the impugned show-cause notice was set-aside/quashed---Constitution petition was allowed, in circumstances. Federation of Pakistan v. Ibrahim Textile Mills Limited 1992 SCMR 1898 rel. (b) Constitution of Pakistan--- ----Art.199---Constitutional petition---Direct challenge to the show cause notice being barred by time---Alternate remedy, availing of---Legality---Exercise of Constitutional jurisdiction in the matter wherein show-cause notice is challenged directly, in cases wherein on the face of it, if it is time barred, then asking the aggrieved party to avail alternate remedy would amount to refusal of exercise of discretion. (c) Discretion--- ----Proper exercise of discretion, concept of---It is not proper exercise of discretion to refuse relief to a party to which it is entitled under law. Collector of Customs v. K&A Industries 2006 PTD 537 and Assistant Collector Customs v. Khyber Electric Lamps 2001 SCMR 838 rel. Abdul Raheem Lakhani along with Atta Muhammad Qureshi and Suneel Memon for Petitioners. Ayaz Sarwar Jamali for Respondents. Kashif Nazeer, Assistant Attorney General.

Summary: Background: A group of individual and private limited companies operating in the erstwhile Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA) challenged the Federal Board of Revenue (FBR) and the Government of Pakistan regarding tax exemptions. These companies were enjoying immunity from sales tax and income tax before the 25th amendment to the Constitution of Pakistan in 2018. Post-amendment, the exemptions continued through specific statutory regulatory orders (SROs). However, a change introduced by the Finance Act, 2024, requiring the presentation of a pay order instead of a post-dated cheque for tax exemption, created a dispute. ----Issues: 1- Whether the new requirement for a pay order instead of a post-dated cheque for tax exemption, introduced by the Finance Act, 2024, applies retrospectively. 2- Whether goods already imported and manifested before the enactment of the Finance Act, 2024, should be subject to the new requirement. ----Holding/Reasoning/Outcome: The court held that the amendment made by the Finance Act, 2024, does not apply retrospectively to goods that were already imported and had reached Pakistan’s territorial waters or were manifested before July 1, 2024. The court emphasized that, at common law, there is a presumption against retrospective application of statutes unless explicitly stated. It referred to precedents where the courts have ruled against the retrospective application of statutes unless it is clearly intended. The amendment requiring a pay order instead of a post-dated cheque is seen as a new condition that should not affect past transactions. The court cited the principle that fiscal statutes are to be construed strictly and are not to impose additional burdens retrospectively unless explicitly stated. All the writ petitions were allowed, providing relief to the petitioners by ruling that the new requirement does not apply to their previously imported goods. ----Citations/Precedents: Messrs Taj Packages Company (Pvt) Ltd vs. The Government of Pakistan (2016 PTD 203) Pakistan vs. Hazrat Hussain (2018 SCMR 939) Al-Samrez Enterprise vs. The Federation of Pakistan (1986 SCMR 1917) Gas & Oil Ltd. Pakistan vs. Collector, Model Customs Collectorate of Preventive & others (C.P No. D-1650 of 2020, decided on 29.10.2020) M/s Gadoon Textile Mills and others vs. Federation of Pakistan and others (WP No. 6127-P/2019, decided on 07.09.2023) M.Y. Electronic Industries (Pvt) Ltd. vs. Government of Pakistan (1998 SCMR 1404) Zila Council Jehlum vs. Messrs Pakistan Tobacco Company Ltd (PLD 2016 SC 398) Member (Taxes) Board of Revenue Punjab vs. Qaisar Abbas (2019 SCMR 446) Wainwright vs. Home Office [2002] QB 1334 Gustavson Drilling (1964) Ltd vs. Minister of National Revenue (1977 1 SCR 271) Collector of Central Excise and Land Customs vs. Azizuddin Industries Ltd, Chittagong (PLD 1970 SC 439) ----Quote: Legislature can legislate prospectively and retrospectively, such power is subject to certain constitutional and judicially recognised restrictions. According to the canons of construction, every statute including amendatory statutes is prima facie prospective, based on the principle of nova constitutio futuris formam imponere debet, non praeteritis (which means ‘a new law ought to regulate what is to follow, not the past’ as per Osborn: Concise Law Dictionary); unless it is given retrospective effect either expressly or by necessary implication. In other words, a statute is not to be applied retrospectively in the absence of express enactment or necessary intendment, especially where the statute is to affect vested rights, past and closed transactions or facts or events that have already occurred. This principle (s) is attracted to fiscal statutes which have to be construed strictly, for they tend to impose liability and are therefore burdensome (as opposed to beneficial legislation). Furthermore, it is not only the wording/text of the statute which is to be considered in isolation; we are not to examine simpliciter whether such law has a retrospective effect or not, rather it has to be examined holistically by considering several factors such as, the dominant intention of the legislature which is to be gathered from the language used, the object indicated or the mischief meant to be cured, the nature of rights affected, and the circumstances under which the statute is passed. The law laid down in Zila Council’s case ibid was reaffirmed by the Apex Court in the case of Qaisar Abbas and others[1] , further elucidating the matter that retrospectivity can only be attributed to a statute where it is made explicit or can be inferred by necessary implications; it cannot be presumed. The close perusal of the Finance Act, 2024 does not give any impression that it applies to any transaction which has taken place prior to 1st July, 2024 nevertheless judgment of the Apex Court in the Al-Samrez Enterprise’s case (supra), in our humble view, is attracted to the present cases wherein it was held that “we are therefore, clearly of the opinion that if a binding contract was concluded between the appellants and the foreign exporter or steps were taken by the appellants created a vested right to the then existing notification granting exemption, the same could not be taken away and destroyed in modification of the earlier one, on the ground that under section 21 of the General Clauses Act, the government could exercise the power of modification”. ----------------------------------------------------------------------------------- Member (Taxes) Board of Revenue Punjab, Lahore and others Vs Qaisar Abbas and others (2019 SCMR 446)

Summary: (a) Sales Tax Act (VII of 1990)--- ----S. 37---Civil Procedure Code (V of 1908), S. 9---Suit against tax authorities---Order to deposit half disputed amount, non-compliance of---Effect---Admittedly, no compliance has been made as to previous order of the Court for deposit of 50% of the disputed amount having been passed in view of the judgment passed in the case of Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan reported as 2018 SCMR 1444 (‘Searle IV Solution case’) ; whereas, through these suits, the plaintiffs have impugned notices to give evidence under S. 37 of the Sales Tax Act, 1990, whereby, it has been alleged that the Plaintiffs are liable to pay certain amount---Contention of the plaintiffs that no amount is mentioned in the impugned notices, and even if so, it is not against the plaintiff but against some other person who is being investigated by the defendants, does not appear to be correct and justified from perusal of the record---In the impugned notice it is stated that the Plaintiff is utilizing fake/flying invoices issued by the person under investigation to inflate the input tax and or to reduce its liability illegally, which is sufficient for the purposes of Searle IV Solution case as otherwise it would negate the intent / dicta laid down by the Supreme Court in the Searle IV Solution case---Plaintiff failed to deposit the requisite 50% of the amount so mentioned in the notice---Suit, filed by registered person, was dismissed, in circumstances. Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan and others 2018 SCMR 1444 ref. Agha Steel Industries Ltd v. Directorate of Intelligence 2019 PTD 2119 and A&Z Agro Industries (Pvt.) Ltd. v. Federation of Pakistan and others (Suit No. 2019/2015) distinguished. (b) Civil Procedure Code (V of 1908)--- ----S. 9---Civil Courts Ordinance (II of 1962), S. 7---Suit against tax authorities---Jurisdiction of Single Bench of the High Court---Discretionary or mandatory---While the Single Bench of the High Court (Single Bench) may take cognizance of any suit arising out of an action/order of the tax authorities/Customs Officers, such jurisdiction must be sparingly exercised by the Single Bench, therefore, this Court (Singl e Bench) is not required to mandatorily exercise such jurisdiction in tax matters on the Original Side of this Court (Single Bench ) in terms of S.9 of Civil Procedure Code, 1908, read with S. 7 of the Civil Courts Ordinance, 1962---When the matter is of exercising discretion by the Court, then the Court is not bound to grant such relief merely for the reason that it is otherwise lawful to do so---High Court is required to exercise its jurisdiction sparingly and not mandatorily---Suit, filed by registered person, was dismissed, in circumstances. Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan and others 2018 SCMR 1444 ref. (c) Sales Tax Act (VII of 1990)--- ----S. 37---Civil Procedure Code (V of 1908), S.9---Summon issued by tax authorities to give evidence---Challenged by way of filing suit against the tax authorities---Scope---If at all, a suit is maintainable, even then a direct challenge to a summon issued under S. 37 of the Sales Tax Act, 1990, without responding to such summons, cannot be entertained at this stage of the proceedings---Impugned notice only seeks a response from the plaintiff (Registered Person) and to produce the relevant documents in support of the input tax so claimed and that is all, which also provided a date of hearing to respond to such notice along with submission of documents---Therefore, it is premature for the plaintiff to approach the Court directly without any justifiable cause of action to file the present suit---Suit, filed by registered person, was dismissed, in circumstances. (d) Specific Relief Act (I of 1877)--- ----S. 56(e)---Sales Tax Act (VII of 1990), S. 37---Civil Procedure Code (V of 1908), S. 9---Summon issued by tax authorities to give evidence relating criminal proceedings---Suit against the tax authorities---Stay, seeking of---Scope---Notice under S. 37 of the Sales Tax Act, 1990, is in respect of some investigation regarding an FIR lodged before the Special Judge (Custom, Taxation and Anti-Smuggling)---Though presently the plaintiff is not nominated in the FIR; however, by way of exercise of jurisdiction in the matter, such investigation has been stalled by the ad-interim order of this Court---Such proceedings are criminal proceedings and cannot be stayed, as such an injunctive relief is barred under S. 56(e) of Specific Relief Act, 1887---Suit, filed by registered person, was dismissed, in circumstances. Makhdoom Ali Khan along with Jam Zeshan for Plaintiffs. Ghulam Asghar Pathan, Syed Ahsan Ali Shah, Mukesh Kumar Khatri for Defendants along with Mansoor Wisal, DCIR. Kashif Nazeer, Assistant Attorney General.

Summary: Sales Tax Act (VII of 1990)--- ----S. 46---Civil Courts Ordinance (II of 1962), S. 7---Civil Procedure Code (V of 1908), S. 9---Suit before Single Bench of the High Court against the tax authorities, filing of---Alternate remedy, availability of---Plaintiff (taxpayer) filed present suit against the suspension of its Sales Tax Registration---Contention of the plaintiff was that despite the issuance of pre-suspension notice no opportunity was provided---Validity---Said contention appeared to be misconceived as the requirement of law had been complied with, whereas, the plaintiff / petitioner ought to have availed further remedy in accordance with law including but not limited to S. 46 of the Sales Tax Act, 1990---High Court has to exercise its original side jurisdiction sparingly and with caution, it may still take cognizance of any suit arising out of an action/order of the tax authorities/Customs Officers, however, such jurisdiction must be sparingly exercised by the Single Bench---High Court is not required to mandatorily exercise such jurisdiction in tax matters on the Original Side of the High Court in terms of S. 9 of Civil Procedure Code, 1908, read with S. 7 of the Civil Courts Ordinance, 1962---Jurisdiction vested in the High Court specially in tax / revenue matters is not to be exercised in every run-of-the-mill case---Thus, the plaintiff ought to have availed the alternate remedy---Suit, being not maintainable and misconceived, was dismissed. Saleem Ahmed v. Federation of Pakistan 2021 PTD 1813 and Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others 2018 SCMR 1444 ref. Danial Muzaffar for Plaintiff. Kashmif Nazeer, Assistant Attorney General. Zulfiqar Ali Khan Jillani for Respondents.

Summary: (a) Sales Tax Act (VII of 1990)--- ----S. 11---Civil Procedure Code (V of 1908), S. 9---Issuance of Show-Cause Notice by Tax Authorities, challenging of----Civil suit before Single Bench of the High Court---Maintainability---Order of the Court, non-compliance of---Effect---Show-Cause Notice was issued to the Registered Person / Company under Ss. 11(2) & 11(3) of the Sales Tax Act, 1990, whereby, it had been alleged that it was liable to pay an amount (of Rs.59,712,503/-) and as to why the same might not be assessed against it---Registered person / Company (plaintiff) has impugned the said Show-Cause Notice by way of filing civil suit before the Single Bench of the High Court against the Tax Authorities (defendants)---High Court directed the plaintiff to deposit 50% of amount being claimed by the defendants in view of the case titled Searle IV Solution (Pvt.) Ltd. v. Federation of Pakistan reported as 2018 SCMR 1444 ('the Searle IV Solution case')---Plaintiff did not comply with said directions/order contenting that since no amount has been calculated by the Tax Authorities , Searle IV Solution case would not apply---Validity---Contention of the plaintiff was misconceived as otherwise it would negate the intent/dicta laid down by the Supreme Court in the Searle IV Solution case---Suit filed by registered person, being non-maintainable, was dismissed. Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan and others 2018 SCMR 1444 ref. (b) Civil Courts Ordinance (II of 1962)--- ----S. 7---Civil Procedure Code (V of 1908), S. 9---Sales Tax Act (VII of 1990), S. 11---Issuance of Show-Cause Notice by the Tax Authorities, challenging of----Civil suit before the Single Bench of the High Court---Maintainability---Original Civil jurisdiction of High Court, exercising of---Show-Cause Notice was issued to the Registered Person / Company under Ss. 11(2) & 11 (3) of the Sales Tax Act, 1990, whereby, it had been alleged that it was liable to pay an amount (of Rs.59,712,503/-) and as to why the same might not be assessed against it---Registered person / Company (plaintiff) impugned said Show-Cause Notice by way of filing civil suit before the Single Bench of the High Court against the Tax Authorities (defendants)---Defendants raised objection regarding maintainability of civil suit before the Single Bench of the High Court---Plea of the plaintiff was that its suit was maintainable in view of case titled Searle IV Solution (Pvt.) Ltd. v. Federation of Pakistan reported as 2018 SCMR 1444 ('the Searle IV Solution case')---Validity---In (Para 17) of the said judgment / the Searle IV Solution case, it had been observed that "it is directed, that while the Single Bench of the Sindh High Court at Karachi may still take cognizance of any suit arising out of an action/order of the tax authorities/Customs Officers, such jurisdiction must be sparingly exercised by the Single Bench"---Therefore, in view of such position present (Single Bench of High Court) was not required to mandatorily exercise such jurisdiction in tax matters on the Original Side of High Court in terms of S. 9 Civil Procedure Code, 1908 read with S. 7 of the Civil Courts Ordinance, 1962---Suit filed by registered person, being non- maintainable, was dismissed. Searle IV Solution (Pvt.) Ltd. and others v. Federation of Pakistan and others 2018 SCMR 1444 ref. (c) Sales Tax Act (VII of 1990)--- ----S. 11---Civil Procedure Code (V of 1908), S. 9---Issuance of Show Cause Notice by the Tax Authorities, challenging of----Civil suit before the Single Bench of the High Court---Maintainability---Original Civil jurisdiction of High Court---Discretion of the High Court---Scope---Show-Cause Notice was issued to the Registered Person / Company under S. 11(2) & 11(3) of the Sales Tax Act, 1990, whereby, it had been alleged that it was liable to pay an amount (of Rs.59,712,503/-) and as to why the same might not be assessed against it---Registered Person / Company (plaintiff) impugned said Show-Cause Notice by way of filing civil suit before the Single Bench of the High Court against the Tax Authorities (defendants)---Defendants raised objection regarding maintainability of civil suit before the Single Bench of the High Court---Validity---If at all a suit was maintainable, even then a direct challenge to a Show-Cause Notice without availing the remedy before the Adjudicating and the Appellate Authority was deprecated by the Courts---Present (Single Bench of High Court) was not required to decide the controversy in hand, which apparently related to the alleged denial of input tax claimed by the plaintiff, if any, whereas admittedly it was not a case of any jurisdictional defect or the competency of the concerned officer---If at all, even if a legal question was raised, it was not mandatory upon the Court to entertain a Civil Suit in all run of the mill cases; rather, the discretion vested in the Court had to be exercised with restraint and not as a matter of routine---Therefore, a mere show-cause notice by itself is not a ground to invoke Original Civil jurisdiction of High Court, and the plaintiff ought to have approached the defendants (Tax Authorities) for raising all such legal issues---Abstinence from interference at the stage of issuance of Show-Cause Notice in order to relegate the parties to the proceedings before the concerned Authorities must be the normal rule---Suit filed by registered person, being non- maintainable, was dismissed. Commissioner Inland Revenue v. Jahangir Khan Tareen 2022 SCMR 92 and Indus Motor Company Limited v. Pakistan Order dated 13.2.2023 in C.P. No. D-5003/2019 ref. Shaukat Hayat for Plaintiff. Ghulam Asghar Pathan, Syed Ahsan Ali Shah, Mukesh Kumar Khatri for Defendants along with Mansoor Wisal, DCIR. Kashif Nazeer, Assistant Attorney General.

Summary: Background: The plaintiff filed a civil suit under Section 9 CPC against the Tax Department, challenging a Show Cause Notice dated 15.01.2024 issued under Section 11(2) & (3) of the Sales Tax Act, 1990. The notice alleged that the plaintiff was liable to pay Rs. 59,712,503. The plaintiff sought an interim injunction against the tax authorities. ----Issues: 1- Whether the plaintiff's suit against the tax authorities is maintainable without depositing 50% of the disputed tax amount as per the Supreme Court's directives in Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others (2018 SCMR 1444). 2- Whether the plaintiff can challenge a show cause notice directly in the High Court without first availing the remedy before the adjudicating and appellate authorities. ----Holding/Reasoning/Outcome: ---Compliance with Supreme Court's Directives: The court emphasized that according to the Supreme Court's judgment in Searle IV Solution, civil suits arising from actions/orders of tax authorities must be sparingly entertained and should only proceed if the plaintiff deposits at least 50% of the calculated tax amount. The plaintiff failed to comply with this directive. ---Challenging Show Cause Notices: The court held that challenging a show cause notice directly in the High Court without first going through the adjudicating and appellate authorities is generally discouraged. The court noted that the plaintiff should have raised their legal issues with the respondents first. The court referenced the Supreme Court's decision in Jehangir Khan Tareen (2022 SCMR 92), which stressed the importance of allowing the concerned authorities to handle show cause notices and discouraged court interference at this stage. The court dismissed the suit as not maintainable due to the plaintiff's failure to deposit 50% of the disputed tax amount and because the suit prematurely challenged a show cause notice without exhausting available remedies. The pending applications were also dismissed. ----Citations/Precedents: Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others (2018 SCMR 1444) Jehangir Khan Tareen (2022 SCMR 92) Indus Motor Company Limited v. Pakistan (Order dated 13.02.2023 in C. P. No. D-5003/2019)

Summary: Background: The plaintiff filed a civil suit challenging the suspension of their Sales Tax Registration. On 31.05.2024, the court issued an ad-interim order restoring the Sales Tax Registration. The case was revisited on 27.06.2024 to address the matter of availing alternate remedies and to determine the maintainability of the suit. ----Issues: 1- Whether the plaintiff had availed the alternate remedy as required by law before filing the suit. 2- Whether the court should exercise its original jurisdiction in tax matters as guided by the Supreme Court in the case of Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others (2018 SCMR 1444). ----Holding/Reasoning/Outcome: ---Alternate Remedy: The court confronted the plaintiff’s counsel regarding the requirement to avail alternate remedies before filing the suit. It was noted that a pre-suspension notice was issued to the plaintiff in compliance with the judgment in Saleem Ahmed v. Federation of Pakistan (2021 PTD 1813). The plaintiff’s counsel argued that no opportunity was provided despite the pre-suspension notice, but the court found this contention misconceived, as the requirement of law and dicta had been complied with. The court emphasized that the plaintiff should have pursued further remedies as outlined in Section 46 of the Sales Tax Act, 1990. ---Exercise of Original Jurisdiction: The court referred to the Supreme Court's directives in Searle IV Solution, emphasizing that the original side jurisdiction in tax matters should be exercised sparingly and with caution. Specifically, the Supreme Court had directed that suits related to tax authorities’ actions should be expeditiously decided and entertained only if at least 50% of the tax amount calculated by the authorities is deposited. Given the plaintiff’s failure to comply with these conditions and the availability of alternate remedies, the court decided not to exercise its jurisdiction in this case. The suit was dismissed as not maintainable and misconceived due to the plaintiff’s failure to avail the alternate remedies and comply with the Supreme Court’s directives. All pending applications were also dismissed. ----Citations/Precedents: Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others (2018 SCMR 1444) Saleem Ahmed v. Federation of Pakistan (2021 PTD 1813)

Summary: Background: The plaintiffs filed suits challenging the tax authorities' actions and notices, specifically regarding the suspension of Sales Tax Registration and allegations of utilizing fake invoices to inflate input tax or reduce liability. Previous orders had directed the plaintiffs to deposit 50% of the amount claimed by the tax authorities as per the Supreme Court's guidelines in Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others (2018 SCMR 1444). ----Issues: 1- Whether the plaintiffs complied with the order to deposit 50% of the amount claimed by the tax authorities. 2- Whether the court should exercise its jurisdiction to entertain the suits filed by the plaintiffs challenging the tax authorities' notices. ----Holding/Reasoning/Outcome: ---Compliance with Deposit Order: The plaintiffs did not comply with the order to deposit 50% of the disputed amount. The plaintiffs' counsel argued that the amount was not specified in the impugned notices and, therefore, the condition should not apply. However, the court found this contention incorrect as the notices did state the amounts alleged to be owed by the plaintiffs. ---Exercise of Jurisdiction: The court referred to the Supreme Court's guidelines in Searle IV Solution, which require that the original side jurisdiction in tax matters be exercised sparingly and with caution. The court emphasized that it is not mandated to exercise this jurisdiction in every case and highlighted that the plaintiffs should have availed alternative remedies, such as responding to the notices and engaging in the administrative process. ---Premature Filing of Suit: In the case of Exide Pakistan Ltd, the court noted that the challenge to the summons issued under Section 37 of the Sales Tax Act, 1990, was premature as the plaintiff had not yet responded to the summons or provided the requested documentation. ---Legal Precedents and Bar on Relief: The court cited Section 56(e) of the Specific Relief Act, 1877, which bars injunctive relief in criminal proceedings, and noted that the investigation related to an FIR lodged before the Special Judge (Custom, Taxation & Anti-Smuggling) should not be stayed by an interim order of the court. The suits were dismissed for failing to comply with the requirement to deposit 50% of the disputed amount and for not following the proper legal procedures. The court also ruled that its jurisdiction should be exercised sparingly, particularly in tax matters, and that the plaintiffs should pursue alternative remedies before seeking judicial intervention. -----Citations/Precedents: Searle IV Solution (Pvt.) Ltd and others v. Federation of Pakistan and others (2018 SCMR 1444) Agha Steel Industries Ltd. v. Directorate of Intelligence (2019 PTD 2119) Unreported judgment of this Court dated 13.09.2021 in Suit No. 2019/2015 (A&Z Agro Industries (Pvt.) Ltd. v. Federation of Pakistan and others)