Summary: Summary pending

Summary: (a) Maxim--- ----Nemo pro alterius facto punietur---Meaning---No one should be punished for the deed of another. (b) Sales Tax Act (VII of 1990)--- ----Ss. 7, 8 (1)(ca) & 73---Input tax adjustment---Conditions---Failure of supplier to deposit sales tax received from purchaser---Dispute pertained to denial of input tax credit to taxpayers in exercise of authority under S. 8(1)(ca) of Sales Tax Act, 1990 when the tax was duly paid but the supplier had been delinquent in depositing such sales tax in the government treasury---Validity---When conditions prescribed by S. 7 of Sales Tax Act, 1990 for purposes of input tax adjustment are satisfied and payment for such supply has been made in compliance with the requirements of S. 73 of Sales Tax Act, 1990 the purchaser is entitled to seek input tax adjustment unless the same is prohibited by S.8 of Sales Tax Act, 1990---System of rule of law is based on individual responsibility and liability and a taxpayer cannot be made to suffer due to delinquency of another, unless the taxpayer is complicit in such wrongdoing---Sales tax is charged in VAT mode and where a purchaser has paid the tax due for the value addition attributable to a supplier, as part of consideration for the supply paid in accordance with requirements of S. 73 of Sales Tax Act, 1990 it cannot be assumed that the Legislature intended to subject such purchaser to double-taxation for the supplier’s failure to deposit the sales tax received from the purchaser in the treasury---Purchaser, in paying input tax to supplier as part of consideration for supply, acts in accordance with requirements imposed by provisions of Sales Tax Act, 1990 and where the supplier, who receives such sales tax payment as an agent on behalf of the State, fails to deposit the same with the treasury, it is the supplier that is at fault and ought to be penalized by tax authorities and not the purchaser---Once a purchaser discharges its obligation to pay input tax to a supplier in the manner prescribed by law, there accrues a proprietary entitlement to benefit from such tax payment by seeking its adjustment against output tax due from him, when not otherwise prohibited by S. 8 of Sales Tax Act, 1990 and such entitlement cannot be denied due to any wrongdoing or delinquency on the part of supplier that the purchaser is neither complicit with nor has any control over---High Court declared that any contrary interpretation of Ss. 8(1)(ca) & 8A of Sales Tax Act, 1990 would be in breach of Arts. 4, 10A, 23, 24 & 25 of the Constitution---Reference was disposed of accordingly. D.G. Khan Cement Company Ltd. v. Federation of Pakistan PLD 2013 Lah. 693; Total Parco Pakistan Ltd. v. Pakistan PTCL 2021 CL 576; Commissioner Inland Revenue v. Messrs Gadoon Textile Mills, Swabi C.Ps. Nos. 1830 to 1847/2022; Commissioner Inland Revenue Zone-IV, Large Taxpayer Unit, Karachi v. Messrs Al-Abid Silk Mills Ltd., Karachi 2023 PTD 1492; The Commissioner Inland Revenue, Lahore v. Messrs Eagle Cables (Pvt.) Ltd., Lahore (C.P.L.A 2400-L/2022); The Commissioner Inland Revenue, Legal Zone, Large Taxpayers Office, Lahore and another v. Messrs Mayfair Spinning Mills Ltd. and others 2025 SCMR 01; Pakistan Beverages Ltd. v. Large Taxpayers Unit 2010 PTD 2673 and Waseem Ahmed and another v. Federation of Pakistan through Chairman and 4 others 2014 PTD 1733 ref. Hafiz Muhammad Idris and Syed Farid Bukhari for Applicants (in S.T.R. No.01 of 2015). Osama Shahid for Applicants (in S.T.Rs. Nos. 20/2015, 11/2016 and 28 of 2016). Dr. Farhat Zafar for Applicants (in S.T.Rs. Nos. 11, 12, 13, 15, 16 and 35 of 2015). Hassan Ali Khan for Applicants (in S.T.R. Nos. 45 of 2015). Ali Nawaz Kharal for Applicants (in S.T.R. Nos. 34 of 2015 and 33/2019). Syed Muhammad Abbas for Applicants (in I.C.A. No. 431 of 2016). Makhdoom Ali Khan, Senior Advocate Supreme Court, Khawaja Aizaz Ahsan and Hashim Khalil for Respondent (in I.C.A. 431 of 2016). Osama Shahid for Respondents (in S.T.R. No.01 of 2015). Wasim Abid for Respondents (in S.T.Rs. Nos. 11, 12 and 13 of 2015). Shaheer Bin Tahir for Respondents (in S.T.R No. 33 of 2019). Syed Ali Murtaza Abbas for Respondent (in S.T.R No. 11 of 2016). Sarmad Munir for Respondent (in S.T.R. No. 35 of 2015). Date of hearing: 24th September, 2025.

Summary: Scope of payment of further tax post Finance Act, 2017 amendments in section 4 of the Sales Tax Act, 1990 in the context of zero rated regime. 99First Appeal Against Order- First Appeal against order (Under Special Laws) 117-23 MST. MAGHMA PARVEEN VS PUBLIC AT LARGE ETC Mr. Justice Ahmad Nadeem Arshad 02-12- 2025 2025 LHC 7052

Summary: (a) Sales Tax Act (VII of 1990)--- ----Ss. 11, 33 & 37A---Sales tax liability---Determination---Raid, conducting of---Part heard case, transfer of---Scope---Petitioner / taxpayer was aggrieved of raid conducted by authorities on its premises and sought quashing of FIR registered by authorities---Question raised was that during proceedings before Judge in Chambers of High Court proceedings could not be transferred to Division Bench of High Court---Held: There was no authority vested in High Court or office of the Chief Justice of High Court to transfer a part heard matter from one Bench to another in exercise of administrative powers---Contrary proposition would be in breach of principle of judicial independence---Determination of criminal liability was contingent upon prior determination of civil rights and obligations of taxpayers---State was to first determine civil tax liability of petitioners / taxpayers through assessment proceedings undertaken pursuant to S. 11 of Sales Tax Act, 1990---Once such liability was ascertained and quantified on a balance of probabilities, only then the State could initiate criminal proceedings for the purposes of S. 33 of Sales Tax Act, 1990 to establish beyond reasonable doubt that petitioners / taxpayers were liable for an offence under such provision and the penalty would follow---Exercise of authority under S. 37A of Sales Tax Act, 1990 against petitioners / taxpayers or their officers or directors for a purported offence under S. 33 of Sales Tax Act, 1990 was devoid of legal authority and of no legal effect---High Court in exercise of Constitutional jurisdiction quashed the FIR registered against petitioners / taxpayers---Constitutional petition was allowed in circumstances Taj International (Pvt.) Ltd. and others v. Federal Board of Revenue and others 2014 PTD 1807; Directorate of Intelligence and Investigation-FBR v. Taj International (Pvt.) Ltd. and others 2025 PTD 1270; Collector of Sales Tax v. Mega Tech 2005 SCMR 1166; Agha Steel Industries Ltd. v. Directorate of Intelligence and Investigation 2019 PTD 2119; Waseem Ahmed v. Federation of Pakistan 2014 PTD 1733; Molasses Trading and Export (Pvt.) Limited v. Federation of Pakistan and others 1993 SCMR 1905; Zikar v. Government of State of MP AIR 1951 Nagpur 11; Chundra Gupta v. Secretary AIR 1995 SC 44; Crown v. Abdul Aziz PLD 1952 Sindh 1; Abdul Aziz v. PIA PLD 1995 Kar. 566; Human Rights case PLD 2019 SC 183; M. Imtiyaz v. M. Naeem PLD 2023 SC 306; Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187; M.H. Khondkar v. The State PLD 1966 SC 140; Islamic Republic of Pakistan v. Abdul Wali Khan PLD 1976 SC 57; Noor Fatima v. Federation of Pakistan (Writ Petition No.2667 of 2024); Muhammad Azam Khan Swati v. The State 2023 PCr.LJ 350; Anil Kumar Verma v. U.P. State Industrial Development (Writ-A No.5822 of 2014); Rajkot Cancer Society v. Municipal Corporation, Rajkot AIR 1988 Gujrat 63; Neetu Singh v. Rajeev Saumitra TR.P.(C) 55/2015), Suo Motu Case No.4 of 2022 PLD 2023 SC 387; Muhammad Imtiyaz v. Ch. Muhammad Naeem and others PLD 2023 SC 306; Human Rights Case No. 14959-K of 2018; PLD 2019 SC 183; Raja Amer Khan v. Federation of Pakistan PLD 2025 SC 869; Waris Mean v. The State PLD 1957 SC (Pak.) 157; Syed Mushahid Shah v. Federal Investigation Agency 2017 SCMR 1218; Messrs East and West Steamship Company v. Pakistan PLD 1958 SC (Pak.) 41; Manzoor v. The State PLD 1972 SC 81; Mst. Sughran Bibi v. The State PLD 2018 SC 595; Khizar Hayat and others v. Inspector General of Police (Punjab), Lahore and others PLD 2005 Lah. 470; Saad Sumair v. National Accountability Bureau PLD 2022 Isl. 371; Amjad Mustafa Malik v. Director General, National Accountability Bureau PLD 2021 Isl. 266; Muhammad Akhter v. The State PLD 1968 SC 281; Doctor Nauman Hamid Niaz v. Federation of Pakistan PLD 2025 Isl. 24 and Collector of Customs, MCC Islamabad and others v. Israr and others 2021 PTD 501 rel. (b) Interpretation of statutes--- ----Fiscal laws---Object, purpose and scope---Penalizing tax evaders---Provisions of fiscal statutes are to be understood and interpreted to give effect to the object and purpose of such statutes---Object and purpose of such statutes is to collect tax and ensure voluntary tax compliance---Penalizing tax evaders or slapping jail terms on delinquent taxpayers are not stand-alone objects of the Sales Tax Act, 1990---Seeking activation of criminal justice machinery against delinquent taxpayers in a trigger-happy manner as an initial measure cannot be the object of any rational tax administration. (c) Sales Tax Act (VII of 1990)--- ----S. 2(37)---Tax fraud---Proof---Principle---Allegation of tax fraud cannot stand in a set of circumstances where after assessment proceedings, it is concluded by relevant adjudicatory forums that a taxpayer is not liable for understatement or underpayment of tax or has not made a claim for tax credit for tax refund that overstates its entitlement---That is why the tax liability for tax fraud is contingent on prior determination of a taxpayer’s civil liability. (d) Interpretation of statutes--- ----Fiscal laws---Penalty provision---Scope---Penalty provisions in a tax statute, where penalty is linked to “tax involved” are to be interpreted keeping in view the principle of proportionality. CIR v. General Tyre Ltd. 2013 PTD 387 and Kite Maker v. ITO (2021) 483 I.T.R 353 (Karela) rel. (e) Sales Tax Act (VII of 1990)--- ----Ss. 2(37) & 11---Tax fraud---Attempt---Principle---No case of an attempt of offence can be made out in circumstances where as a consequence of assessment proceedings undertaken pursuant to S. 11 of Sales Tax Act, 1990, the adjudicatory authorities come to the conclusion that no case of understatement / underpayment of tax liability or overstatement of entitlement to tax credit / tax refund is made out against a taxpayer. Directorate of Intelligence and Investigation-FBR v. Tai International (Pvt.) Ltd. and others 2025 PTD 1270 rel. Dr. Farogh Naseem, Sardar Haseeb Iftikhar Ahmed and Salman Abbas for Petitioners (in Writ Petitions Nos.3646 and 3647 of 2024). Sheikh Zafar ul Islam, Tanveer Ahmad, Danial Zafar and Usama Rauf for Petitioners (in Writ Petitions Nos.3757 and 3943 of 2024). Bilal-ud-Din Butt and Naveed Ahsan Sial for Petitioners (in Writ Petition No.3781 of 2024). Barrister Muhammad Umer Riaz, Umer Ejaz Gillani, Rana Rehan, Barrister Ali Aun, Muhammad Alee, Ch. Ehtisham ul Haq, Syed M. Nauman Shah, Rehan Seerat and Ch. Kamil Hayat for the Tax Department along with Razi ul Haq Qureshi, Deputy Director, Intelligence and Investigation, Inland Revenue, Islamabad for Respondents. Fahad Khan Tareen, Assistant Attorney General for Respondents. Date of hearing: 19th August, 2025. BABAR SATTAR, J.--- Through this judgment the afore-titled Writ Petition as well as Writ Petitions listed in Annexure-A to this judgment will be decided as they involve the common question of what legal prerequisites must be abided by the State before initiating criminal proceedings in exercise of authority under Section 37A of the Sales Tax Act, 1990 ("Sales Tax Act").

Summary: Sales Tax Act (VII of 1990)--- ----Ss. 2(12) & 3---Carbon credits not ‘goods’---Scope---Carbon credits---Trading / sale abroad---Whether taxable supplies---Appellate Tribunal Inland Revenue (‘Tribunal’) held that the Certified Emission Reduction certificates fell within the meaning of goods as defined in S. 2(12) of the Sales Tax Act, 1990 (‘the Act, 1990’) and the consideration received from outside Pakistan by the company/taxpayer, arising from the sale of Certified Emission Reduction certificates in international emissions trading markets, was subject to sales tax under the Act, 1990---Validity---Undisputedly, no provision of Sales Tax Act, 1990 (‘the Act, 1990’) explicitly or specifically defines Certified Emission Reduction certificates (Carbon credits) as taxable supplies; and attempt to bring those within the ambit of definition of 'goods' in terms of S.2(12) of the Act, 1990 tantamount to rewriting the scope of charging provision under S. 3 of the Act, 1990---Department / respondent failed to explain that how trading or sale of Carbon credits, outside Pakistan, could be construed as taxable supply, made in furtherance of taxable activity---Merely classifying carbon credits as goods is not enough to otherwise bring transaction within the ambit of sales tax regime---Carbon credits are, at best, construable as entitlement accrued in lieu of efforts made for reducing carbon emissions---Commissioner (Appeals) correctly annulled claim raised against carbon credits and Tribunal erred by treating them as goods [though acknowledging them as intangible(s)---Thus, the proposed questions were answered in affirmative in favour of Applicant/Company---High Court annulled the decisions of the appellate Tribunal Inland Revenue and Order-in-Original---Reference application , filed by the Company, was allowed accordingly. Asad Zaman Tarar for Applicant. Iftikhar Majid for Respondent.

Summary: Sale/trading of carbon credits, earned by the environment complaint authority, is not a taxable supply in furtherance of taxable activities. 131Writ Petition- Religion- Zakat & Ushr 2546-18 FOUNDATION UNIVERSITY VS M/O RELIGIOUS AFFARIS ETC Mr. Justice Jawad Hassan 18- 11- 2025 2025 LHC 8339

Summary: (a) Passports Rules, 2021--- ----Rr. 21, 22(2) & 23(6)---General Clauses Act (X of 1897), S. 24-A---Passport Control List (PCL), placing name on---Procedure---Speaking order---Order for placement of a citizen on PCL cannot be issued in a mechanical fashion without recording reasons and stating grounds applicable to the circumstances of the citizen in terms of R. 23(6) read with R.21 of Passports Rules, 2021---Unless a penal order directing that passport of a citizen be impounded, confiscated, cancelled or inactivated is passed while identifying relevant grounds that mandate that the citizen’s right to liberty and travel ought to be interfered with in accordance with law, such order would not be sustainable in the eyes of law---It is only where an order finding that a citizen’s passport is liable to be impounded, confiscated, cancelled or inactivated has been so passed, can the relevant Division of Federal Government and Directorate General, Immigration and Passport discharge their ministerial function of placing name of such individual on PCL in terms of R. 22(2) of Passport Rules, 2021. Shabana Noor Ahmed v. D.G. Immigration and Passport PLD 2019 Sindh 456 rel. (b) General Clauses Act (X of 1897)--- ----S.24-A---Reasons for an order---Object, purpose and scope---Reasoned order is a sine-qua-non for exercise of discretion, especially when it impinges on the fundamental rights of a citizen---Substance of reasons then forms part of the inquiry undertaken by a Court while exercising judicial review powers, whereby Court can satisfy itself that the reasons are just and proportionate to legitimate State interest being pursued by executive authorities to pursue the objects of law under which such authority is being exercised. (c) Constitution of Pakistan--- ----Art. 10A---Right of fair trial and due process of law---Scope---Provision of Art. 10A of the Constitution has been enacted to give right of due process, a Constitutional standing. (d) Sales Tax Act (VII of 1990)--- ----S. 2(6A)---Exit from Pakistan (Control) Ordinance (XLVI of 1981), S.2---Exit from Pakistan (Control) Rules, 2010, R.2(d)---Constitution of Pakistan, Arts. 4, 9, 10A, 15, 25 & 199---Constitutional petition---Exit Control List---Freedom of movement---Due process of law---Tax defaulter---Placing name on Exit Control List---Petitioner was aggrieved of placing his name on Exit Control List on the allegation of tax default committed by him---Validity---In holding that a person is a defaulter under the provisions of Sales Tax Act, 1990 there must be a finding made after assessment and adjudicatory proceedings that a demand for sales tax due and payable remains outstanding against that person and is yet to be paid---Petitioner could not be considered to be in default of tax or liabilities in terms of R. 2(d) of Exit from Pakistan (Control) Rules, 2010 merely because authorities had formed an opinion that he was liable for sales tax fraud for illegally seeking income tax adjustment---On the basis of such opinion, a penalty could not be inflicted on petitioner in the form of curtailing his civil rights and liberties by placing his name on ECL or PCL or PNIL pending determination of the fate of any criminal charge brought against him or adjudicatory proceedings initiated against him under the provisions of Sales Tax Act, 1990---High Court declared that placement of petitioner’s name on ECL, PCL and/or PNIL was tantamount to colorable exercise of authority in breach of provisions of Passports Act, 1974, Exit from Pakistan (Control) Ordinance, 1981 and Arts. 4, 9, 10A, 15 & 25 of the Constitution and such actions were of no legal effect---High Court directed Federal Government to ensure that name of petitioner was removed from ECL, PCL and PNIL and no fetters were to be placed on the rights of petitioner to travel on the ground that he was liable for tax fraud, unless it was determined through the adjudicatory process provided under provisions of Sales Tax Act, 1990 that he was a defaulter---Constitutional petition was allowed, in circumstances. Montgomery Floor and General Mills Ltd. v. The Director, Food Purchase PLD 1957 Lah. 914; Zahur Ilahi v. The State PLD 1977 SC 273; Farooq Ahmed Khan Laghari v. Federation of Pakistan PLD 1999 SC 57; Pakistan Muslim League (N) v. Federation of Pakistan PLD 2007 SC 642; Government of Pakistan v. Dada Amir Haider Khan PLD 1987 SC 504; Dr. Shireen M. Mazari v. Federation of Pakistan 2024 MLD 1020; Fauji Foundation v. Shamimur Rehman PLD 1983 SC 457; Chairman, NAB v. Nasar Ullah PLD 2022 SC 497; Federation of Pakistan v. E-movers (Pvt.) Ltd. 2022 SCMR 1021; CIR v. M/s Rose Food Industries 2023 SCMR 2070; Sheikh Shan Ilahi v. Federation of Pakistan PLD 2023 Lah. 359; Tabish Badar v. Ministry of Interior 2023 CLC 1457; Sabir Iqbal v. Cantonment Board PLD 2019 SC 189; Shehryar Afridi v. Federation of Pakistan (W.P. No.2491 of 2023); Wajid Shamas-ul-Hassan v. Federation of Pakistan PLD 1997 Lah. 617; Federal Government v. Miss Ayan Ali 2017 SCMR 1179; Mian Ayaz Anwar v. The Federation PLD 2010 Lah. 230; Kent v. Dulles 357 US 116 (1958); Aptheker v. Secretary of State 378 US 500 (1964); Satwant's case AIR 1967 SC 836; Sheikh Mohammad Mansoor v. Government of Pakistan 2008 MLD 955; Sohail Latif v. Federation of Pakistan PLD 2008 Lah. 341; Munir Ahmed Bhatti v. Government of Pakistan PLD 2010 Lah. 697; Masood Ahmed v. Federation of Pakistan 2010 YLR 28; Mian Munir Ahmed v. Federation of Pakistan 2008 YLR 1508; Zurash Industries v. Federation of Pakistan PLD 2011 Kar. 385; Gen. (Retd.) Parvez Musharraf v. Pakistan PLD 2014 Sindh 389; Federation v. Gen. (Retd.) Pervez Musharraf PLD 2016 SC 570; Syed Masood Hussain Shah v. Federation of Pakistan 2015 MLD 124; Mohammad Sadiq v. Federation of Pakistan PLD 2016 Sindh 263; Tanver Hussain Manji v. Federation of Pakistan 2016 CLC 1534; Yusuf J. Ansari v. Government of Pakistan PLD 2016 Kar. 388; Riaz Ahmed v. Government of Pakistan PLD 2014 Isl. 29; Mst. Nasreen Begum v. Ministry of Interior PLD 2012 Isl. 21; Dr. Joseph Wilson v. Federation of Pakistan 2017 PCr.LJ 1569; Syed Zulfikar Abbas Bukhari v. Federation of Pakistan PLD 2019 Isl. 316; Nadir Mukhtar v. D.G. Immigration and Passport (Writ Petition No.130 of 2025); Shabana Noor Ahmed v. DG Immigration and Passports PLD 2019 Sindh 456; Federal Government of Pakistan v. Government of Punjab PLD 1991 SC 505; Taj International (Pvt.) Ltd. v. FBR 2014 PTD 1807; Directorate of Intelligence and Investigation-FBR v. Taj International (Pvt.) Ltd. and others PLD 2025 SC 633; Wasatullah Jafferi v. Ministry of Interior PLD 2014 Sindh 28 and Jahangir Mehmood Cheema v. Government of Pakistan PLD 2015 Lah. 301 ref. Rehan Kayani and Barrister M. Usama Rauf for Petitioner. Fahad Khan Tareen, Assistant Attorney General for Respondents. Hafiz Ahsaan Ahmed Khokhar for FBR. Moazzam Habib along with Respondent No.3. Malik Abdur Rehman, State Counsel. Nawaz Khan, Director (Policy), Directorate General of Immigration and Passports, Islamabad. Muhammad Azeem Khan, Section Officer (ECL) Ministry of Interior, Islamabad. Muhammad Riaz, Assistant Director (Legal), FIA. Date of hearing: 26th August, 2025.

Summary: Income Tax Ordinance (XLIX of 2001)--- ----S. 133 [as amended through the Finance Act, 2025 reverting the enactment of the Tax Laws (Amendment) Act, 2024]---Enactment---Retrospective effect---Procedural changes---Effect---Beneficial enactment---Scope---The Finance Act, 2025, reverted to the old adjudicatory scheme having one forum of appeal i.e. before the Appellate Tribunal Inland Revenue (ATIR)---Reference Applications against order of Commissioner Inland Revenue (Appeals) (CIR (Appeal) filed before the High Court in view of enactment of the Tax Laws (Amendment) Act, 2024---Remitting to ATIR---Scope---The amendments introduced through the Finance Act, 2025, restoring a right of appeal before the ATIR, is to be given retrospective effect and references filed against orders of CIR (Appeals) be remitted to the ATIR to be treated as appeals and decided in accordance with law---Law as to how a change of forum for adjudication of a dispute or controversy is to be treated as procedural law and such procedural law applies to pending matters, to the extent that they do not adversely affect the rights of parties and do not reopen past and closed transactions---Besides, the amendments made with regard to the forum for adjudication to the Income Tax Ordinance, 2001, through the Finance Act, 2025, was beneficial in nature, being curative and remedial legislation , as it provided for an additional forum for appeal and ought to apply retrospectively---Thus, the changes brought to the forum for hearing a grievance against decision of CIR (Appeals) by virtue of amendments introduced to the ITO through the Finance Act, 2025, being procedural in nature, would apply retrospectively to all pending cases---Said amendment by virtue of providing an additional forum for appeal before the ATIR, as it existed prior to enactment of the Tax Laws (Amendment) Act, 2024, also being beneficial ought to apply retrospectively---Such application of the amendments introduced through the Finance Act, 2025, would, however, only apply to pending cases and not to matters that have attained finality and are past and closed transactions---Consequently, all references that had been filed against decisions of CIR (Appeals) directly before the High Court and were pending adjudication were liable to be remitted to the ATIR, which would treat them as appeals pending before the ATIR and decide them in accordance with law---High Court directed that the Court fee paid by the applicants, while filing of these references, be reimbursed to them---References applications were disposed of accordingly. Harris Hasan Syed v. The Commissioner Inland Revenue (I.T.R No.21137/2025); Adnan Afzal v. Capt. Sher Afzal PLD 1969 SC 187; Ch. Safdar Ali v. Malik Ikram Elahi and another 1969 SCMR 166; Hafiz Mohammad Abdullah v. Imdad Ali Shah and another 1972 SCMR 173; Mst. Yasmeen Nighat and others v. National Bank of Pakistan and others PLD 1988 SC 391; Yusuf Ali Khan Barrister-at-Law, Lahore v. Messrs Hongkonk and Shanghai Banking Corporation, Karachi and another 1994 SCMR 1007; Muhammad Shabbir and another v. Quaid-e-Azam University through Vice-Chancellor, Islamabad and others 2022 SCMR 487; Muslim Commercial Bank v. Punjab Labour Appellate Tribunal 2025 SCMR 303; Messrs Army Welfare Sugar Mills Ltd. and others v. Federation of Pakistan and others 1992 SCMR 1652; Commissioner of Income Tax v. Shahnawaz Ltd. and others 1993 SCMR 73 and Commissioner of Income Tax v. J.D. Sugar Mills Ltd. 2009 PTD 481 ref. Mirza Saqib Siddeeq, Waqas Ahmed, Hafiz Muhammad Idris, Syed Farid Bukhari, Wasim Abid, Barrister Usama Rauf, Faisal Jaffar, Nauman Rafique, Rana Sufyan Qayyum, Muhammad Ali Haider, Muhammad Mohsin Nazir, Ch. Naeem ul Haq and Ahmed Bin Aqeel for Applicants. Osama Shahid, Hassan Ali Khan, Rehan Seerat, Ch. Kamil Hayat, Ghulam Qasim Bhatti, Babar Bilal and Shazia Bilal for Tax Department. Dates of hearing: 6th, 7th and 10th November, 2025. BABAR SATTAR, J.--- Through this judgment we will decide the fate of the afore-titled Income Tax Reference as well as Income/Sales Tax References listed in Annexure-A to this judgment.

Summary: Income Tax Ordinance (XLIX of 2001)--- ----Ss.122(9), 177(1), 214-C & Second Schedule, Part IV, Clause 72B---Constitution of Pakistan, Art. 199---Constitutional petition---Petitioner / taxpayer assailed notice selecting its case for audit---Validity---Notice under S. 177(6) of Income Tax Ordinance, 2001 was issued on 20-05-2017, as the audit was to be conducted within the financial year---Completion of audit lingered due to failing of petitioner/taxpayer to convey concerns, as required under S. 177(6) of Income Tax Ordinance, 2001---No concerns were raised to the audit except a plea that it should be completed by 30-06-2017---No such construction could be attributed to S.177(6) of Income Tax Ordinance, 2001 which manifested and envisaged that concerns were invited on audit report---Taxpayer had no objections regarding conduct of audit and preparation of report thereby---Proceedings for audit concluded for all intent and purposes, and stage to amend assessment of the latest tax year had triggered and authorities issued notice under Ss. 122(9) & 111(1) of Income Tax Ordinance, 2001---No objection was raised by petitioner / taxpayer that the notice was beyond limitation provided in S.122 of Income Tax Ordinance, 2001---Petitioner / taxpayer failed to explain as to why response to notice dated 17-09-2021 was not filed and instead Constitutional petition was instituted---High Court in exercise of Constitution jurisdiction declined to interfere in the matter as there was no jurisdictional defect in issuance of notice dated 17-09-2021 and petitioner/taxpayer lacked cooperation / facilitation, to raise concerns to the audit report---Constitutional petition was dismissed in circumstances. Commissioner of Inland Revenue, Sialkot and others v. Messrs Allah Din Steel and Rolling Mills and others 2018 SCMR 1328; Messrs SKF Pakistan (Pvt.) Ltd. through Managing Director and others v. Federation of Pakistan through Secretary (Law and Justice Division) and others 2024 PTD 716; The Collector of Sales Tax, Gujranwala and others v. Messrs Super Asia Mohammad Din and Sons and others 2017 SCMR 1427; Abdul Ghani v. Federation of Pakistan and others 2019 PTD 764 and Nagina Silk Milk, Lyallpur v. The Income Tax Officer, A-ward Lyallpur and others PLD 1963 SC 322 distinguished. Zahid Imran Gondal and Muhammad Junaid for Petitioner. Rana Ghulam Hussain, Assistant Attorney General for Pakistan. Malik Muhammad Shahzad Awan for Respondents.

Summary: (1) True Import of Clauses (a), (h) & (i) of Sub-section (1) of Section 8, read with Sections 2(14) & 7 of the Sales Tax Act, 1990 and Admissibility of Input Tax paid to the Punjab Revenue Authority (PRA) against Services in terms of Section 2(38) read with Entry Nos. 14 & 16 of the Second Schedule of the Punjab Sales Tax on Services Act, 2012; (2) Interpretation of a Document for Taxation Purpose is the Ascertainment of the Meaning, which the Document would Convey to a Reasonable Person having all the Background Knowledge, which would have been reasonably available to the Parties in the Situation in which they were at the Time of the Contract; (3) A Document has to be read as a whole and not by Picking and Choosing a Particular Paragraph or Portion thereof. 162Misc. Writ 55743/25 Fauzia Qayyum through Abdul Qayoom Vs Additional District Judge etc Mr. Justice Malik Javid Iqbal Wains 03-11- 2025 2025 LHC 7806