2024 PLP (Trib (PTD)

MUHAMMAD JAWED ZAKARIA, JUDICIAL MEMBER.

By this single order, we intend to disposed of above titled Miscellaneous Applications seeking grant of stay against the recovery of impugned tax demand has been filed at the instance of the applicant/ taxpayer.

2. When the applications came up for hearing, the learned counsel apprised that the department had forcefully with drawn the amounts from the accounts of the taxpayer maintained in Allied Bank by ignoring the directions of the Tribunal contained in the Order Sheet dated 29-10-2020 duly noted by the D.R. The learned counsel for the applicant/taxpayer has further apprised the Court that appeal of the taxpayer bearing ITAs Nos.967-A to 967-D/KB/2020 are pending adjudication before this Tribunal but in the meantime the Department has started taking coercive measure for recovery of the impugned tax demand, despite the fact that the appeal of the taxpayer has not gone through the scrutiny by an independent judicial forum. He has further submitted that the Applicant has a prima facie good arguable case with every likelihood of success. Lastly, he has prayed that the Misc. Application filed by the applicant/taxpayer may kindly be granted.

3. On other hand, the learned D.R. has regretfully submitted that the directions of the Tribunal in the aforementioned Order Sheet could not be conveyed to the concerned Officer due to oversight and such misfortunate of withdrawal of the amounts from the bank was happened for which he sought pardon from this court and handed over and remitted the original pay orders to the taxpayer.

4. The arguments advanced by the representatives of both the sides have been heard and relevant record perused. It is observed and strictly directed by us in a number of cases that the directions of the Tribunal are binding to the Tax Department even it is given through Order sheet. By passing of the orders of the Tribunal by the authorities below tantamount to misconduct and contempt. It is hoped that the department in future shall be more cautious and vigilant. However, at this time we observed that in all fairness, equity and justice, a taxpayer should not be forced to pay a demand created by a Revenue Authority unless the order creating such demand has undergone the scrutiny of at least one independent forum. Similar view was taken in a subsequent decision by the Hon'ble High Court in case titled "Sun-Rise Bottling Company (Pvt.) Ltd. v. Federation of Pakistan" (2006 PTD 535), wherein it was observed that access to justice was a fundamental right and essential feature of such right was determination of any grievance or dispute by an independent Tribunal 'In this regards, it was observed that the Appellate Tribunal provides the independent adjudication of the impugned tax liability. In case titled "Karachi Shipyard and Engineering Works Ltd. v. Additional Collector, Customs Excise and Sales Tax (Adjudication-III), Government of Pakistan, Karachi" (2006 PTD 2207), the Hon'ble Division Bench of Sindh High Court endorsed the principle laid down in the above mentioned judgments.

5. In view of the aforementioned principle that has been consistently followed by this Court in a number of decisions no coercive measures are to be adopted for recovery of the disputed tax liability till the decision by an independent forum. If any authority is further needed one may place reliance on (2003) PTD 1746 = 89 Tax

177. Since the appeal, filed by the Taxpayer, is pending before the Tribunal, therefore, in the light of the above principle, coercive measures for the recovery are not to be effected.

6. Admittedly, the appeal of the applicant/taxpayer assailing the treatment meted out by the revenue authorities is pending decision before this Tribunal. We find force in the arguments advanced by the learned counsel of the applicant/taxpayer that at this stage initiation of recovery proceedings by the revenue authorities without scrutiny by an independent judicial forum is not justified. Therefore, keeping in view this hardship, we are inclined to grant stay against the recovery of impugned tax demand for a period of 60 (sixty) days or till the decision of the appeals, whichever is earlier.

7. All the miscellaneous applications are allowed to the above extent. MQ/61/Tax(Trib) Applications allowed.