Prerequisite

2026 SCMR 130 SUPREME-COURT Judicial Precedent

Ss. 21(c) & 153Rebate granted by taxpayer to its customer for exclusive sale of productsDepartment treating rebate as payment for advertising servicesEffectQuestion raised whether such rebate attracted withholding taxDeduction of tax, requirement ofPrerequisite

Actual payment to move from the person mandated to deduct to the person receiving the same and for whom it becomes advance payment of tax

Scope

The present case had arisen from the Income Tax Ordinance, 2001 concerning the tax year 2003

The department filed a reference before the High Court challenging a decision of the Appellate Tribunal that favored the respondent company

The dispute revolved around a "rebate" amounting to Rs. 7,893,898/- which the respondent company had given to its customer in exchange for sales exclusivity

The department treated this rebate as a payment for "advertising services" under Section 153(1)(b) of the Ordinance and disallowed it under Section 21(c), considering it taxable as "royalty"

The High Court ruled in favor of the respondent company leading the department to file the present civil petition for leave to appeal before the Supreme Court

Pivotal issue for determination before the Supreme Court was as to "Whether the rebate or discount allowed by respondent company to its customer, for ensuring exclusive sale of its products, constituted an actual "payment" for "advertising services" attracting withholding tax under Section 153(1)(b) of the Income Tax Ordinance, 2001"?

Held: It was clear that Section 153(1)(b) could not possibly have applied to the facts and circumstances of the present case

For the provision to apply would have required a payment being made by the taxpayer to the customer, from which the former had to deduct tax at the prescribed rate

The amount of "payment" allegedly made by the taxpayer to the customer in the present case was wholly notional and nothing was in fact paid

For Section 153(1)(b) to apply required an actual payment moving from the person mandated to deduct to the person receiving the same and for whom it becomes advance payment of tax

The provision had no application and nothing further needed to be examined

The department's claim failed at its very inception being, on a correct application of the law, entirely outside any applicability of the provision

An actual payment had to be shown moving from the taxpayer to the customer and here there was nothing of the sort at all, hence, the section did not apply

Leave to appeal was refused and petition was dismissed, in circumstances.

2026 SCMR 105 SUPREME-COURT Judicial Precedent

Quantum of punishmentDeterminationPrerogative of the employerPrerequisiteMisconduct has to be established and employee should be found guiltyProportionality of the penaltyScope

As soon as the act of misconduct is established and the employee is found guilty after due process of law, it is the prerogative of the employer to decide the quantum of punishment, out of the various penalties provided in law

The casual or unpremeditated observation that the penalty imposed is not proportionate with the seriousness of the act of misconduct is not adequate but the order must show that the court and tribunal has applied its mind and exercised its discretion in a structured and lawful manner

Court or tribunal in exceptional or appropriate cases or circumstances, may examine the quantum of punishment to figure out the proportionality and reasonableness and may also nullify or overturn such punishment if found out of proportion vis-à-vis the act of misconduct and in this scenario, the punishment awarded by the competent authority may be revisited and converted into some lesser or alternative punishment if provided under the law but in order to exercise such jurisdiction for mitigation, the set of circumstances of each and every case have to be considered minutely.

2026 PTD 29 SUPREME-COURT Judicial Precedent

Ss. 21(c) & 153Rebate granted by taxpayer to its customer for exclusive sale of productsDepartment treating rebate as payment for advertising servicesEffectQuestion raised whether such rebate attracted withholding taxDeduction of tax, requirement ofPrerequisite

Actual payment to move from the person mandated to deduct to the person receiving the same and for whom it becomes advance payment of tax

Scope

The present case had arisen from the Income Tax Ordinance, 2001 concerning the tax year 2003

The department filed a reference before the High Court challenging a decision of the Appellate Tribunal that favored the respondent company

The dispute revolved around a "rebate" amounting to Rs. 7,893,898/- which the respondent company had given to its customer in exchange for sales exclusivity

The department treated this rebate as a payment for "advertising services" under Section 153(1)(b) of the Ordinance and disallowed it under Section 21(c), considering it taxable as "royalty"

The High Court ruled in favor of the respondent company leading the department to file the present civil petition for leave to appeal before the Supreme Court

Pivotal issue for determination before the Supreme Court was as to "Whether the rebate or discount allowed by respondent company to its customer, for ensuring exclusive sale of its products, constituted an actual "payment" for "advertising services" attracting withholding tax under Section 153(1)(b) of the Income Tax Ordinance, 2001"?

Held: It was clear that Section 153(1)(b) could not possibly have applied to the facts and circumstances of the present case

For the provision to apply would have required a payment being made by the taxpayer to the customer, from which the former had to deduct tax at the prescribed rate

The amount of "payment" allegedly made by the taxpayer to the customer in the present case was wholly notional and nothing was in fact paid

For Section 153(1)(b) to apply required an actual payment moving from the person mandated to deduct to the person receiving the same and for whom it becomes advance payment of tax

The provision had no application and nothing further needed to be examined

The department's claim failed at its very inception being, on a correct application of the law, entirely outside any applicability of the provision

An actual payment had to be shown moving from the taxpayer to the customer and here there was nothing of the sort at all, hence, the section did not apply

Leave to appeal was refused and petition was dismissed, in circumstances.

2026 PLC 53 SUPREME-COURT Judicial Precedent

Quantum of punishmentDeterminationPrerogative of the employerPrerequisiteMisconduct has to be established and employee should be found guiltyProportionality of the penaltyScope

As soon as the act of misconduct is established and the employee is found guilty after due process of law, it is the prerogative of the employer to decide the quantum of punishment, out of the various penalties provided in law

The casual or unpremeditated observation that the penalty imposed is not proportionate with the seriousness of the act of misconduct is not adequate but the order must show that the court and tribunal has applied its mind and exercised its discretion in a structured and lawful manner

Court or tribunal in exceptional or appropriate cases or circumstances, may examine the quantum of punishment to figure out the proportionality and reasonableness and may also nullify or overturn such punishment if found out of proportion vis-à-vis the act of misconduct and in this scenario, the punishment awarded by the competent authority may be revisited and converted into some lesser or alternative punishment if provided under the law but in order to exercise such jurisdiction for mitigation, the set of circumstances of each and every case have to be considered minutely.

2026 PLD 1 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S.5Punjab Healthcare Commission Act (XVI of 2010), S.23(2)Condonation of delay, seeking ofPrerequisiteSufficient cause

Condonation of delay is not a matter of right, and the petitioner has to set out the case showing sufficient reasons that prevented him from seeking the prescribed remedy within the stipulated period of limitation.

2023 PLC(CS) 214 SUPREME-COURT Judicial Precedent

S. 4(1)Appeal before the Service Tribunal, filing ofPrerequisiteDepartmental appeal

To avail any remedy before the Service Tribunal, it is necessary that a departmental appeal is filed before the competent forum

If no such departmental appeal is filed, a subsequent service appeal filed would not be maintainable.

2022 SCMR 2096 SUPREME-COURT Judicial Precedent

S. 4(1)Appeal before the Service Tribunal, filing ofPrerequisiteDepartmental appeal

To avail any remedy before the Service Tribunal, it is necessary that a departmental appeal is filed before the competent forum

If no such departmental appeal is filed, a subsequent service appeal filed would not be maintainable.

2020 CLD 151 ISLAMABAD Judicial Precedent

R. 26(3)Extending validity of bidsPrerequisiteExistence of 'exceptional circumstances' is a prerequisite for requiring bidders to extend validity of their bids

Once a procuring agency complies with requirements of R. 26(3) of Public Procurement Rules, 2004 by recording existence of such circumstances in writing, bidders can be asked to extend validity of their bids

Reasons recorded pursuant to R. 26(3) of Public Procurement Rules, 2004 were justiciable

Recorded reasons have to be such as would make out a case for a necessity in extension in bid validity period.

2020 MLD 379 ISLAMABAD Judicial Precedent

R. 26(3)Extending validity of bidsPrerequisiteExistence of 'exceptional circumstances' is a prerequisite for requiring bidders to extend validity of their bids

Once a procuring agency complies with requirements of R. 26(3) of Public Procurement Rules, 2004 by recording existence of such circumstances in writing, bidders can be asked to extend validity of their bids

Reasons recorded pursuant to R. 26(3) of Public Procurement Rules, 2004 were justiciable

Recorded reasons have to be such as would make out a case for a necessity in extension in bid validity period.

2019 YLR 2213 PESHAWAR-HIGH-COURT Judicial Precedent

Art. 43Confession in jointly convicted accusedPrerequisiteRetracted confessional statement by one accused cannot be used against other accused

Confession of accused is circumstantial evidence against co-accused under Art. 43 of Qanun-e-Shahadat, 1984 which needs strong corroboration.

2013 SCMR 372 SUPREME-COURT Judicial Precedent

Minor/major penalty, award ofPrerequisite

Competent authority while awarding the penalty had to keep in mind the gravity of the charge.

2013 MLD 891 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 498Pre-arrest bailPrerequisite

Mala fide was a sine qua non for grant of pre-arrest bail.