Show cause notice

Appellant/taxpayer was aggrieved of show cause notice issued by authorities to initiate proceedings for not deducting withholding tax

Validity

If a taxpayer fails to collect or deduct tax from payments made during a tax year, such inaction is deemed as a default under section 161 of Income Tax Ordinance, 2001

Point that sets into motion the machinery of section 161 of Income Tax Ordinance, 2001 to determine tax liability is the failure to either collect tax or deduct it

Show cause notice highlighted discrepancies in valuation of imports and specified categories under which tax was applicable

This indicated that there was careful consideration of any failures to deduct tax, along with an assessment of underlying bases and amounts involved, therefore, the notice was not simply a fishing expedition

Supreme Court declined to interfere in the judgment passed by High Court as demand created against appellant/taxpayer was well-founded

Appeal was dismissed.

Appellant/taxpayer was aggrieved of show cause notice issued by authorities to initiate proceedings for not deducting withholding tax

Validity

If a taxpayer fails to collect or deduct tax from payments made during a tax year, such inaction is deemed as a default under section 161 of Income Tax Ordinance, 2001

Point that sets into motion the machinery of section 161 of Income Tax Ordinance, 2001 to determine tax liability is the failure to either collect tax or deduct it

Show-cause notice highlighted discrepancies in valuation of imports and specified categories under which tax was applicable

This indicated that there was careful consideration of any failures to deduct tax, along with an assessment of underlying bases and amounts involved, therefore, the notice was not simply a fishing expedition

Supreme Court declined to interfere in the judgment passed by High Court as demand created against appellant/taxpayer was well-founded

Appeal was dismissed.

Term Show Cause Notice is a formal communication that informs the recipient of alleged legal violations and provides them an opportunity to respond, embodying the principles of natural justice and due process, which ensures a fair hearing and protection of rights before any adverse action is taken.

Term Show Cause Notice is a formal communication that informs the recipient of alleged legal violations and provides them an opportunity to respond, embodying the principles of natural justice and due process, which ensures a fair hearing and protection of rights before any adverse action is taken.

Petitioners / directors of exporter company were aggrieved of show cause notice issued by authorities intending to initiate proceedings for not repatriating export value of exported goods

Validity

Contravention of provision of S.12 (1) of Foreign Exchange Regulation Act, 1947, can only result in imposition of penalty and no punishment of sentence is prescribed

Issue of such punishment does not arise in case of S.23B read with S.12 (1) of Foreign Exchange Regulation Act, 1947

Statute which visits penal consequences on a person for his conduct must be construed strictly

Legislature did not intend to make directors and other officials of the company liable in case of violation / contravention of the provisions of S.12 (1) of Foreign Exchange Regulation Act, 1947

Action of authorities in sending show cause notice and summons in pursuance thereof for alleged contravention of provision of S.12 (1) of Foreign Exchange Regulation Act, 1947 by petitioners / directors could not be sustained under S.23B of Foreign Exchange Regulation Act, 1947, which by its terms did not attach any penalty to petitioners / directors of exporter company

High Court set aside show cause notice and summons issued against petitioners / directors as the same were without lawful authority and of no legal effect

Constitutional petition was allowed accordingly.

Purpose of a show cause notice and essential elements to which a show cause notice must conform stated.

Purpose of a show cause notice and essential elements to which a show cause notice must conform stated.

Petitioner company was aggrieved of issuance of show cause notice by Competition Commission under Regln. 16(2) of Competition Commission (General Enforcement) Regulations, 2007, as a complaint had been filed by respondent company alleging deceptive marketing practices and an inquiry officer had been appointed

Validity

In terms of deceptive marketing practices, jurisdiction of Competition Commission under Competition Act, 2010 and Intellectual Property Organization or the Tribunal under Intellectual Property Organization of Pakistan Act, 2012, were distinct and separate in terms of ambit and scope of such laws and did not amount to any inconsistency or conflict of jurisdiction

Show cause notice issued by Competition Commission was not without jurisdiction

Constitutional jurisdiction of High Court as a normal rule could not be invoked on mere suspicion or apprehension when no substantive right was infringed and aggrieved party had right to advance its defence in response to a notice

Challenge to a show cause notice in constitutional jurisdiction at premature stage and tendency to bypass remedy provided under concerned statute amounted to fetter rights conferred on statutory functionaries specially constituted for the purpose to initially decide the matter

Objections of petitioner company would have been decided by Competition Commission during proceedings under show cause notice but such an occasion did not arise due to filing of petition before High Court

Petitioner company did not approach High Court with clean hands and resorted to uncalled for litigation, obstructing the Commission as a regulator empowered under the law to undertake and perform its routine functions and duties

High Court declined to interfere in the matter

Constitutional petition was dismissed, in circumstances.

Petitioner company was aggrieved of issuance of show cause notice by Competition Commission under Regln. 16(2) of Competition Commission (General Enforcement) Regulations, 2007, as a complaint had been filed by respondent company alleging deceptive marketing practices and an inquiry officer had been appointed

Validity

In terms of deceptive marketing practices, jurisdiction of Competition Commission under Competition Act, 2010 and Intellectual Property Organization or the Tribunal under Intellectual Property Organization of Pakistan Act, 2012, were distinct and separate in terms of ambit and scope of such laws and did not amount to any inconsistency or conflict of jurisdiction

Show cause notice issued by Competition Commission was not without jurisdiction

Constitutional jurisdiction of High Court as a normal rule could not be invoked on mere suspicion or apprehension when no substantive right was infringed and aggrieved party had right to advance its defence in response to a notice

Challenge to a show cause notice in constitutional jurisdiction at premature stage and tendency to bypass remedy provided under concerned statute amounted to fetter rights conferred on statutory functionaries specially constituted for the purpose to initially decide the matter

Objections of petitioner company would have been decided by Competition Commission during proceedings under show cause notice but such an occasion did not arise due to filing of petition before High Court

Petitioner company did not approach High Court with clean hands and resorted to uncalled for litigation, obstructing the Commission as a regulator empowered under the law to undertake and perform its routine functions and duties

High Court declined to interfere in the matter

Constitutional petition was dismissed in circumstances.

Show cause notice is an official document issued by an authority to inform a recipient of a potential violation or non-compliance with a law, providing an opportunity to respond

Show cause notice upholds principle of natural justice, ensuring fair hearing before any decision affecting the rights or interests is made

Recipient is given adequate time to respond, access to relevant evidence, and an opportunity to be heard

Such process ensures unbiased decision-making, based on facts and relevant laws, protecting recipient's rights and interests

Principles of impartiality and reasons are also upheld, requiring decision-maker to be unbiased and provide reasons for their decision

Show cause notice is a crucial tool for law enforcement, ensuring fair and transparent process before any adverse order is passed

High Court declared that resolution of issue between parties through ADR was need of day to afford parties with an opportunity for resolution of the matter through such medium under umbrella of requisite confidentiality, trust and compliance of law

High Court asked representatives of petitioners to appear before respondent/authority to proceed ahead with mechanism of ADR in accordance with law and guidelines of Supreme Court

High Court in the meanwhile, under Doctrine of Stopgap Arrangement, restrained respondent/authority from adopting any coercive measures against petitioners, till finalization of mediation process

Constitutional petition was disposed of accordingly.

Show cause notice served to taxpayer must encompass all essential facts and clearly outline alleged actions or inaction by taxpayer that breached law, facilitating a substantial response from taxpayer

It's crucial that taxpayer is faced with precise allegations, along with basis for such allegations, to adequately respond and to record relevant material that would be necessary for any defense presented and for any adjudication by assessing officer related to it

Once a show cause notice is served, original adjudication on the notice can only be founded on the grounds and allegations raised therein

Without confronting taxpayer with allegations through a show cause notice, assessing officer cannot make determination regarding allegations as it exceeds department's competence to argue a case which department never proposed and taxpayer had never been given chance to address

Unless allegations, and grounds on which allegations are based, are specifically stated in show cause notice served to taxpayer, the entire process becomes futile and legally untenable.

In routine, Constitutional petition against issuance of show cause notice is not maintainable, however, where show cause notice has been issued in violation of law on the subject, the same can be challenged in constitutional petition.

Section 122 only imposes a single restriction that no assessment shall be amended, or further amended, under this section unless the taxpayer has been provided with opportunity of being heard in terms of its subsection (9).

Order which is penal in nature cannot be passed on a ground which is not mentioned in the show cause notice.

Order which is penal in nature cannot be passed on a ground which is not mentioned in the show cause notice.

Significance and purpose of a show cause notice stated.

Scope and purpose of a show cause notice stated.

Show cause notice is served by an authority under the relevant provisions of law in order to provide a reasonable opportunity to defend the allegations and to explain as to why any penal action should not be taken against him

In essence, it is a well-structured process to provide a fair chance to the accused to respond to the allegations and explain their position within the stipulated timeframe or, in other words, it provides a levelheaded course of action to ensure impartiality, justness and rectitude to the person in receipt of notice with an opportunity to explain why he is not guilty of any violation of law

Show cause must contain all the allegations categorically and unambiguously, including the legal provisions related to the transgression of law or default.

Pakistan Electronic Media Regulatory Authority had jurisdiction in the matter and there were parallel proceedings initiated as contempt proceedings before Judge in Chambers of High Court

High Court declined to interfere in Show cause notices in question as the same were issued within the frame work of Pakistan Electronic Media Regulatory Authority Ordinance, 2002 and rules and regulations

Suit was dismissed, in circumstances.

Commissioner, under subsection (5) of S.11 of the Sales Tax Act, 1990, and subsection (2) of S. 14 of the Federal Excise Act, 2005, is obligated to record reasons in writing for the grant of an extension of time

Commissioner cannot extend the time according to his own choice and whims as a matter of routine without any limit or constraint; he can only do so after applying his mind and recording reasons for such extension in writing

Under the said provisions, routine extensions granted by the Commissioner without recording reasons are null and void

Language of the relevant provisos is clear and explicit and no exception can be taken to the fact that the Commissioner is required to adhere to the condition precedent of recording reasons in writing before passing the assessment order.

Purpose of show cause notice is to put a person on notice about allegations for which authorities intend to proceed against him and give him an opportunity to explain his position

Show-cause notice is required to state all the particulars so that addressee is fully informed as to which provision has been invoked and which allegation has been alleged

Such is a fundamental document which is to comprehensively describe the case made out against the taxpayer by making reference to the evidence collected in support of the same.

Principle contained in maxim "audi alteram partem" has to be applied in all judicial and non-judicial proceedings notwithstanding the fact that right of hearing has not been expressly provided by the statue governing the proceedings

Issuance of show cause notice to an employee before termination of his services is indispensable.

Show cause notice was delivered to a person by an authority in order to get the reply back with a reasonable cause as to why a particular action should not be taken against him with regard to the defaulting act

By and large, it was a well-defined and well structured process to provide the alleged defaulter with a fair chance to respond the allegation and explain his position within reasonable timeframe.

Show cause notice was delivered to a person by an authority in order to get the reply back with a reasonable cause as to why a particular action should not be taken against him with regard to the defaulting act

By and large, it was a well-defined and well-structured process to provide the alleged defaulter with a fair chance to respond the allegation and explain his position within reasonable timeframe.

Section 3 of Sales Tax Act, 1990 is a charging section but under the said section the appropriate authority is officer of Inland Revenue, whereas S.6 defines the mode and manner of collection of sales tax at import stage by the Customs Authority, resultantly, it is not a charging section instead a machinery section

Section 7 of the Sales Tax Act, 1990, speaks about determination of tax liability at the time of filing of sales tax return under S. 26 of the Sales Tax Act, 1990, this is a machinery section as well and S.33 contains penal clauses synonymous to S. 156(1) of the Customs Act, 1969

Section 34, Sales Tax Act, 1990, speaks about default surcharge to be paid upon contravention and establishing of the charge under charging section

Section 148 of Income Tax Ordinance, 2001, prescribes the procedure for collection of income tax at import stage by the authorities referred therein, meaning thereby that the said sections are independent under which no charge can be invoked.

Issuance of show-cause notice while invoking irrelevant/erroneous sections renders it void and of no legal effect.

Fresh order cannot be passed in the presence of appealable order, even in the shape of re-assessment order or through issuance of show cause notice under S.180, Customs Act, 1969, while exercising powers under the provisions of S.179, Customs Act, 1969.

Show cause notice issued to the taxpayer did not merely demand information regarding deductions; it also contained the monthly breakup of the deductions allegedly required under various sections, and also the amounts actually deducted and the alleged difference

In other words, there was an application of mind to the question whether there had been a failure to deduct and if so, on what basis and in what amount

Show cause notice under S. 161 of the Income Tax Ordinance, 2001 was validly issued

Appeals were partly allowed.

General and vague show cause notices issued by tax authorities under S. 161 of Income Tax Ordinance, 2001 by incorrectly relying on the observations of the High Court in the judgment reported as Bilz (Pvt) Ltd. v Deputy Commissioner of Income Tax and another 2002 PTD 1, PLD 2002 SC 353 ("Bilz case")

Supreme Court deprecated such misreading of the Bilz case by tax authorities and termed general and vague show cause notices issued under S. 161 as a fishing expedition and roving inquiry.

Section 161 of the 2001 Ordinance became applicable not simply because a payment was made (or a transaction or event happens) but rather on a failure to either collect tax or deduct it

Failure was the triggering event, therefore, it was a gross misreading of S. 161 to conclude that for the said section to apply all that the Commissioner had to do was point to a payment, and that was sufficient to cast the burden wholly and solely on the taxpayer to show that there was no failure

At the very least, initially, there must be some reason or information available with the Commissioner for him to conclude that there was, or could have been, a failure to deduct

Such reason or information must satisfy the test of objectiveness, i.e., must be such as would satisfy a reasonable person looking at the relevant facts and information in an objective manner

Threshold was not so stringent as to require "definite information" but it was also not so low as to be bound merely to the subjective satisfaction of the Commissioner; it was only if this threshold was successfully crossed that the notice could be issued, and it was only then that the burden may shift on the person allegedly in default to show that S. 161 did not, or ought not to, apply.

Show cause notice issued to the taxpayer did not merely demand information regarding deductions; it also contained the monthly breakup of the deductions allegedly required under various sections, and also the amounts actually deducted and the alleged difference

In other words, there was an application of mind to the question whether there had been a failure to deduct and if so, on what basis and in what amount

Show cause notice under S. 161 of the Income Tax Ordinance, 2001 was validly issued

Appeals were partly allowed.

General and vague Show-Cause Notices issued by tax authorities under S. 161 of Income Tax Ordinance, 2001 by incorrectly relying on the observations of the High Court in the judgment reported as Bilz (Pvt) Ltd. v Deputy Commissioner of Income Tax and another 2002 PTD 1, PLD 2002 SC 353 ("Bilz case")

Supreme Court deprecated such misreading of the Bilz case by tax authorities and termed general and vague Show-Cause Notices issued under S. 161 as a fishing expedition and roving inquiry.

Section 161 of the 2001 Ordinance became applicable not simply because a payment was made (or a transaction or event happens) but rather on a failure to either collect tax or deduct it

Failure was the triggering event, therefore, it was a gross misreading of S. 161 to conclude that for the said section to apply all that the Commissioner had to do was point to a payment, and that was sufficient to cast the burden wholly and solely on the taxpayer to show that there was no failure

At the very least, initially, there must be some reason or information available with the Commissioner for him to conclude that there was, or could have been, a failure to deduct

Such reason or information must satisfy the test of objectiveness, i.e., must be such as would satisfy a reasonable person looking at the relevant facts and information in an objective manner

Threshold was not so stringent as to require "definite information" but it was also not so low as to be bound merely to the subjective satisfaction of the Commissioner; it was only if this threshold was successfully crossed that the notice could be issued, and it was only then that the burden may shift on the person allegedly in default to show that S. 161 did not, or ought not to, apply Commissioner Inland Revenue v. Islam Steel Mills 2015 PTD 2335 overruled.

Plaintiff assailed show cause notice issued by authorities on the plea that amount collected under heading of services and utility charges was not liable to entertainment duty

Validity

Term 'payment of admission' as provided under S.2(f)(iii) of West Pakistan Entertainments Duty Act, 1958, included any payment for any purpose, whatsoever, connected with an entertainment which a person was required to make as a condition of attending or continuing to attend the entertainment, which could be in addition to the entry ticket

Plaintiff could not charge additional amount as 'utility charges' to constitute a 'payment for admission' when such amount was charged from all those visiting the park alike

Argument that 'utility charges' for public facilities within the amusement park were separate and not subjected to levy was negated by S.3(2) of West Pakistan Entertainments Duty Act, 1958, as payment for admission to entertainment was made by means of a lump sum paid for any 'privilege, right, facility or thing combined with the right of admission

Entertainment duty was to be paid on amount of lump sum unless the government opined otherwise

Suit was dismissed, in circumstances.Government of West Pakistan v. Messrs Jabees Ltd. PLD 1991 SC 870 rel.

No charge under S.79(1) of the Customs Act, 1969, can be invoked in the show cause notice even in general not particularly, when the goods were selected for examination on the strength of which the competent authority had passed the assessment order for levy of duty and taxes.

However, the High Court in exercise of its constitutional jurisdiction could take up writs to challenge a show cause notice if it was found that the show cause notice was totally non est i.e. suffered from want of jurisdiction of the issuing authority or had been issued malafidely i.e. merely to harass the subject

Issuance of a show cause notice was in itself a complete act and decision which could be subject to judicial review if inter alia, the show cause notice was not lawfully issued by the competent authority, or, if the issuance of the show cause notice was ultra vires the relevant law and/or if issuance of the show cause notice was without jurisdiction or with mala fide.

However, the High Court in exercise of its constitutional jurisdiction could take up writs to challenge a show cause notice if it was found that the show cause notice was totally non est i.e. suffered from want of jurisdiction of the issuing authority or had been issued malafidely i.e. merely to harass the subject

Issuance of a show cause notice was in itself a complete act and decision which could be subject to judicial review if inter alia, the show cause notice was not lawfully issued by the competent authority, or, if the issuance of the show cause notice was ultra vires the relevant law and/or if issuance of the show cause notice was without jurisdiction or with mala fide.

Pharma Bureau of Overseas Investors was issued show cause notice for price increase of various medicines by sharing commercially sensitive data for anti-competitive practices

Plea raised by Pharma Bureau was that authorities were already aware of marketing and pricing strategies and that no such action was reflected in enquiry report

Validity

Prices were increased not to avoid price competition but to cope with existing economic challenges such as inflation and Rupee depreciation

Increase in such circumstances was justified as there was imbalance between production/manufacturing cost and selling cost, yielding minimal or no profits to Multinational Pharmaceutical Companies and price increase was not made to maximize joint profits

No exchange of strategic data or commercially sensitive information was available that could lead to coherence among price pattern of Multinational Pharmaceutical Companies operating under forum of Pharma Bureau

Parallel prices increase was not proportionate to a price fixing conspiracy while absence of 'plus factors' i.e., any other additional evidence establishing exchange of information between Pharma Bureau members regarding pricing was not available

Pharma Bureau, as a forum represented interest of various Multinational Pharmaceutical Companies, was engaged in talks with a regulator while they were in process to prepare a pricing policy that was a matter of concern for all parties involved

Exchange of information did not amount to a violation and such a conduct did not amount to conscious parallelism

Price increase was a result of conscious economic factors prevailing and not as a planned strategy involving exchange of trade secrets

Internationally, parallel behaviour itself was not identified as concerted behaviour, though it possessed fine evidentiary value in determining collusion and cartelization, however, same should be complemented by additional evidence which were termed by courts as 'plus factors'

Competition Commission declared that Pharma Bureau was not in violation of S. 4 of Competition Act, 2010 due to lack of substantial evidence indicating parallelism or collusion

Competition Commission set aside show cause notice issued to Pharma Bureau as same could not be held to have violated S. 4 of Competition Act, 2010 by taking any decision which had object of preventing, restricting or reducing competition within relevant market

Proceedings were dismissed accordingly.

Respondents were poultry product producers and were issued show cause notices by Competition Commission on grounds that their products were misleading in terms of being labeled 'hormones free' and was falsely compared with other market products

Validity

Claim used by respondents, i.e., 'hormones free' was not deceptive in terms of S. 10(2)(b) of Competition Act, 2010

Such claim was also not in violation of S. 10(2)(c) of Competition Act, 2010 as no comparison was made by respondent in process of marketing or advertising

Commission set aside show cause notices issued to respondents as no violation was made out in the matter vis-à-vis S. 10(2)(b) & (c) of Competition Act, 2010 and no determination under S. 10(2)(a) of Competition Act, 2010 could be made

Complaint was dismissed accordingly.

Directorate General of Intelligence and Investigation detained the goods of importer at the exit gate after their release by Clearance Collectorate and charged the importer for mis-declaration

Validity

Section 195, Customs Act, 1969 empowered the Collector of Customs or Federal Board of Revenue (Board) to call for record of any order/decision passed by subordinate officer for determination of their legality or propriety, in case any illegality or impropriety was apparent, said authorities were empowered to re-open the same and pass a fresh order may deem fit after issuance of show-cause notice

Order passed by Collector or Board was appealable before Appellate Tribunal

Officials of Directorate General of Intelligence and Investigation were not empowered to initiate action of detention and seizure of imported goods for evasion or short payment of duty and taxes, as that would tantamount to reopening of assessment order under S.195, Customs Act, 1969

Detention of goods by Directorate General of Intelligence and Investigation and subsequent proceedings were held to be of no legal effect, as such void ab initio

Appeal was allowed.

Objection to jurisdiction was a basic lacuna on assumption of jurisdiction, which could be raised at any stage of proceedings including appeal inasmuch as it went to the very roots of the matter and had rendered entire proceedings coram non judice

When a Court/ forum suffered from want of inherent jurisdiction, no act of consent or acquiescence in the proceedings could vest such forum/Court with such jurisdiction

No question of waiver or estoppel was attracted in such circumstances

Non-raising of such objection by parties, the forum taking cognizance of the matter must have at the first instance to decide question of its jurisdiction at the commencement of proceedings

Order passed or an act done by Court or Tribunal, incompetent to entertain proceedings, was without jurisdiction

Jurisdictional defect could not be removed by mere conclusion of proceedings and passing of order-in-original and order-in-appeal

When a law required an act to be done in a particular manner, it had to be done in that manner alone, not otherwise

High Court declined to interfere in the order passed by Appellate Tribunal Inland Revenue

Reference was dismissed in circumstances.

Merely on the basis of some vague allegations and without confronting taxpayer with the set of allegations and material, no adverse order could be passed under Sales Tax Act, 1990, as the same would be violative of principles of natural justice and fair trial

High Court declined to interfere in the proceedings as merely a notice in terms of S. 37 of Sales Tax Act, 1990, had been issued in term

On mere issuance of show cause notice, unless the same lacked jurisdiction or there was some patent illegality or perversity manifest from the record, Constitutional jurisdiction under Art. 199 of the Constitution could not be invoked, as the same would amount to ignore or bypass relevant forums and remedies provided under special law particularly fiscal laws i.e. Sales Tax Act, 1990, Income Tax Ordinance, 2001, Customs Act, 1969, or Sindh Sales Tax on Services Act, 2011

Petition was dismissed in circumstances.

On mere issuance of show cause notice by competent authority, which otherwise did not suffer from any jurisdictional error or some patent illegality on the face of record, same could not be assailed by invoking extraordinary Constitutional jurisdiction of High Court under Art. 199 of the Constitution

Constitutional petition was dismissed in circumstances.

Authorities issued show cause notice to the appellant alleging that advertisement services involving sales tax was received but were not withheld and deposited sales tax amount in government treasury

Validity

No material evidence in support of charges leveled in the notice was provided and right of appellant to contest the case on merits was usurped as evidence in support of charges had not been provided which was the basic right of the defendant

Adjudicating officer was responsible to disclose material evidence in support of charges leveled in show cause notice enabling the defendant to examine its record and rebut the charges

After promulgation of Provincial Sales Tax Act, 2013, only Provincial government of Khyber Pakhtunkhwa was competent to pass order about levy of tax on services with effect from 01-07-2013 and onwards

Proceedings against appellant were initiated on 26-09-2013, i.e., well after July, 2013 hence, such proceedings were not pending proceedings as on July, 2013, on the date of enactment of Khyber Pakhtunkhwa Finance Act, 2013

Appellate Tribunal Inland Revenue vacated the order as adjudicating officer acted beyond jurisdictional norms

Appeal was allowed in circumstances.

Assessee assailed show cause notice on the ground that it could not have been issued under S.177 of Income Tax Ordinance, 2001 by Commissioner, without balloting carried out by Federal Board of Revenue under S.214-C of Income Tax Ordinance, 2001

Validity

Legislature, after Finance Act, 2013, had expressed its clear intent regarding powers of carrying out audit by Commissioner under S.177 of Income Tax Ordinance, 2001

Power of Commissioner for such purpose was independent of authority of Federal Board of Revenue of S.214-C of Income Tax Ordinance, 2001

High Court declined to interfere in the show cause notice issued by the authorities

Petition was dismissed in circumstances.

Petitioner was aggrieved of show cause notice issued by adjudicating authority and consequential orders-in-original passed as consequence of interpretation by Federal Board of Revenue

Validity

Primary jurisdiction to interpret any provision was vested with quasi-judicial authorities under Federal Excise Act, 2005, which should not be by passed merely because taxpayer was offering another interpretation

No jurisdictional defect was found in issuance of show cause notice, therefore, no interference was warranted to such extent

Authorities followed interpretation made by Federal Board of Revenue through order-in-original and the same was against provisions of S. 42 of Federal Excise Act, 2005

High Court directed the petitioners to plead their cases as well as interpretation before Adjudicating Authority by reply to show cause notices already issued and set aside order-in-original

Adjudicating Authority was directed to proceed in the matter with independent mind after addressing all points raised or to be raised by petitioners before it

Constitutional petition was allowed accordingly.

Assessee was aggrieved of show cause notice issued by Income Tax authorities whereby original assessment order was amended after five years

Validity

Relevant period under S. 122(2) and (4) of Income Tax Ordinance, 2001, for amending assessment order by Commissioner was end of financial year in which it was issued or deemed to have been issued the assessment order to taxpayer

Section 122(2) and (4) of the Ordinance did not speak of the period starting from the end of financial year about which assessment order was passed but it was about financial year in which either Commissioner had issued or deemed to have issued the order that was relevant and would be so applicable in the case of assessee also for counting the limitation

Assessee filed return for tax year 2009 on 25-01-2010 which for all intents and purposes was deemed to be an assessment order issued by Commissioner when that year ended on 30-06-2010, therefore, it was relevant date as a point of time wherefrom period of five years as provided in S. 122 of Income Tax Ordinance, 2001, was to start counting

If it was so counted the show cause notice in question was within the time limit as prescribed therein

Petition was dismissed in circumstances.

Sections 36(1) & 36(2) of Sales Tax Act, 1990 established that show-cause notice issued beyond very time of limitation was in flagrant disregard of law in inasmuch as recovery of sales tax not levied beyond three years was not only barred by time limitation but was also ex-facie violation of S. 36(2) of Sales Tax Act, 1990.

Show cause notices were issued to appellants for making supplies Diplomatic Mission which withheld 1/5th of the sales tax whereas, appellants were charged for failing to pay 4/5th of the sales tax

Validity

United Nations including its subsidiary organs were exempted under S. 7 of Convention on the Privileges and Immunities of the United Nations from all direct taxes and customs duties in respect of articles imported or exported for its official use

Such tax exemption privileges were obtained for United Nations vendors, the vendor authorized the mission to deduct from vendor's invoices any amount representing such taxes or duties charged by the vendor the Mission

Payment of such corrected invoiced amounts would constitute full payment by the Mission

Amount demanded was allowed to be recovered from appellants invariably, they had to knock at the door of the Mission which would in turn, approach to Economic Affairs Division of Federal Government for exemption

Mission by virtue of R.57(5) of Sales Tax Rules, 2006 could approach Economic Affairs Division

For post-facto regularized supplies in terms of Sales Tax Rules, 2006, ipso facto qualified the appellant supplies were exempted or zero rated

If once the supplies were found exempted from tax leviable under the Statute, then any procedural lapse for availing exempt were condonable by virtue of principle of substantive compliance

Supplies made to the Mission being privileged organization, were zero rated within the meaning of relevant provision of law

Appellate Tribunal Inland Revenue annulled the order of assessment as the same was illegal and without lawful jurisdiction

Appeal was allowed in circumstances.

Assessee was aggrieved of show cause notice issued under S. 122 (2) of Income Tax Ordinance, 2001, as amended through Finance Act, 2009

Validity

At the time when show cause notice was issued, assessment order dated 30-12-2006, treated to have been passed by Commissioner under S. 120 of Income Tax Ordinance, 2001, had attained finality i.e. the order had become a past and closed transaction

Such order could not have been re-opened by applying limitation period provided under amended S.122(2) of Income Tax Ordinance, 2001, by giving it retrospective effect

Vested right was created in favour of assessee company when limitation had expired under substituted provision and the same could not have been taken away by giving amended provision retrospective effect

High Court declined to interfere in the order passed by Income Tax Appellate Tribunal

Reference was dismissed in circumstances.