| Case ID |
23478140-a933-4b3d-9f8a-30936cbc06ef |
| Body |
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| Case Number |
Writ Petition No.40201 of 2021 |
| Decision Date |
Jun 23, 2021 |
| Hearing Date |
Jun 23, 2021 |
| Decision |
The Lahore High Court, presided over by Justice Jawad Hassan, granted the writ petition filed by Tetra Pak (Pakistan) Limited against the Federation of Pakistan and others. The court ordered the Federal Board of Revenue (FBR) to reconsider the issuance of tax recovery notices under Section 138(1) of the Income Tax Ordinance, 2001, and Section 4(9) of the Workers' Welfare Fund Ordinance, 1971. It directed the FBR to review Circular No. 4(33)-Rev.Bud./99 dated 17-02-2000 and decide the matter after providing a proper hearing to all concerned parties within two weeks. Additionally, the court issued an interim order preventing any coercive measures against Tetra Pak for the disputed tax amounts until a final decision is made. The petition was disposed of in accordance with constitutional provisions and relevant laws, ensuring due process and fair treatment under the law. |
| Summary |
In the landmark case of Tetra Pak (Pakistan) Limited versus Federation of Pakistan and others, the Lahore High Court addressed critical issues surrounding tax recovery under the Income Tax Ordinance, 2001, and the Workers' Welfare Fund Ordinance, 1971. The petitioner, Tetra Pak, challenged the validity of notices issued by the Federal Board of Revenue (FBR) for the recovery of disputed tax amounts and contributions to the Workers' Welfare Fund. Represented by advocate Mansoor Usman Awan, Tetra Pak argued that the FBR bypassed proper legal procedures, violating Article 4 of the Constitution, which guarantees every citizen's right to be treated lawfully and prohibits actions detrimental to one's life, liberty, reputation, or property without due process.
Justice Jawad Hassan presided over the case, emphasizing the necessity of adhering to legal protocols in tax collection and enforcement. The court referenced several precedents, including the Supreme Court's decisions in Watan Party v. Federation of Pakistan and Workers' Welfare Funds v. East Pakistan Chrome Tannery, highlighting the non-tax nature of contributions to the Workers' Welfare Fund as per Section 4(7) of the 1971 Ordinance. These contributions are treated as deductible expenditures under the Income Tax Ordinance, distinguishing them from taxable income.
The court mandated the FBR to review Circular No. 4(33)-Rev.Bud./99 and ensure that all actions taken comply with both statutory requirements and constitutional guarantees. A critical aspect of the judgment was the temporary halt on any coercive measures against Tetra Pak until the FBR provided a comprehensive and fair hearing. This decision underscores the judiciary's role in safeguarding corporate entities' rights against arbitrary governmental actions and reinforces the importance of procedural fairness in tax administration.
Additionally, the judgment touched upon the broader implications for tax law enforcement in Pakistan, stressing the need for regulatory bodies like the FBR to operate within the confines of established legal frameworks. By directing the FBR to follow due process, the court reinforced the principles of transparency and accountability in fiscal governance. The case serves as a pivotal reference for future litigations involving tax disputes and the interpretation of welfare fund contributions, ensuring that legal standards are meticulously upheld to maintain trust in the country's financial and judicial systems. This ruling not only provides immediate relief to Tetra Pak but also sets a precedent for other taxpayers seeking judicial intervention in similar circumstances, thereby contributing to a more just and equitable tax environment in Pakistan. |
| Court |
Lahore High Court
|
| Entities Involved |
Federation of Pakistan,
FBR,
Tetra Pak (Pakistan) Limited
|
| Judges |
Jawad Hassan, J
|
| Lawyers |
Mansoor Usman Awan,
Mirza Nasar Ahmad,
Asad Ali Bajwa,
Adeel Ahmad Kamra,
Monim Sultan,
Ms. Sadia Malik,
Malik Abdullah Raza,
Shahzad Ahmad Cheema,
Anas Sheikh
|
| Petitioners |
Tetra Pak (Pakistan) Limited
|
| Respondents |
Federation of Pakistan and others
|
| Citations |
2024 SLD 24,
2024 PTD 183
|
| Other Citations |
Watan Party and another v. Federation of Pakistan and others PLD 2011 SC 997,
Workers' Welfare Funds, Ministry of Human Resources Development, Islamabad through Secretary and others v. East Pakistan Chrome Tannery (Pvt.) Ltd. through G.M (Finance), Lahore and others PLD 2017 SC 28,
Commissioner Inland Revenue Multan v. Messrs Allah Wasaya Textile and Finishing Mills Ltd. 2013 PTD 1548,
Ramzan Sugar Mills Limited v. Federal Board of Revenue and others 2021 PTD 1321,
Chenab Flour and General Mills and others v. Federation of Pakistan through Secretary Revenue Division and others PLD 2021 Lah. 343,
Shell Pakistan Limited v. Government of Punjab and others 2020 PTD 1607
|
| Laws Involved |
Income Tax Ordinance, 2001
|
| Sections |
138(1)
|