| Case ID |
4653a242-0f7e-4f5e-8fe4-9f8410da5308 |
| Body |
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| Case Number |
S.T.A. No.828/LB of 2009 |
| Decision Date |
Sep 28, 2009 |
| Hearing Date |
Sep 15, 2009 |
| Decision |
The Appellate Tribunal Inland Revenue has set aside the orders of the original decision and the appeal, declaring the raid, search, and seizure conducted under sections 38, 40, and 40A of the Sales Tax Act, 1990 as illegal. The Tribunal found that the mandatory procedures were not followed, including the absence of a properly prepared statement of grounds of belief prior to the raid. Consequently, all actions taken based on the illegal raid, including the issuance of show-cause notices and the demand/recovery orders, were deemed to have no legal effect. |
| Summary |
In the landmark case S.T.A. No.828/LB of 2009, decided on September 28, 2009, by the Appellate Tribunal Inland Revenue, the Tribunal addressed significant violations pertaining to the Sales Tax Act, 1990. The appellant, represented by Mian Abdul Ghaffar and Malik Muhammad Arshad, challenged the legality of a raid conducted by the Sales Tax officials under sections 38, 40, and 40A of the Act. The Tribunal meticulously examined the procedures followed during the raid, highlighting the absence of a properly prepared statement of grounds of belief as mandated by section 40A before conducting a search without a warrant. Furthermore, the Tribunal referenced pivotal case laws such as 'Collector of Customs (Preventive) and 2 others v. Muhammad Mahfooz PLD 1991 SC 630' and 'Federation of Pakistan through Ministry of Finance, Islamabad v. Master Enterprises (Pvt.) Limited and 4 others 2003 PTD 1034' to underscore the necessity of adhering to legal protocols during tax investigations. The decision emphasized that without compliance with the mandatory provisions, any evidence or records seized could not be legitimately used against the appellant. Consequently, the Tribunal annulled the original orders, rendering all subsequent actions based on the illegal raid null and void. This case serves as a crucial precedent for ensuring that tax authorities strictly follow procedural requirements, thereby safeguarding the rights of taxpayers against arbitrary actions. The emphasis on legal compliance and the thorough analysis of procedural lapses make this decision a cornerstone in tax-related jurisprudence, reinforcing the principles of fairness and legality in administrative actions. |
| Court |
Appellate Tribunal Inland Revenue
|
| Entities Involved |
Federal Tax Ombudsman,
Messrs Dawood Textile Printing Industries (Pvt.) Limited,
Federation of Pakistan through Ministry of Finance, Islamabad,
Collectorate of Sales Tax, Faisalabad,
Deputy Commissioner Revenue (CBR)
|
| Judges |
Mian Muhammad Tahir,
Mehr Muhammad Arif Sargana,
Khalid Naseem
|
| Lawyers |
Mian Abdul Ghaffar,
Malik Muhammad Arshad,
Muhammad Nawaz Cheema
|
| Petitioners |
Mian Abdul Ghaffar,
Malik Muhammad Arshad
|
| Respondents |
Muhammad Nawaz Cheema
|
| Citations |
2010 SLD 191 = 2010 PTD 292
|
| Other Citations |
Collector of Customs (Preventive) and 2 others v. Muhammad Mahfooz PLD 1991 SC 630,
Federation of Pakistan through Ministry of Finance, Islamabad v. Master Enterprises (Pvt.) Limited and 4 others 2003 PTD 1034,
Collector of Sales Tax and Central Excise (Enforcement) and another v. Messrs Mega Tech (Pvt.) Limited 2005 PTD 1933,
Messrs Ahsan Yousaf Textile Mills (Pvt.) Limited, Faisalabad v. Federation of Pakistan through Ministry of Finance, Islamabad and 4 others 2003 PTD 2037,
Messrs Food Consultants (Pvt.) Limited, Lahore and other v. Collector (Central Excise and Sales Tax), Lahore: and 2 other 2004 PTD 1731,
Messrs Zakeria Enterprises v. Muhammad Musharafa and 7 other 2005 PTD 1200,
Collector of Sales Tax and others v. Food Consultants (Pvt.) Limited and Messrs Depilex Beauty Clinic and others 2007 PTD 2356 rel.,
Collector of Customs, Lahore and another v. Universal Gateway Trading Corporation and other 2005 SCMR 37,
Chairman CBR and others v. Haq Cotton Mills (Pvt.) Limited (2007 PTD (SC) 1351)
|
| Laws Involved |
Sales Tax Act, 1990
|
| Sections |
38,
40,
40A
|