| Case ID |
e1b07340-5701-40fa-a4ba-a11471cc57fc |
| Body |
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| Case Number |
Writ Petition No. 272 of 2021 |
| Decision Date |
Nov 08, 2021 |
| Hearing Date |
Jul 01, 2021 |
| Decision |
The Islamabad High Court ruled in favor of the petitioners, M/S Pakistan Tobacco Company Limited, determining that the notices issued for audit under section 177(1) of the Income Tax Ordinance, 2001, and related provisions were unlawful. The court emphasized the necessity for the Commissioner to provide valid reasons for selecting a taxpayer for audit, ensuring that the process is transparent and not arbitrary. The decision clarified that the Commissioner’s power to select for audit is independent of the Federal Board of Revenue's authority under section 214C. The court set aside the impugned notices, reinforcing the principle that every citizen has a right to be treated in accordance with law, thus allowing the petitions filed by the tobacco company to proceed favorably. |
| Summary |
This case involves a series of writ petitions filed by M/S Pakistan Tobacco Company Limited against the Federation of Pakistan regarding the legality of audit notices issued under various tax laws. The Islamabad High Court examined the statutory prerequisites for conducting audits under the Income Tax Ordinance, 2001, the Federal Excise Act, 2005, and the Sales Tax Act, 1990. The court found that the Commissioner must record valid reasons for selecting taxpayers for audits and cannot base decisions on mere suspicion. The ruling emphasizes the importance of transparency and fairness in tax audits, asserting that the powers of the Commissioner and the Federal Board of Revenue are distinct and independent. This case highlights the legal protections afforded to taxpayers, ensuring that audits are conducted in compliance with statutory requirements, thereby upholding the rule of law in tax administration. |
| Court |
Islamabad High Court
|
| Entities Involved |
Not available
|
| Judges |
BABAR SATTAR, JUSTICE
|
| Lawyers |
Mr. Hyder Ali Khan,
Shaheer Roshan Shaikh,
Sirdar Jamal Sukhera,
Sirdar Ahmed Jamal Sukhera,
Mr. Hassan Kamran Bashir,
Arif Humayun,
Hafiz Muhammad Idrees,
Syed Farid Bukhari,
Mr. Aamir Ahmed Khawaja,
Ch. Naeem ul Haq,
Ch. Imran ul Haq,
Sahibzada Uzair Hashim,
Mr. Muhammad Musawar Gill,
Mr. Farrukh Shahzad Dall,
Barrister Atif Rahim Burki,
Babar Bilal,
Sheikh Anwar ul Haq
|
| Petitioners |
M/S PAKISTAN TOBACCO COMPANY LIMITED
|
| Respondents |
FEDERATION OF PAKISTAN THROUGH THE SECRETARY, M/O FINANCE, ETC.
|
| Citations |
2022 SLD 20,
(2022) 125 TAX 5,
2022 PTCL 202,
2022 PTD 1574
|
| Other Citations |
Pakistan Telecommunication Company Ltd. v. Federation of Pakistan (2016 PTD 1484),
Commissioner of Inland Revenue, Sialkot v. Allah Din Steel and Rolling Mills (2018 SCMR 1328),
Messrs Chenone Stores Ltd. v. Federal Board of Revenue (2012 PTD 1815),
Messrs Pfizer Pakistan Ltd. v. Deputy Commissioner and Others (2016 PTD 1429),
Kohinoor Sugar Mills v. Federation of Pakistan (2018 PTD 821),
The Federal Board of Revenue v. Chenone Stores Ltd. (2018 PTD 208),
Shahnawaz (Pvt.) Ltd. v. Pakistan through the Secretary Ministry of Finance Government of Pakistan. Islamabad (2011 PTD 1558),
Chief Settlements Commissioners, Lahore v. Raja Muhammad Fazil Khan and others (PLD 1975 SC 331),
The Chairman, District Screening Committee, Lahore and another v. Sharif Ahmed Hashmi (PED 1976 SC 258),
Sarosh Haider v. Muhammad Javed Chundirgar (PLD 2014 SC 338)
|
| Laws Involved |
Income Tax Ordinance, 2001,
Federal Excise Act, 2005,
Federal Board of Revenue Act, 2007,
Sales Tax Act, 1990
|
| Sections |
122,
120,
122(1),
122(5),
122(9),
25,
177(1),
177(4),
214C,
46,
25(2),
127,
120(1A),
122(2),
121,
174,
25(1),
177(9),
7
|