Pakistan Case Law
2003 PTD 1746

Z. N. EXPORTS (PVT) LTD vs COLLECTOR OF SALES TAX ,

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Citation2003 PTD 1746
CourtLahore High Court
Case No.Writ Petition No, 1555 of 2003
Date2003-02-03
Judge(s)Nasim Sikandar
ResultPetition disposed of
AI Summary — generated from this judgment; read the full text below and verify before relying on it.

This constitutional petition addresses the recovery of tax arrears initiated by the Revenue Authority following the expiration of an interim injunction granted by the Customs, Excise and Sales Tax Appellate Tribunal. The core legal question concerns whether a taxpayer can be compelled to pay a disputed tax demand when the first appeal remains pending before the Tribunal due to the lapse of the statutory six-month period for interim relief under the Sales Tax Act, 1990. The Court held that, in the interest of equity and justice, an assessee should not be forced to satisfy a demand created by a Revenue Authority until the order has undergone scrutiny by an independent appellate forum, provided the delay is not attributable to the assessee. The Court directed the Tribunal to decide the pending appeal within three months and restrained the Revenue Authority from enforcing coercive recovery measures in the interim. The judgment establishes the principle that an assessee is entitled to protection against coercive recovery until their first appeal is adjudicated by an independent forum, barring instances where the delay is caused by the appellant.

Questions settled in this judgment
  • Can a Revenue Authority enforce coercive recovery of a tax demand while an appeal is pending before an independent appellate forum?
  • Does an interim injunction against tax recovery lose its efficacy after the lapse of the statutory six-month period under the Sales Tax Act, 1990?
  • Is an assessee entitled to protection against tax recovery if the delay in disposing of their first appeal is not caused by the assessee themselves?
Laws & provisions referred
  • Section 46(4), Sales Tax Act 1990
tax recoveryinterim reliefappellate tribunalcoercive recoverystay of demandsales tax

ORDER

' The first appeal tiled by the petitioner before the Customs, Excise and Sales Tax Appellate Tribunal is stated to be pending wherein interim relief was allowed to him in the form of an injunctive order against the recovery of arrears of the demand raised in the impugned order. That injunction order has lost its efficacy due to lapse of statutory period of six months as contemplated in proviso to subsection (4) of section 46 of the Sales Tax Act, 1990. Thereafter according to the petitioner, the department has moved for the recovery of the demand,

2. Learned counsel for the petitioner contends and I will agree that before a recovery created by an impugned order by a Departmental Authority can be effected, an assessee, appellant must be heard by a forum outside the departmental hierarchy. The Tribunal as a forum of first appeal having not disposed of the appeal, the petitioner cannot be blamed on that account. In all fairness, equity and justice, an assessee 'should not be forced to pay a demand created by a Revenue Authority unless the order creating such demand has undergone the scrutiny of at least one independent forum.

3. This is however, subject to the exemption of a case where non-disposal of the first appeal by Extra Departmental Appellate Forum is caused by the assessee/petitioner himself. Where it is not so and where the Tribunal grants interim relief then it is incumbent upon it to dispose of that appeal within the statutory period of six months in order to safeguard the interest of both the assessee/appellant as well as the Revenue.

4. Accordingly, I will direct the learned Tribunal to dispose of the pending appeal of the petitioner at the earliest but not later than three months A from today. For the aforesaid reasons, it is further directed that till the disposal of the appeal by the Tribunal as aforesaid, no coercive mode of recovery shall be enforced against the petitioner.

5. .

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