Messrs AIDY VEE & CO, (PVT.) LTD. through Director, vs TAXATION OFFICER OF INCOME TAX, LAHORE and 4 others

This matter comes before the Lahore High Court via a constitutional petition filed by Messrs Aidy Vee & Co. (Pvt.) Ltd. through its Director against the Taxation Officer of Income Tax, Lahore, and others, concerning coercive recovery proceedings initiated despite the pendency of a tax appeal and an interim relief application before the appellate authority. The core legal question is whether tax recovery proceedings should be stayed when an appeal and an application for interim relief are pending adjudication before the Commissioner Income Tax Appeals and remain undecided. The Court held that respondents shall not effect the impugned recovery until the pending interim relief application or the main appeal is finally decided, directing the Commissioner Income Tax Appeals to decide the appeal preferably within two months. The key principle laid down is that recovery proceedings ought to be restrained during the pendency of an undecided interim relief application before the appellate forum to prevent rendering the statutory appeal infructuous.