Messrs DAWOOD TEXTILE PRINTING INDUSTRIES (PVT). LTD., FAISALABAD
This constitutional petition concerns the recovery of tax dues during the pendency of an appeal before the Customs, Sales Tax and Central Excise Appellate Tribunal. The petitioner challenged the coercive recovery of tax demands after the interim relief granted by the Tribunal lapsed under Section 46(4) of the Sales Tax Act, 1990. The core legal question was whether the tax authorities could pursue coercive recovery while the petitioner's appeal remained undecided, effectively denying the petitioner access to an independent adjudicatory forum. The Lahore High Court, relying on the principle that access to justice is a fundamental right requiring determination of grievances by an independent tribunal, held that the petitioner was entitled to adjudication of their tax liability. Consequently, the Court directed the petitioner to approach the Appellate Tribunal for a final decision. The Tribunal was ordered to decide the appeal within three months, and the tax authorities were restrained from initiating coercive recovery proceedings against the petitioner during this period. The judgment reaffirms the necessity of independent adjudication in tax disputes to ensure the fundamental right of access to justice.
- Can tax authorities initiate coercive recovery of disputed tax dues while an appeal is pending before the Appellate Tribunal?
- Does the lapse of interim relief under Section 46(4) of the Sales Tax Act, 1990 automatically entitle the tax department to pursue coercive recovery?
- Is an assessee entitled to adjudication of disputed tax liability by an independent forum outside the tax department's hierarchy?
- Section 46(1), Sales Tax Act 1990
- Section 46(4), Sales Tax Act 1990
ORDER
UMAR ATA BANDIAL, J.---Submits that the petitioner filed an appeal under section 46(1) of the Sales Tax Act, 1990 before the learned Customs, Sales Tax and Central Excise Appellate Tribunal (Tribunal'). On 1-2-2007 the petitioner was granted interim relief upon deposit of Rs.12.5 million, forming a part of the impugned demand. The said interim order lapsed after the expiry of six months in terms of section 46(4) of the Sales Tax Act, 1990 rendering the petitioner liable A coercive recovery. It is prayed that pending decision of the petitioner's appeal no merits, the premature recovery of the impugned dues is harsh and contrary to the rule laid down in Sunrise Bottling Company (Pvt.) Ltd. v. Federation of Pakistan (2006 PTD 535). The relevant portion of that judgment reads: "Learned counsel for the petitioner has referred to the judgment of this Court in the case of Z.N.
Exports (Pvt.) Ltd. v. Collector Sales Tax 2003 PTD 1746. In that case it has been held by this Court that an assessee is entitled to adjudication in respect of his disputed tax liability by at least one independent forum outside the hierarchy of the respondent-Department. Admittedly in this case the impugned liability has been determined by the officers of the respondent-Department and remedy of the petitioner before the learned Appellate Tribunal provides the independent adjudication of his challenge to the impugned tax liability."
2. The Honourable Supreme Court has laid down that access to justice is a fundamental right. In the case of Mehran Ali and others v. Federation of Pakistan and others (PLD 1998 SC 1445), it has been held that an essential feature of such right is the determination of any grievance or dispute by an independent Tribunal.
3. In view of the foregoing observations made in the precedent case and the relief granted therein it is directed that the petitioner shall appear before the learned Appellate Tribunal through an appropriate application seeking final adjudication of his pending appeal. The learned Appellate Tribunal shall endeavour to decide the petitioner's appeal within a period of three months from the date of receipt of certified copy of this order. During such period the respondent No.3 shall not press for recovery of the impugned dues through coercive process. Disposed of in the above terms.
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