Messrs LALA MUSA FLOUR AND GENERAL MILLS, GUJRAT through Managing
This constitutional writ petition before the Lahore High Court concerned the non-compliance and implementation of a binding judicial precedent by the tax authorities. The core legal question was whether the Commissioner Inland Revenue retained the jurisdiction to issue notices selecting taxpayers for an audit of their tax affairs, despite a previous judgment holding such power to rest exclusively with the Federal Board of Revenue through computer balloting. The High Court observed that despite clear findings in the judgment rendered in Writ Petition No. 393 of 2012 (Messrs Chenone Stores Ltd.), the respondent tax officials continued to issue illegal audit selection notices. Disposing of the writ petition, the High Court held that judicial precedents rendered by the High Court are binding upon administrative respondents and must be strictly complied with unless reversed or stayed by an interim order of the Supreme Court of Pakistan. Consequently, the respondents were directed to follow and implement the binding judgment in letter and spirit.
- Whether the Commissioner Inland Revenue has the jurisdiction to select taxpayers for audit under Section 177 of the Income Tax Ordinance 2001?
- Is a public authority bound to implement and follow a judgment of the High Court in the absence of a stay or reversal by the Supreme Court of Pakistan?
- Does the power to select a taxpayer for audit through computer balloting rest exclusively with the Federal Board of Revenue?
- Section 177, Income Tax Ordinance 2001
- Section 25, Sales Tax Act 1990
- Section 46, Federal Excise Act 2005
ORDER
' MRS. AYESHA A. MALIK, J.---The issue in this case is the compliance and implementation of the judgment dated 10-5-2012 rendered by this Court in Writ Petition No,393 of 2012 titled as "Messrs Chenone Stores Ltd. v. The Federal Board of Revenue etc." whereby it has been held that the notices issued by Commissioner Inland Revenue under sections 177, 25 and 46 of the Income Tax Ordinance, 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005 selecting the petitioners in the said Writ Petition for audit of their tax affairs are illegal and without any lawful authority. It has further been held vide said judgment that such authority only lies with the Federal Board of Revenue through computer balloting and not with the Commissioner Inland Revenue.
2. Despite the clear and unambiguous findings of this Court in the aforementioned judgment, notices by Commissioner Inland Revenue selecting the taxpayers for audit of their tax affairs are continuously being issued which is 'contrary to the findings thereof.
3. The respondents are essentially required to comply and follow the above referred judgment untill and unless it is reversed or some interim relief is granted by the Hon'ble Supreme Court of Pakistan in favour of the respondents which undeniably does not exist till date.
4. In this view of the matter, the Writ Petition in hand is disposed of with the direction to the respondents to comply with the findings of the judgment dated 10-5-2012 passed by this Court in Writ Petition No,393 of 2012 titled as "Messrs Chenone Stores Ltd. v. The Federal Board of Revenue etc."
Cited by 4 cases
- Shabnam Ashraf vs Deputy Commissioner & others 2020 IHC 106
- GOHAR RICE MILLS, VILLAGE BADWAL, SHAKARGARRH vs COMMISSIONER 2015 PTD (Trib.) 1625
- Messrs DUA INTERNATIONAL TRADING SYSTEMS vs COMMISSIONER INLAND 2016 PTD (Trib.) 2936
- Shabnam Ashraf, Proprietor of preparatory School, Islamabad vs The Deputy Commissioner Inland Revenue, Audit Unit-III, Zone-I, Regional Tax Office (RTO), Islamabad and 3 others 2021 PLJ Islamabad 65, 2020 PTD 1917, PTCL 2021 CL.563, 2020 PTD 1670