RAJA MUHAMMAD ISHAQUE Versus ADDITIONAL COMMISSIONER PUNJAB REVENUE AUTHORITY Hafiz Muhammad Idris
ORDER
This reference application in terms of Section 67A of the Punjab Sales Tax on Services Act, 2012 (hereinafter referred to as "Act" ) stems from order dated 15.12.2025 whereby the Appellate Tribunal of Punjab Revenue Authority, Lahore (Bench-II) (hereinafter referred to as "Tribunal" ), proceeded to dismiss the appeal of the applicant on the point of limitation.
2. The facts, in brief, are that the applicant established a housing society under the name and style of "Clifton Town" situated at Adyala Road, Rawalpindi, after obtaining requisite approvals from the Rawalpindi Development Authority and other concerned authorities. According to the applicant, all development activities in respect of the said project stood completed in the year 2008. Subsequently, a show cause notice dated 28.08.2023 was issued by Respondent No.1 alleging recovery of sales tax for the period from July, 2015 to June, 2023, which was duly replied by the applicant. The Additional Commissioner, however, proceeded to finalize the proceedings through assessment order dated 23.04.2024. Feeling aggrieved, the applicant preferred an appeal under Section 63 of the Act before the Commissioner (Appeals), Punjab Revenue Authority, Lahore (hereinafter referred to as "Commissioner" ), which was dismissed on the ground of limitation vide order dated 17.03.2025. The said order was further assailed through an appeal under Section 66 of the Act before the "Tribunal" , which too was dismissed vide order dated 15.12.2025
3. Learned counsel for the applicant contended that the "Tribunal" , while dismissing the appeal, failed to advert to and adjudicate upon the grounds raised before it, thereby rendering the impugned order a non-speaking order, under the law. It is further contended that since all development activities were completed in the year 2008, i.e., prior to the levy and taxability of the relevant services, the imposition of sales tax for a subsequent period amounts to retrospective application of law, which is without lawful authority. It is also urged that no development activity was undertaken during the period from July, 2015 to June, 2023, yet the applicant has been erroneously assessed as a defaulter without proper appraisal of the record.
4. Learned counsel for the Respondents, on the other hand, supported the impugned order.
5. We have heard learned counsel for the parties and perused the record.
6. The case of the applicant hinges upon the assertion that all development activities were completed in the year 2008, i.e., much prior to the promulgation of the Act , under which the impugned levy of sales tax has been sought to be imposed. It is an admitted position that the show-cause notice was issued on 28.08.2023 for the tax period from July, 2015 to June, 2023 whereby recovery of sales tax for the said period has been alleged. We are constrained to observe that throughout the proceedings right from the stage of the Additional Commissioner upto the "Tribunal" , there is no reference whatsoever to the date of compulsory registration of the applicant with the Punjab Revenue Authority. Learned counsel for the Respondents, when confronted with the absence of material aspect regarding the applicant's registration and consideration of evidence, he has fairly conceded this legal position. Pertinently, this omission assumes critical significance, as the liability to sales tax under the Act is intrinsically linked with registration and rendition of taxable services during the relevant period. It has further been observed that the applicant had placed on record material evidence, including documents demonstrating completion of development activities in the year 2008, both in response to the show-cause notice and during appellate proceedings and these documents have also been mentioned in the appeals before the lower fora. However, the Additional Commissioner brushed aside the same with a cursory observation that no documentary evidence had been furnished, which is belied by the record. The "Commissioner" and the "Tribunal" , also failed to advert to such material evidence altogether. Such non-consideration of relevant material, coupled with the failure to determine essential jurisdictional facts, renders the impugned orders legally unsustainable. The omission to examine whether any taxable service was rendered during the relevant period, as well as the failure to determine the date and effect of registration, goes to the root of the matter and vitiates the entire proceedings. These are not mere procedural irregularities but foundational defects affecting the legality of the levy of sales tax itself.
7. In view of foregoing reasons, this reference application is allowed. Resultantly, the impugned orders passed by the "Tribunal" as well as the "Commissioner" are set aside. As a sequel whereof, the matter shall be deemed pending before the Additional Commissioner, who shall proceed de-novo and decide the question of assessment afresh after affording an opportunity of hearing to the applicant.
8. Office to transmit copy of this order under seal of the Court to the "Tribunal" in terms of Section 67A(4) of the "Act" .
MQ/M-64/L Application allowed.