Messrs HOMES LIMITED, Karachis vs THE COMMISSIONER OF INCOME TAX
This matter came before the Supreme Court of Pakistan as a petition for leave to appeal, which, upon agreement of the learned counsel for the parties, was converted into an appeal. The core question involved the interim relief pending the final disposal of a constitutional petition relating to an income tax demand. The Supreme Court allowed the appeal, set aside the impugned order of the High Court, and directed that the impugned demand from the appellant-company be held in abeyance pending the final disposal of Constitution Petition No. 727-D of 1984. This relief is subject to the appellant furnishing a bank guarantee for 50 percent of the demand and executing security for the balance amount to the satisfaction of the Nazir of the High Court within one month. The Court laid down the principle that interim protection against tax demands can be granted upon furnishing adequate security and bank guarantees pending constitutional proceedings.
- Whether an interim order of the High Court can be substituted by consent of the parties in the Supreme Court?
- What conditions may be imposed for holding a tax demand in abeyance pending a constitutional petition?
- Is a bank guarantee required to be unconditionally encashable if the underlying constitutional petition is dismissed?
1. ABDUL KADIR SHAIKH, J--After we heard the learned counsel for the parties at some length they agreed that this petition may be converted into an appeal and the impugned order of the High Court, dated 21-11-1984 may be substituted by the interim order of this Court, dated 20th March, 1985 as modified by the application filed by the learned counsel for both the parties in Court today.
2. We, therefore, convert this petition into an appeal and allow the appeal and set aside the impugned order of the High Court and direct that pending final disposal of the constitution petition filed by the appellant in the High Court, namely, Constitution Petition No. 727-D of 1984, the impugned demand from appellant-Company shall be held in abeyance, subject to appellant furnishing a bank guarantee to the extent of 50 per cent of the demand and executing security for the balance amount to the satisfaction of the Nazir of the High Court within one month. The bank guarantee to be furnished by appellant shall provide for its encashment unconditionally in case the Constitution Petition in the High Court is dismissed. This, however, is not meant to bar the further legal remedies that may be available to appellant against the order or judgment of the dismissal of the aforesaid Constitution Petition. The parties are left to bear their own costs. revisions by the competent authorities. Therefore, it is advisable to consult the official sources or legal professionals for the most up-to-date and accurate information.