Messrs INTER-OCEAN CARGO SERVICES, KARACHI vs FEDERATION OF PAKISTAN through Chairman, Central Board of Revenue, Islamabad and 2 others

This matter concerns a constitutional petition filed by Messrs Inter-Ocean Cargo Services, Karachi, against the Federation of Pakistan and others, seeking interim relief regarding tax recovery proceedings initiated by the Income Tax Department. The core legal question addressed by the Court was whether interim relief should be granted to the petitioner to restrain the tax authorities from enforcing a tax demand and recovering funds from the petitioner's bank account, specifically where a notice had already been issued to the bank under the relevant tax statute. The Court, following the precedent set in similar matters, held that the department should be restrained from enforcing the demand under Section 80-C of the Income Tax Ordinance, 1979. Consequently, the Court ordered that if the department had not yet recovered the funds from the Allied Bank of Pakistan pursuant to the notice issued under Section 92 of the Income Tax Ordinance, 1979, no further recovery action should be taken against the petitioner pending the final adjudication of the petition. The principle established is that interim relief may be granted to stay recovery proceedings even after a notice of attachment has been issued to a third party.