M/S.) SARDARPUR TEXTILE Mjills And Others vs FEDERATION OF PAKISTAN
This matter concerns a petition for leave to appeal before the Supreme Court of Pakistan regarding the levy of taxes under the Income Tax Ordinance. The core legal question addressed by the Court involves the conditions under which the recovery of disputed tax liabilities may be suspended during the pendency of appellate proceedings. The Court granted leave to appeal, directing that all related appeals be heard together at an early date. Regarding the interim relief sought, the Court held that the recovery of the tax shall remain suspended provided that the appellants furnish an undertaking to pay the tax as levied or leviable under the relevant provisions of the Income Tax Ordinance, along with interest calculated at a rate of 2% over the prevailing Bank rate, in the event that their appeals are ultimately dismissed. This order establishes the principle that interim suspension of tax recovery during pending litigation is conditional upon the taxpayer providing financial security to protect the revenue interest of the state should the appeal fail.
- Can the recovery of tax be suspended during the pendency of an appeal?
- What conditions must an appellant satisfy to obtain a stay on tax recovery during an appeal?
- Is the payment of interest required as a condition for suspending tax recovery pending an appeal?
- Section 80-C, Income Tax Ordinance 1979
- Section 80-CC, Income Tax Ordinance 1979
- Section 80-D, Income Tax Ordinance 1979
ORDER ORDER SAAD SAOOD JAN, J.- Leave to appeal has been granted in C.P. No. 234-L of 1995 on 4-4-1995 to consider the same legal issue as has been raised in these petitions. Leave to appeal is therefore granted in these petitions as well. All the appeals should be heard together at an early date.
2. During the pendency of the appeals if the appellants undertake that they shall pay the tax as levied or leviable under Sections 80-C, 80-CC and 80-D of the Income Tax Ordinance, with interest at the rate of 2% over the Bank rate in the event the appeals are dismissed, the recovery of the tax shall remain suspended.