Law: Income Tax Ordinance, 2001

Section: 214C,214D,214D(4)

THIS JUDGMENT DELIVERED BY: SHAMS MEHMOOD MIRZA, JUSTICE:---.--- This writ petition calls into question the legality of notice dated 08.01.2018 whereby the petitioner has been selected for audit in terms of section 214-C of Income Tax Ordinance, 2001 (the Ordinance). 2. Learned counsel submits that the petitioner is a "retailer" by virtue of Rule 4 of the Sales Tax Special Procedure Rules, 2007 (the Rules) and that he is required to pay sales tax under SRO No. 1125(I)/2011 dated 31.12.2011 in terms of the proviso to Rule 5 of the Rules. He further referred to sub-section (4) of section 214D of the Ordinance to contend that the petitioner being a retailer under Rule 4 was not liable for audit in terms of section 214C of the Ordinance. 3. Learned counsel for the respondents, on the other hand, submitted that the petitioner was not registered as a retailer with the sales tax department. He furthermore submitted that the petitioner was in fact registered with the sales tax department on 26.12.2012 whereas Rule 4 and Rule 5 were inserted through SRO No. 608(I)/2014 dated 02.07.2014 and as such the petitioner cannot seek benefit of sub-section (4) of section 214D of the Ordinance. 4. Rule 4 of the Rules stipulates that the retailers falling in any of the category mentioned therein are required to be registered under the Sales Tax Act, 1990 in terms of Chapter-I of the Rules. Learned counsel for the petitioner has today placed on record the copy of taxpayer registration profile which clearly shows that the petitioner is a retailer registered with the sales tax department. The petitioner, therefore, fulfills the requirement prescribed by Rule 4. The return filed by the petitioner has…

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