Law: Income Tax Ordinance, 2001

Section: 177(1)

Law: Sales Tax Act, 1990

Section: 25

ORDER SHAMS MEHMOOD MIRZA, JUSTICE :---.--- This writ petition calls into question the action of the respondents in selecting the case of the petitioner for audit for tax years 2015-2016-20172018 and 2019 in terms of section 25 of the Sales Tax Act, 1990 (the Act) and the follow up noted issued to it for submission of the record as well as the rejection letters turning down the objections raised by the petitioner on its selection for audit. 2. This Court in writ petition No.37213 of 2020 titled Indus Sugar Mills Limited v. Federation of Pakistan etc, in which the issue for selection for audit under section 177(1) of the Ordinance and section 25 of the Sales Tax Act, 1990 was involved, has already declared that the selection for audit does not provide any actionable claim to a taxpayer. While passing the order, this Court relied upon judgments reported as Commissioner Inland Revenue Sialkot and others v. Messrs Allah Din Steel and Rolling Mills and others 2018 SCMR 1328 in which the following pertinent observations were made: mere selection for audit by itself is not a complete process This is the beginning nf a process which may or may not culminate in revision of assessment, enhanced tax liability or other adverse legal consequences It may also be noted that once a Taxpayer Is selected for audit and till such audit is completed, the Taxpayer Is provided ample and multiple opportunities at every step to defend his position, support his returns and offer explanation for the information provided and entries made in the tax returns. Further, even if a discrepancy is discovered he is provided yet another opportunity to explain his position before his assessment is revised. It must therefore, be emphasized that the process of audit is in essence and exercise of re-verification of the truthfulness, accuracy and veracity of…

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