Law: Sales Tax Act, 1990

Section: 38,40

Law: Constitution of Pakistan, 1973

Section:

 SUMMARY
The High Court dismissed the constitutional petition challenging an inspection carried out by Inland Revenue authorities at the petitioner’s business premises under Section 38 of the Sales Tax Act, 1990. The petitioner contended that Section 38 could not be exercised independently without invoking Section 40, which requires a magistrate’s warrant, and alleged coercion and mala fides. The Court held that Sections 38 and 40 operate independently and serve distinct purposes: Section 38 authorizes routine, non-coercive inspection and verification of records, while Section 40 governs intrusive search and seizure based on a warrant. The inspection in question was conducted pursuant to a valid authorization issued by the Commissioner, based on objective discrepancies identified through a desk audit. No coercive action or unlawful seizure was established. Reliance on Ghulam Hassan was found misplaced, as the record was voluntarily produced. Consequently, no illegality, arbitrariness, or lack of jurisdiction was made out.

TAG LINE
Routine tax inspection under Section 38 is lawful without a magistrate’s warrant; Sections 38 and 40 operate independently.

ORDER;