| Citation(s) |
|---|
| 2026 SLG 1338 2026 SLD 1338 = 2026 SCP 33 |
C.P.L.A. No.1990 of 2025 (Against order dated 10.03.2025 of the Lahore High Court, Rawalpindi Bench, Rawalpindi, passed in S.T.R No.49 of 2024)
Justice Naeem Akhter Afghan Justice Muhammad Shafi Siddiqui Justice Miangul Hassan Aurangzeb
Syed Rifaqat Hussain Shah, AOR Malik Itaat Hussain Awan, ASC a/w Ms. Romana Alam, Addl. Commissioner I.R (FBR) and Mr. Yousaf Khan, S.O. Legal, FBR.
Assistant Commissioner Inland Revenue Unit III Zone-Cantt, RTO, Rawalpindi and others …Petitioners
VERSUS
Umer Tariq Khan …Respondent
Law: Sales Tax Act, 1990
Section: 11G(2), 11(5), 11(3),2(14), 3, 6, 7,8(1)(ca), (d), (f), (i),8A,23, 25, 26, 73,2(33A), 2(37), 34(1)(c), 33, 47, 11(5)
Law: Constitution of Pakistan, 1973
Section: 189
Summary
The Supreme Court dismissed a petition by tax authorities challenging a Lahore High Court order that quashed a tardy sales tax assessment order against the respondent. The High Court had relied on established precedents holding the 120-day time limit for issuing orders under the Sales Tax Act, 1990, as mandatory, not directory. The Court reaffirmed this binding law, criticized the FBR for repetitively litigating settled issues, and urged internal reforms to prevent such filings.
Core Points
- Tax authorities issued a show-cause notice on 15.11.2023 alleging inadmissible input tax of Rs. 4,012,513/- under multiple sections of the Sales Tax Act, 1990.
- Order-in-Original imposing tax, surcharge, and 100% penalty was passed on 20.03.2024, exceeding the 120-day limit from the notice.
- Respondent's appeal was dismissed, but the High Court allowed their reference on 10.03.2025, applying ratio from Commissioner Inland Revenue vs. POF Welfare Packages (based on Supreme Court precedents like Super Asia).
- Supreme Court held the time limit under first proviso to section 11(5)/11G(2) mandatory, dismissing the petition as the law is settled and binding under Article 189.
- No evidence of delay caused by respondent's adjournments; petitioners conceded the legal position before High Court.
- Court deprecated FBR's practice of filing petitions on settled law, causing docket clogging and costs; recommended costs, officer accountability, and FBR committees for pre-filing review.
Laws and Sections Cited
| Law | Section/Provision | Context/Description |
|---|---|---|
| Sales Tax Act, 1990 | Section 11(3) | Basis for assessing and recovering inadmissible input tax.- |
| Sales Tax Act, 1990 | Section 2(14), 3, 6, 7 | Definitions and general provisions on taxable supplies, input tax adjustments.- |
| Sales Tax Act, 1990 | Section 8(1)(ca), (d), (f), (i) | Restrictions on input tax credits (e.g., fake invoices, non-creditable items).- |
| Sales Tax Act, 1990 | Section 8A | Special procedures for input tax adjustments. |
| Sales Tax Act, 1990 | Section 23, 25, 26 | Offences related to records, evasion, and false declarations. |
| Sales Tax Act, 1990 | Section 73 | Recovery of tax not paid or short-paid. |
| Sales Tax Act, 1990 | Section 2(33A), 2(37) | Definitions of "person" and "registered person." |
| Sales Tax Act, 1990 | Section 34(1)(c) | Default surcharge calculation. |
| Sales Tax Act, 1990 | Section 33 (Table, Serial No. 13) | 100% penalty for violations. |
| Sales Tax Act, 1990 | Section 47 | Reference to High Court against appellate orders. |
| Sales Tax Act, 1990 | First proviso to section 11(5) / section 11G(2) | Mandatory 120-day time limit for passing order after show-cause notice (core issue). |
| Constitution of Pakistan | Article 189 | Binding precedent of Supreme Court judgments on subordinate courts/authorities.- |
ORDER