Law: Constitution of Pakistan, 1973

Section: 199, 10A

Law: Income Tax Ordinance, 2001

Section: 137-140

 Summary The petitioner challenged recovery proceedings initiated for Tax Year 2019 while its statutory appeal was still pending. The Court held that recovery during pendency of appeal—especially where delay is not attributable to the taxpayer—undermines the right to fair adjudication. The Court directed the appellate authority to decide the appeal and stay application within 60 days and restrained the tax department from taking coercive recovery action until then. Tagline “No tax recovery until appeal is decided by an independent forum.” ORDER; Through the instant Writ Petition under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973, the petitioner has sought inter alia direction to respondent No.3, to decide its pending appeal and in the meanwhile restraining respondent No.4 from initiating the recovery proceedings in pursuance of impugned Order dated 16.11.2020, for payment of Income Tax liability for the Tax Year, 2019. Learned counsel for the petitioner submitted that the impugned notice is illegal, arbitrary and against the law. It was further contended  that  initiation  of  recovery proceedings during the pendency of petitioner’s appeal is against his fundamental rights guaranteed under the Constitution. It was further contended that it is trite law that unless there is adjudication by one independent forum, no recovery proceedings can be initiated against the assessee. In this behalf learned counsel placed reliance on the case titled “M/s Pak Saudi Fertilizers Ltd. Vs. Federation of Pakistan and others” (2002 PTD 679), “Z.N. Exporters (Pvt.) Ltd Vs. Collector of Sales Tax” (2003 PTD 1746), “Brothers Engineering (Pvt.) Ltd Vs. Appellate Tribunal Sales Tax” (2003 PTD 1836). Learned counsel further contended that delay in decision of the appeal is not on part of the petitioner, therefore, impugned Order dated…