Law: Sales Tax Act, 1990

Section: 11E, 8

Tagline: Failure to pass an adjudication order within the mandatory timeframe does not bar the issuance of a fresh show-cause notice on the same facts if the primary 5-year statutory limitation period for assessment has not yet expired and the matter was not previously decided on merits. Summary: This case addresses the legality of fresh Show-Cause Notices (SCNs) issued by the FBR after previous assessment orders were vacated by the Appellate Tribunal Inland Revenue (ATIR). The ATIR had set aside the initial orders solely because they were passed beyond the mandatory 120-day limit (plus extensions) prescribed under the law, without deciding on the merits of the input tax discrepancies. The High Court held that Section 11G of the Sales Tax Act, 1990, provides two separate limitations: one for issuing a notice (5 years) and one for passing an order (120+90 days). Since the earlier orders were void ab initio due to procedural delays and the underlying tax liability was never adjudicated on its merits, the principle of res judicata does not apply. Consequently, the department is legally permitted to issue fresh SCNs as long as they fall within the overall five-year statutory window. ORDER; INAAM AMEEN MINHAS, J:- This judgment shall decide the afore-titled Writ Petitions, as they involve common questions of law and facts. The petitioners has assailed the Show-Cause Notices issued under section 11E of the Sales Tax Act, 1990 (“STA, 1990”) dated 08.04.2025 for tax year, January-2020 to Decemebr-2020 in W.P No. 1702/2025, and tax year, January-2021 to Decemebr-2021 in W.P No. 1703/2025 respectively (“Impugned SCNs”), by respondent No.02 i.e. Federal Board of Revenue (“FBR”).   The brief facts in W.P No. 1702 of 2025 are that the petitioner company, engaged in the manufacturing and distribution of chemical fertilizers, was served with Impugned SCN for tax year Jan-2020 to Dec-2020. The genesis of the dispute lies in an earlier SCN (C. No. 302) issued on 14.12.2023 under Section 11(2) of the STA, 1990, whereby FBR observed discrepancies in input tax claimed by the petitioner company against local purchases and imports, which is…