Law:

Section:

(a) Sales Tax Act (VII of 1990)--- ----Ss.36, proviso [as added by Finance Ordinance (XXI of 2000) and amended by Finance Act (I of 2003)]---Finance Act (III of 2006) S.45(2) [as added by Finance Act (III of 2006)]---Initiation of proceedings for recovery of tax not levied or short levied or erroneously refunded---Limitation---Period of 45 days prescribed for completion of adjudication proceedings by Finance Ordinance, 2000 and enhanced to 90 days by Finance Act, 2006---Not directory, but mandatory---Principles. The claim of the Revenue that the prescribed limitation of 45 days for completion of adjudication proceedings as provided through Finance Ordinance, 2000 and enhanced to 90 days by Finance Act, 2006 is merely directory cannot be accepted. Where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen, the prescription of time is deemed directory. However, where a public functionary is empowered to create liability against a citizen only within the prescribed time, it is mandatory. The acceptance of contention of the revenue in that regard will make a provision of law redundant and nugatory. Redundancy or superfluity of an Act of Parliament and a provision of law cannot be readily accepted. All the more so when the prescribed limit is beneficial for the citizen and restricts the executive power to touch the pocket of a taxpayer thereby creating certainty, then after its expiry, even if there was a good case for creation of liability, he will not be dragged in. Nagina Silk Mill, Lyallpur v. The Income Tax Officer and the Income Tax Appellate Tribunal, Pakistan PLD 1963 SC 322 rel. Nagina Silk Mill, Lyallpur v. The Income-Tax Officer and the Income Tax Appellate Tribunal, Pakistan PLD 1963 SC 322 distinguished. (b) Taxation--- ----Provision of law prescribing time limit for revenue to create liability against taxpayer would be deemed to be mandatory---Principles. Where inaction on the part of a public functionary within the prescribed time is likely to affect the rights of a citizen, the prescription of time is deemed directly. However, where a public functionary is empowered to create liability…

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