SUI NORTHERN GAS PIPELINES LIMITED vs COMMISSIONER INLAND REVENUE, LEGAL DIVISION, LARGE TAXPAYERS UNIT Ss — 2021 PTD 1582 SUPREME-COURT

Case information

Citation: 2021 PTD 1582 SUPREME-COURT
Court: Supreme Court of Pakistan
Year: 2021
Reporter: PTD
Parties: SUI NORTHERN GAS PIPELINES LIMITED vs COMMISSIONER INLAND REVENUE, LEGAL DIVISION, LARGE TAXPAYERS UNIT Ss
Subject matter: Tax & Customs
Provisions referred to: S. 171; S. 170; Income Tax Ordinance

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

SUI NORTHERN GAS PIPELINES LIMITED VS COMMISSIONER INLAND REVENUE, LEGAL DIVISION, LARGE TAXPAYERS UNIT Ss. 170 & 171---additional payment for delayed refunds---Scope---Compensation payable to a taxpayer under S. 171 of the Income Tax Ordinance, 2001 ('the Ordinance') on account of a delay in the payment of a refund that becomes due and payable to the taxpayer---Whether such compensation was to be regarded as a capital or revenue---Held, that such compensation was not a capital receipt---Payment under S. 171 of the Ordinance became due when the taxpayer was not refunded, in a timely manner, the tax in excess to the amount which the taxpayer was properly chargeable under the Ordinance---In essence the question boiled down to this: if the amount that was liable to be refunded in terms of S. 170 was to revenue account, whether the compensation payable under S. 171 on account of late payment could nonetheless take the character of a capital receipt---High Court rightly came to the conclusion that in such circumstances the character of the compensation could not be altered or affected and continued to retain the character of what might be called principal payment (the refund payable under S.170)---Even the audited accounts of the taxpayer in the present case showed that the compensation was disclosed by the tax payer itself as part of its income---appeal filed by taxpayer was dismissed.

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