SUNGI DEVELOPMENT FOUNDATION EMPLOYEES PROVIDENT FUND TRUSTEES vs FEDERATION OF PAKISTAN through Secretary Min

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SUNGI DEVELOPMENT FOUNDATION EMPLOYEES PROVIDENT FUND TRUSTEES VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance, Revenue and Economic Affairs Ss.122(5a), 140 & 170---Constitution of Pakistan, art.199---Constitutional petition---Refunds---Coercive measures---authorities recovered amount of tax from Bank account of petitioner / taxpayer---Grievance of petitioner / taxpayer was that amount recovered from bank account was not due and it was illegal and unlawful---Validity---Petitioner/taxpayer was neither liable for payment of any tax due nor paid any tax in lieu of any deemed generated by Commissioner---Question of refund of additional tax paid by petitioner / taxpayer did not arise---Provisions of S.170 of Income Tax Ordinance, 2001, was not attracted---Enforcement of recovery notice under S.140 of Income Tax Ordinance, 2001, against petitioner / taxpayer was illegal in breach of provisions of Income Tax Ordinance, 2001, and art.24 of the Constitution---Such powers tantamount to abuse of authority or reckless disregard of need to exercise diligence by tax officials whose action resulted in confiscation of funds of petitioner / taxpayer from its Bank accounts--- High Court directed Chairman Federal Board of Revenue to ensure that cheque or pay order would be issued in the name of petitioner / taxpayer in an amount equal to that appropriated from the account---High Court further directed Chairman Federal Board of Revenue to bring to the attention of the Board, absence of grievance redressal mechanism for benefit of persons whose funds were wrongfully appropriated by tax officials in exercise of powers under Income Tax Ordinance, 2001, and lack of prescription of standards of diligence to be employed by tax officials, while exercising coercive powers to realize tax demand under provisions of income Tax Ordinance, 2001---High Court directed Federal Board of Revenue to exercise its powers under S.4(2) of Income Tax Ordinance, 2001 to enact an appropriate sub-statutory instrument to breathe life into S.4(1)(s) of Income Tax Ordinance, 2001, read together with S.7 of Income Tax Ordinance, 2001--- High Court further directed Chairman, Federal Board of Revenue to conduct an inquiry to determine whether there existed a practice across Tax jurisdiction in Pakistan whereby tax officials denied taxpayers and third parties due notice of demand under provisions of Income Tax Ordinance, 2001, to frustrate their right to seek remedy against such demand in order to meet recovery targets---High Court further directed Federal Board of Revenue to put in place a system of institutional checks against such practice in order to uphold rights of taxpayers and third part is to avail legal remedies against any tax demand generated against them in accordance with law---Constitutional petition was allowed accordingly.

SUNGI DEVELOPMENT FOUNDATION EMPLOYEES PROVIDENT FUND TRUSTEES vs FEDERATION OF PAKISTAN through Secretary Ministry of Finance, Revenue and Economic Affairs Ss — 2022 PTD 1690 ISLAMABAD

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