INTERLOOP LIMITED vs FEDERATION OF PAKISTAN through Secretary Finance Ss

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INTERLOOP LIMITED VS FEDERATION OF PAKISTAN through Secretary Finance Ss.11 & 25---assessment and audit---Scope---audit is a multifaceted device with a much broader purpose and is not about assessment of taxes alone---Powers available to Officer of Inland Revenue under S.11 of Sales Tax act, 1990, are not in any way dependent on and subject to audit of taxpayer---audit and assessment of tax under S.11 Sales Tax act, 1990, are two separate specie of proceedings which have no correlation with each other. S.25---audit Policy, 2019---audit---Object, scope and purpose---Main goals sought to be achieved from audit include determination of accuracy of tax return in relation to tax liability and assessment by taxpayer, to review taxpayer's records to ascertain compliance with relevant tax laws; and to promote voluntary compliance and monitoring thereof. Ss.11, 25 & 73(3)---assessment and audit---Initiation of proceedings--- Preconditions --- Factual controversy --- alternate remedies---Petitioners/taxpayers were aggrieved of show cause notices issued to them on the plea that proceedings under S.11(2) of Sales Tax act, 1990---Validity---allegations contained in show cause notices were based on information gathered from audited accounts and sales tax returns filed by petitioners---allegations related to disposal of fixed assets by petitioners without payment of sales tax and claiming of inadmissible input tax against purchase made from inactive / de-registered suppliers, details whereof were mentioned in show-cause notice---Excess input tax claimed on insurance, failure to deposit sales tax on advances from customs, suppression of sales tax by way of export declaration, suppression of sales and violation of S.73(3) of Sales Tax act, 1990, were also alleged in show-cause notice---allegations contained in show-cause notice fell within the parameters of S.11(2) of Sales Tax act, 1990---High Court declined to interfere in the matter as there was no jurisdictional error in show cause notices issued to petitioners and factual allegations contained therein required to be responded to by petitioners---any adjudication by Officer of Inland Revenue, if adversely affecting rights of petitioners, could be challenged in the manner before forums provided under Sales Tax act, 1990---Constitutional petition was dismissed in circumstances. S.11---assessment and recovery---Tax not levied, short levied or erroneously refunded---Scope---adjudicatory mechanism for assessment of tax liability has been provided only in S.11 of Sales Tax act, 1990---Both procedure for assessment of tax and substantive grounds on which assessment can be made by officer of Inland Revenue are contained in S.11 of Sales Tax act, 1990, which combines in its fold authority of Officer of Inland Revenue to detect cases on grounds enumerated therein and power to pass assessment order subject to issuance of show cause notice and granting hearing to taxpayer---Such power can be exercised by Officer Inland Revenue based on tax returns filed by person or with the help of record already available with department---adjudicatory mechanism can be set in motion once existence of conditions mentioned in S.11 of Sales Tax act, 1990, come to the notice of Officer of Inland Revenue by looking either at sales tax returns or record already provided by taxpayer / registered person.

INTERLOOP LIMITED vs FEDERATION OF PAKISTAN through Secretary Finance Ss — 2022 PTD 769 LAHORE-HIGH-COURT-LAHORE

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