2023 PTD 1709 PESHAWAR-HIGH-COURT

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Citation Name: 2023 PTD 1709 PESHAWAR-HIGH-COURTBookmark this Case COMMISSIONER INLAND REVENUE WITHHOLDING, REGIONAL TAX OFFICE, PESHAWAR VS CHASHMA SUGAR MILLS (PVT.) LTD., D.I. KHAN Fiscal statute---Necessary ingredients---Fiscal statute normally contains two provisions; charging provisions which impose charge to tax and machinery provisions which provide machinery for quantification of tax and the levy and collection of tax so imposed---Charging provisions are construed strictly while machinery provisions of the statute are not generally subject to a rigorous construction. Citation Name: 2023 PTD 1709 PESHAWAR-HIGH-COURTBookmark this Case COMMISSIONER INLAND REVENUE WITHHOLDING, REGIONAL TAX OFFICE, PESHAWAR VS CHASHMA SUGAR MILLS (PVT.) LTD., D.I. KHAN Ss. 3, 11 [as amended by Finance Act 2016] & 47---Withholding of tax---Retrospective effect---Applicability---Authorities issued show cause notice to respondent company for certain discrepancies with regard to withholding of short/less amount of sales tax as withholding agent while making purchases etc. pertaining to years 2013 and 2014---Appellate Tribunal Inland Revenue held that S.11(2) of Sales Tax Act, 1990, was not applicable to respondent company---Validity---Dispute was with regard to liability of withholding agent in respect of failure to deduct and deposit sales tax on purchases made by it for a period prior to year 2016 as a withholding agent---Provisions of Finance Act, 2016, did not give any impression of its retrospective application---Liability to pay sale tax was on the person making taxable supplies and withholding agent was only responsible to withhold certain amount of tax at specified rate to deposit the same with the revenue---Liability in question was created through Finance Act, 2016, which had no retrospective application---Demand of the revenue for the period prior to the Finance Act, 20l6, was without lawful authority---No tax was due against respondent company, therefore, penalty and default surcharge could not be imposed upon it for the relevant tax period prior to the Finance Act, 20l6---Reference was dismissed, in circumstances. Citation Name: 2023 PTD 1709 PESHAWAR-HIGH-COURTBookmark this Case COMMISSIONER INLAND REVENUE WITHHOLDING, REGIONAL TAX OFFICE, PESHAWAR VS CHASHMA SUGAR MILLS (PVT.) LTD., D.I. KHAN Fiscal statute---Language---Retrospective applicability---Principle---In a taxing statute, as in other statutes, there should be no departure from general rule that words used in a statute must first be given their ordinary and natural meaning---It is only when such an ordinary meaning does not make sense that resort can be made to discovering other appropriate meanings---Principle upon which this view rests is that a tax cannot be imposed without use of clear and express language---To hold otherwise would allow Courts to impose taxation and that would clearly constitute an encroachment upon power of the Legislature---More than that taxation is a process which interferes with personal and property right of the people---Although it is a necessary interference but because it takes from the people a portion of their property, seems to be a valid reason for construing tax laws in favour of tax payer---Intention to impose a tax on the subject must be shown by clear and unambiguous language---Principle that a tax cannot be levied or collected except by authority of law, does not involve further proposition that under the Constitution taxes cannot be levied retrospectively---Once a competent legislature has passed a fiscal law with retrospective effect, the tax levied thereby must be held to be by authority of law and it would be constitutional and not invalid because of its being retrospective---There is nothing inherently unreasonable in giving retrospective effect to an enactment, the object of which is to prevent a loss of revenue to the state which would otherwise occur---No retrospective effect should be given to a fiscal statute unless there is a clear provision or unless the effect is a necessary implication of the provision---Court must lean against giving a statute retrospective operation on the presumption that the legislature does not intend what is unjust---Where the enactment prejudicially affects vested rights or legality of past transaction or impairs existing contacts, then the rule in question prevails---Even if through interpretation two views are equally possible, the one that saves vested rights would be adopted in the interest of justice, specially where Courts deal with taxing statute---Interpretation of fiscal statute has to be made strictly and any doubts arising from interpretation of a fiscal provision must be resolved in favour of tax payer.

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