PEPSI COLA INTERNATIONAL (PVT.) LIMITED vs FEDERATION OF PAKISTAN S

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PEPSI COLA INTERNATIONAL (PVT.) LIMITED VS FEDERATION OF PAKISTAN S.161---Income Tax Rules, 2002, R.44(4)---Constitution of Pakistan, Art. 199---Constitutional petition---Tax due---Recovery---Reconciliation--- Dispute was with regard to notice of recovery of tax due issued under S.161 of Income Tax Ordinance, 2001---Validity---Rational in S. 161 (1B) of Income Tax Ordinance, 2001, was that a tax liable to be adjusted against tax due, could not be recovered when tax due had already been paid--- Recovery of any amount, thereafter, not adjustable against tax due for relevant period was to be refunded and whole exercise for recovery would be futile, as tax collected would not become part of National Exchequer rather would burden it with an expense which could have been expended for recovery of tax due--- Pursuit of creating such demands by tax administrators, to meet budgetary targets, not only wasted resource and revenue but burdened judicial hierarchy up till Supreme Court--- There must, at least initially, be some reason or information available with Commissioner for him to conclude that there was, or could have been, a failure to deduct tax--- All tax authorities for the purpose of S.161 Income Tax Ordinance, 2001 were to identify payments, whether singly or in lump sum (i.e.) as part of a broader class or category of such payments---Triggering event for issuance of Notice was a failure to either collect tax or deduct it---Commissioner was to point out a payment to cast burden wholly or solely on the taxpayer---After issuance of Notice, the first thing needed to be verified was, whether tax, required to be deducted or collected, of a person had been paid or not---If tax liability for relevant tax year was found paid/discharged, the Commissioner could proceed only to impose default surcharge and penalty---Reconciliation, under R. 44(4) of Income Tax Rules, 2002, could not be called without first ensuring filing of statements under the rule---High Court set aside order in question as the same was passed by authorities ignoring judgments passed by Superior Courts---Constitutional petition was allowed accordingly.

PEPSI COLA INTERNATIONAL (PVT.) LIMITED vs FEDERATION OF PAKISTAN S — 2023 PTD 541 LAHORE-HIGH-COURT-LAHORE

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