WAZIR ALI INDUSTRIES LTD. vs FEDERATION OF PAKISTAN S — 2023 PTD 576 KARACHI-HIGH-COURT-SINDH

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WAZIR ALI INDUSTRIES LTD. VS FEDERATION OF PAKISTAN S.25(1)---access to record and documents---Commissioner, jurisdiction of---Scope---Requirements of S.25(1) of Sales Tax act, 1990, are neither unfettered nor are so liberal that a hunting expedition would commence---There has to be an event or occasion when Commissioner requires record and documents maintained under Sales Tax act, 1990, or any other act--- Even requiring documents/record for satisfaction of queries must be revealed so that notice may not transform into a hunt. Citation Name: 2023 PTD 576 KARACHI-HIGH-COURT-SINDHBookmark this Case WAZIR ALI INDUSTRIES LTD. VS FEDERATION OF PAKISTAN Ss.25 & 72B---Selection of case for audit---Federal Board of Revenue and Commissioner---Jurisdictions---Distinction---Petitioners were taxpayers who were aggrieved of selection of their cases for audit by Commission on the directions of Federal Board of Revenue---Validity---Powers of Commissioner under S.25 of Sales Tax Act, 1990 and powers of Federal Board of Revenue under S.72B of Sales Tax Act, 1990, were independent---Former was based on subjective criteria and Commissioner was empowered to critically analyze returns of taxpayer---While the Commissioner was required to apply his mind to case of individual taxpayer and decide if there were reasons to select a taxpayer for audit---Federal Board of Revenue's powers under S.72B of Sales Tax Act, 1990, were objective in substance and were done under an objective policy for that year and then taxpayers were selected and/or a sector or sectors of taxpayers were selected through computer balloting on the basis of criterion---Where the Commissioner was to apply mind and provide reasons for selection, the later scheme of Federal Board of Revenue under S.72B of Sales Tax Act, 1990, enabled it to select a taxpayer through random and parametric balloting based on the development of a software which tookover the task of a Commissioner--- It was an automatic selection and in some cases even notices calling for documents/record under S.25(1) of Sales Tax Act, 1990 under automatic audit selection---In the present case the entire exercise by Commissioner was carried out at the behest and on directions of Federal Board of Revenue and resulted in demand created against petitioners and Federal Board of Revenue itself was responsible for such foul play---High Court quashed notices issued by authorities---Constitutional petition was allowed accordingly. Citation Name: 2023 PTD 576 KARACHI-HIGH-COURT-SINDHBookmark this Case WAZIR ALI INDUSTRIES LTD. VS FEDERATION OF PAKISTAN S.25(1)---access to record and documents---Pre-conditions---Phrase "as an when required"--- Scope---Event or stage when said phrase may come into play and is given some meaning is when a Commissioner examines return of a tax payer, he may have some queries which might be tempting to call record as he may not be able to reconcile and/or resolve them through return statement---Such queries must be understood and settled to the satisfaction of the Commissioner before he can make up his mind further---audit is nowhere in the scheme when such questions come for consideration after going through the returns while the Commissioner acts under 25(1) of Sales Tax act, 1990--- Record may satisfy curious mind but queries must be genuine at the time of calling the record which could not have been answered without going through the record required--- Record calling cannot be a roving exercise and cannot be a courtesy call either. Citation Name: 2023 PTD 576 KARACHI-HIGH-COURT-SINDHBookmark this Case WAZIR ALI INDUSTRIES LTD. VS FEDERATION OF PAKISTAN S.25(1) & (2)---access to record and documents---Commissioner, duty of---Scope---Two provisions of S.25 of Sales Tax act, 1990, are distinct and different but inseparable as well---Commissioner who calls documents and/or record of taxpayer for the satisfaction of queries and objections in context of returns, he must have formed a view for officer of Inland Revenue to be communicated for conducting audit---Provision of S.25(2) of Sales Tax act, 1990, cannot work independently unless Commissioner has framed such obligations on the basis of record that "he" obtained. Citation Name: 2023 PTD 576 KARACHI-HIGH-COURT-SINDHBookmark this Case WAZIR ALI INDUSTRIES LTD. VS FEDERATION OF PAKISTAN art.199---Judicial review---Scope---all administrative actions are subject to judicial review---To judicially review such actions, Courts must be able to see its legitimacy, based on which the authority has acted---If no legitimate occasions are disclosed, there is no basis on which an action can be judicially reviewed---That is precisely why the Courts have consistently "read in" the requirement to provide reasons in all statutes, even where such requirement is not explicitly mentioned in a statute. Citation Name: 2023 PTD 576 KARACHI-HIGH-COURT-SINDHBookmark this Case WAZIR ALI INDUSTRIES LTD. VS FEDERATION OF PAKISTAN S.25(2)---access to record and documents--- Phrase "on the basis of the record , obtained under subsection (1)"---applicability---Phrase applies to Commissioner's act of authorizing officer to conduct audit, i.e., selecting taxpayer for an audit, and not officer's act of conducting audit itself--- Provision of S.25(2) of Sales Tax act, 1990, does not concern the manner in which audit is to be conducted but specifically concerns selection of a person for an audit, inquiry or investigation.

WAZIR ALI INDUSTRIES LTD. vs FEDERATION OF PAKISTAN S — 2023 PTD 576 KARACHI-HIGH-COURT-SINDH

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