COMMISSIONER INLAND REVENUE ZONE-IV, LARGE TAXPAYER UNIT, KARACHI vs AL-ABID SILK MILLS LTD — 2023 SCMR 1797 SUPREME-COURT

Case information

Citation: 2023 SCMR 1797 SUPREME-COURT
Court: Supreme Court of Pakistan
Year: 2023
Reporter: SCMR
Parties: COMMISSIONER INLAND REVENUE ZONE-IV, LARGE TAXPAYER UNIT, KARACHI vs AL-ABID SILK MILLS LTD
Subject matter: Criminal
Provisions referred to: Sales Tax Act

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

Judgment text as reported

COMMISSIONER INLAND REVENUE ZONE-IV, LARGE TAXPAYER UNIT, KARACHI VS AL-ABID SILK MILLS LTD., A-39, MANGHOPIR ROAD, SITE, KARACHI Ss. 25 & 8(1)(c)(a)---Constitution of Pakistan, Art. 10A---Allegation of issuing fake/flying invoices and claiming input tax against such invoices---Liability raised against tax payer based on presumptions---No attempt made by the Department to verify the invoices---In the present case the show cause notice was issued in a mechanical manner---Allegations were vague and the facts had not been verified---Moreover, the taxpayer was asked to establish that its suppliers i.e. the eight distinct entities had not made supplies and that they had not deposited the output tax in the government treasury---It was on this basis that it was presumed that the invoices were fake/flying and thus the input tax adjusted against such invoices was alleged to be inadmissible---Taxpayer was further asked to produce documents which were not required to be maintained under the Sales Tax Act, 1990 ('Act of 1990') at the relevant time---Department had issued a vague show cause notice pursuant to a report, without first making an inquiry of its own to verify the facts relating to the eight entities i.e whether they had deposited the tax in relation to the supply made to the taxpayer.

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