CHINA MACHINERY ENGINEERING CORPORATION, PAKISTAN BRANCH vs FEDERATION OF PAKISTAN Ss

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CHINA MACHINERY ENGINEERING CORPORATION, PAKISTAN BRANCH VS FEDERATION OF PAKISTAN Ss.138 & 140---Recovery of tax due---Coercive measures---Principle---Petitioner / taxpayer assailed recovery of tax due from its bank accounts by authorities---Plea raised by petitioner / taxpayer was that such recovery was made without issuance of prior notice under S.138(1) of Income Tax Ordinance, 2001---Validity---Revenue functionaries have an obligation to exercise their authority under Income Tax Ordinance, 2001, such that it does not undermine rights of taxpayers to due process, fair trial and access to justice---Tax authorities are under obligation to afford protection of law to the citizens rather than becoming instruments of denying taxpayer of such protection---Regardless of whether it is Commissioner (Appeals), Income Tax Appellate Tribunal, or High Court upholding an assessment order, tax authorities are under an obligation to issue notice under S. 138(1) of Income Tax Ordinance, 2001, before they resort to use of coercive means under S. 138(2) or 140 of Income Tax Ordinance, 2001---Provision of S. 138(1) of Income Tax Ordinance, 2001, conceives that a reasonable timeframe is to be specified by the Commissioner within which tax due is to be paid---It is inconceivable that such reasonable time could be a period of less than 7 days as the purpose of such provision is to put the taxpayer on notice to discharge tax obligation within a reasonable period and also afford taxpayer an opportunity to avail his statutory right of appeal, if so advised---High Court set aside notice issued by authorities in purported exercise of authority under S.140 of Income Tax Ordinance, 2001, as the same was without lawful authority and of no legal effect for not complying with mandatory requirement of issuing a notice under S.138(1) of Income Tax Ordinance, 2001---High Court directed the authorities to ensure reimbursement of amount recovered from bank accounts of petitioner / taxpayer pursuant to notice under S.140 of Income Tax Ordinance, 2001, or to credit it to the same bank accounts, unless the same was otherwise liable to be recovered or retained in accordance with law---Constitutional petition was allowed, in circumstances.

CHINA MACHINERY ENGINEERING CORPORATION, PAKISTAN BRANCH vs FEDERATION OF PAKISTAN Ss — 2024 PTD 242 LAHORE-HIGH-COURT-LAHORE

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