COMMISSIONER INLAND REVENUE, ZONE-VIII, REGIONAL TAX OFFICE-II, LAHORE vs SIKA PAINT INDUSTRIES (PVT

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

COMMISSIONER INLAND REVENUE, ZONE-VIII, REGIONAL TAX OFFICE-II, LAHORE VS SIKA PAINT INDUSTRIES (PVT.) LTD. Ss. 38-a & 40---Criminal Procedure Code (V of 1898), Ss. 96, 98, 99-a, 100 & 103---Search of documents, items etc.---Officer of Inland Revenue---Powers---Section 40 of Sales Tax act, 1990 authorizes an Officer of Inland Revenue to enter a place, after obtaining a warrant from a Magistrate, to search any documents or items, that in his opinion may be useful or relevant to any proceedings under Sales Tax act, 1990---The use of word "shall" in subsection (2) of S. 40 of the Sales Tax act, 1990, makes the procedure outlined in the Criminal Procedure Code, 1898 as mandatory---Provisions of S. 103, Cr.P.C., require that a search be conducted in the presence of two or more respectable inhabitants of the locality, which was not done in the present case---In the present case, relevant recovery memo did not contain signatures of any witnesses; which established that no witnesses were associated with the seizure of record and / or preparation of the seizure memo---Provisions of Section 40 of the Sales Tax act, 1990 had not been complied with by the department in letter and spirit while conducting raid and seizing the documents---all searches made under the Sales Tax act, 1990 were to be carried out in accordance with the provisions of the Code of Criminal Procedure, 1898---Procedure regarding search had been provided in Ss. 96, 98, 99-a & 100 of the Cr.P.C. whereby firstly, a search warrant is to be obtained from the Illaqa Magistrate when search of the premises is to be conducted---In accordance with S. 103 of the Cr.P.C., it is mandatory to involve two or more respectable inhabitants of the locality in which the place to be searched is situated to attend and witness the search and a list of all articles taken into possession shall be prepared and a copy thereof shall be delivered there and then---It was evident from the record that there had been a clear departure from the compliance of the procedure and law qua the impugned action, therefore, the so-called recoveries could not be used against the respondent---Section 38-a (inserted through the Finance act, 2004), S. 40 (substituted through the Finance act, 2004) and S. 40-a (omitted by the Finance act, 2006) were meant to curtail and monitor the unlimited and unbridled powers of the sales tax authorities, which was resulting in undue harassment and humiliation of taxpayers---No doubt, tax officials are empowered under the law and are duty bound to check tax evasion but, it is always to be kept in mind that the evasion of taxes and duties is a contravention of law, which cannot be eradicated through commission of another illegality and contravention of law---an illegality can be checked by adherence to the dictates and requirements of law only---applicant-department had failed to pinpoint any illegality or legal infirmity in the impugned order passed by appellate Tribunal Inland Revenue---Thus, proposed question was answered in affirmative i.e. decided against the applicant-department---Reference application, filed by department, was dismissed.

COMMISSIONER INLAND REVENUE, ZONE-VIII, REGIONAL TAX OFFICE-II, LAHORE vs SIKA PAINT INDUSTRIES (PVT — 2025 PTD 1095 LAHORE-HIGH-COURT-LAHORE

Case information

Judgment text as reported

Other judgments reported in 2025 PTD