MEHR DASTGIR LEATHER AND FOOTWEAR INDUSTRIES (PVT.) LIMITED vs FEDERATION OF PAKISTAN through Secretary Minist

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MEHR DASTGIR LEATHER AND FOOTWEAR INDUSTRIES (PVT.) LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance Ss. 11(2) & 74---Constitution of Pakistan, Art. 199---Constitution petition---Assessment / recovery of tax not levied/ short levied---Condonation of time limit by the Federal Board of Revenue--- Scope --- Petitioner/company filed constitutional petition against action under S.11(2) of the Sales Tax Act, 1990 ('the Act, 1990') whereby it was alleged that it had claimed a refund which was not admissible under the Act 1990---Case of the petitioner/company was that the Show-Cause Notice, issued by the Department /Respondent, envisaged the same dispute which had already been decided by the courts up to the Supreme Court of Pakistan--- Department /Respondents, relaying on certain documents, contended that impugned-action had been taken after approval from FBR for condonation of time limit under S. 74 of the Act, 1990 after due process/communication commencing from a letter addressed by the Assistant Commissioner Inland Revenue on 26.04.2022 and culminating into approval letter dated 01-07-2022 by the FBR with certain terms ('FBR Approval Letter)---Validity--- Section 74 of the Act, 1990 grants power to the Board to permit an act or thing to be done within such period or time as it may be considered appropriate---This condonation applies where any time or period has been specified under any provision of the Act or rules within which any application is to be made or any of the act or thing is to be done--- The condonation may under peculiar circumstances permit such act or thing to be done within an extended period of time--- Quite clearly, this provision does not apply to an action being taken under S. 11 (now repealed) which relates to assessment of tax and recovery of tax not levied or short levied or erroneously refunded---The action against the petitioner/company was being taken under S.11(2) of the Act, 1990 and alleged that the petitioner-company had claimed a refund which was not admissible under the Act---There have to be reasonable and rational grounds which should compel the Board to make an order in the nature of the one envisaged by S. 74 of the Act, 1990---No guidelines or parameters have been mentioned in S.74 of the Act, 1990 and the least that FBR should do is to provide reasons for extending the limitation period---There cannot be unbridled reversal of statutory period of limitation as legal rights have come to accrue in the registered person---There were no reasonable grounds mentioned in the letter of condonation by FBR which would give power to the officer to issue a Show-Cause Notice after almost 15 years--- High Court struck down / quashed the Impugned Show-Cause Notices directing the Respondents/ Department to process the refund claims of the petitioner/company within the next three months---Constitutional petition was allowed, in circumstances. Citation Name: 2025 PTD 16 LAHORE-HIGH-COURT-LAHOREBookmark this Case MEHR DASTGIR LEATHER AND FOOTWEAR INDUSTRIES (PVT.) LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance S.74--- Condonation of time-limit--- Powers---Under S. 74 of the Sales Tax Act, 1990 exercise of power or a request made by an officer of Inland Revenue is not automatic---Reasonable cause has to be spelt out both in the application as well as in the permission granted on that application---It is not enough for FBR to simply condone the time limit and this must be supported by reasons and on the basis of documents which would show that there were circumstances beyond the control of officers of Inland Revenue at the relevant time which constrained them from taking action under the normal time limit. Citation Name: 2025 PTD 16 LAHORE-HIGH-COURT-LAHOREBookmark this Case MEHR DASTGIR LEATHER AND FOOTWEAR INDUSTRIES (PVT.) LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance Ss. 11(2) & 74---Condonation of time limit by the Federal Board of Revenue---Petitioner/company filed constitutional petition against action under S. 11(2) of the Sales Tax Act, 1990 ('the Act, 1990') whereby it was alleged that it had claimed a refund which was not admissible under the Act, 1990---Case of the petitioner/company was that the Show-Cause Notice, issued by the Department /Respondent , envisaged the same dispute which had already been decided by the courts up to the Supreme Court of Pakistan--- Department/Respondents, relying on certain documents, contended that impugned-action had been taken after approval from FBR for condonation of time limit under S. 74 of the Act, 1990 after due process/communication commencing from a letter addressed by the Assistant Commissioner Inland Revenue on 26.04.2022 and culminating into approval letter dated 01-07-2022 by the FBR with certain terms ('FBR Approval Letter)---Validity---Federal Board of Revenue Approval Letter revealed that the time limit was condoned up to 29.08.2022 and obviously the proceedings in the Show-Cause Notice which was issued on 22.08.2022 were not finalized by that/said date--- Hence, proceedings beyond the condonation of time limit up to 29.08.2022 were ultra vires and beyond the jurisdiction of the officer issuing the Show-Cause Notice---The very basis on which Show-Cause Notice had been triggered was the exercise of power conferred under S.74 of the Act, 1990 by FBR whereby time limit was condoned up to 29.08.2022 for finalization of assessment proceedings---High Court struck down / quashed the Impugned Show-Cause Notices directing the Respondents / Department to process the refund claims of the petitioner/company within the next three months---Constitutional petition was allowed, in circumstances. Citation Name: 2025 PTD 16 LAHORE-HIGH-COURT-LAHOREBookmark this Case MEHR DASTGIR LEATHER AND FOOTWEAR INDUSTRIES (PVT.) LIMITED VS FEDERATION OF PAKISTAN through Secretary Ministry of Finance Ss. 11(2) & 74---Condonation of time limit by the Federal Board of Revenue--- Scope--- Petitioner/company filed constitutional petition against action under S.11(2) of the Sales Tax Act, 1990 ('the Act, 1990') whereby it was alleged that it had claimed a refund which was not admissible under the Act, 1990---Case of the petitioner/company was that the Show-Cause Notice, issued by the Department /Respondent, envisaged the same dispute which had already been decided by the courts up to the Supreme Court of Pakistan--- Validity--- Record revealed that there were no reasonable grounds mentioned in the letter of condonation by FBR which would give power to the officer to issue a Show-Cause Notice after almost 15 years---In the meantime, rights had come to vest in the petitioner/company which could not be upset by issuance of Show-Cause Notice---Issuance of show cause notice clearly smacked of mala fide as refund claim of the petitioner / company had been delayed and instead of doing so, petitioner/company had been served with a frivolous and vicious Show-Cause Notice---High Court struck down / quashed the Impugned Show-Cause Notices directing the Respondents/ Department to process the refund claims of the petitioner/company within the next three months---Constitutional petition is allowed, in circumstances.

MEHR DASTGIR LEATHER AND FOOTWEAR INDUSTRIES (PVT.) LIMITED vs FEDERATION OF PAKISTAN through Secretary Ministry of Finance Ss — 2025 PTD 16 LAHORE-HIGH-COURT-LAHORE

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