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COMMISSIONER INLAND REVENUE vs MULTAN ELECTRIC SUPPLY COMPANY LIMITED Ss — 2025 PTD 1614 LAHORE-HIGH-COURT-LAHORE

Case information

Citation
2025 PTD 1614 LAHORE-HIGH-COURT-LAHORE
Court
Lahore High Court
Year
2025
Reporter
PTD
Parties
COMMISSIONER INLAND REVENUE vs MULTAN ELECTRIC SUPPLY COMPANY LIMITED Ss
Subject matter
Tax & Customs
Provisions referred to
S. 2; Finance Act; 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 VS MULTAN ELECTRIC SUPPLY COMPANY LIMITED Ss. 13 &2 (46)(i), Explanation [added vide Finance Act, 2022]---Electricity Distribution Companies (DISCOs)---Subsidy---Chargeability to tax---Retrospective effect---Scope---Department filed Reference Application against order passed by Appellate Tribunal Inland Revenue (Tribunal) in favour of DISCOs---Validity---Explanation added in sub-clause (i) of Clause (46) of S. 2 of the Sales Tax Act, 1990 (Explanation-in-question) contemplated an unequivocal clarification that the subsidy was not chargeable to the tax under Sales Tax Act, 1990, (the Act, 1990) in case of DISCOs---Explanation-in-question stated that "It is clarified that the value of supply does not include the amount of subsidy provided by the federal government or provincial governments to the electricity consumers and has never been chargeable to tax under the Act"---Pertinently, the explanation-in-question was inserted through the Finance Act, 2022, after the passing of order(s) by the Tribunal, and the matter was decided against Department by the Tribunal while observing that there was no clarification in the law regarding the identity of the obligator---Notwithstanding subsequent introduction of the explanation-in-question, scope and applicability of the explanation was clear---Thus, the proposed questions were decided in favour of the respondents and against the applicant-department---Reference applications were dismissed.

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