MUHAMMAD ZUBAIR vs FEDERATION OF PAKISTAN Ss — 2025 PTD 274 LAHORE-HIGH-COURT-LAHORE

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

MUHAMMAD ZUBAIR VS FEDERATION OF PAKISTAN Ss. 131(5) & 131(10)---Grant of stay by Appellate Tribunal Inland Revenue ('Tribunal')---Imposition of condition---Discretion of the High Court / Tribunal---Scope---Tribunal though granted the petitioners / taxpayers stay against recovery of impugned tax demand for a specific period (from 15 to 30 days) yet subject to payment of certain percentage (5%, 10%, 25%) out of relevant total tax demand within five days or so ('impugned conditions')---Taxpayers assailed impugned conditions before the High Court---Plea of the petitioner / taxpayer was that the Appellate Tribunal Inland Revenue ('the Tribunal'), being first independent forum, must state reasons for imposing any condition qua any injunctive order passed by it or else the object and purpose of appeal would stand negated as S. 131(5) of the Income Tax Ordinance, 2001, ('the Ordinance 2001') did not visualize any condition for grant of stay and the discretion exercised by the Appellate Tribunal for imposed conditions was unlawful---Plea of the respondents/Department was that the Tribunal was possessed of discretionary power to stay recovery of any tax due by virtue of any order being assailed, subject to restrictions or limitations and that the impugned conditions depicted only reasonable exercise of judicial discretion---Validity---Appellate Tribunal is the first extra-departmental/independent forum for deciding the disputes vis-à-vis tax liability under the Ordinance 2001--- Historically, in acknowledgment of the principle of unrestricted access to justice, the High Courts had been granting stay against recovery of any tax demanded by the concerned revenue authorities till decision of appeal before at least one extra-departmental forum---The federal legislature had by and large manifestly adhered to the same principle while enacting subsection (5) of S.131 of the Ordinance, 2001---Under the provisions of subsection (5) of S. 131 of the Ordinance, 2001, authority of the Appellate Tribunal to grant stay, during pendency of appeal before it, was not conditioned by the requirement of deposit or payment of certain amount of tax determined by the forum below---In that way, the said provisions are quite distinct /distinguishable from subsection (10) of S. 133 of the Ordinance, 2001 which restricts or limits the authority of the High Court to stay recovery of tax, while a Tax Reference is pending, subject to deposit with the assessing authority of not less than 30% of the tax determined by the Appellate Tribunal---No doubt, in the scheme of S. 131 of the Ordinance, 2001, that authority of the Appellate Tribunal to stay recovery of tax, during pendency of an appeal is discretionary, however, to ensure unrestricted access to justice and fair determination of tax liability before the first extra-departmental/independent forum, such discretion ordinarily should be exercised to stay recovery of the tax impugned except for the tax liability admitted or not challenged by the appellant or the one determined on the basis of binding precedent of the High Court or the Supreme Court on any issue raised in the appeal---Impugned conditions in the orders assailed in these petitions had been imposed by the Appellate Tribunal in a slipshod manner that hardly showed application of mind on part of the Appellate Tribunal, therefore, the same were manifestly arbitrary and of no legal effect---High Court set-aside the impugned conditions qua deposit of certain amounts of tax while directing the Appellate Tribunal Inland Revenue to decide appeals of the petitioners within 30 days from the receipt of certified copy of the judgment---Constitutional petitions, filed by taxpayers, were allowed accordingly.

MUHAMMAD ZUBAIR vs FEDERATION OF PAKISTAN Ss — 2025 PTD 274 LAHORE-HIGH-COURT-LAHORE

Case information

Judgment text as reported

Other judgments reported in 2025 PTD