FAUJI CEMENT COMPANY LIMITED vs GOVERNMENT OF PUNJAB Ss — 2025 PTD 864 LAHORE-HIGH-COURT-LAHORE

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FAUJI CEMENT COMPANY LIMITED VS GOVERNMENT OF PUNJAB Ss. 52, 14 & 14a [as inserted through Punjab Finance act, 2017]---Constitution of Pakistan, arts. 4 & 10-a---Withholding agent---Show-Cause Notice issued under S. 52 of the Punjab Sales Tax on Services act, 2012---Stance of the petitioner-company was that since it was a withholding agent and not covered within the definition of a taxpayer, therefore, it should first be dealt with under the provisions of S. 14 of Punjab Sales Tax on Services act ('the act, 2012'), thus, the impugned show-cause notice was liable to be set-aside---Held, that in the present case, the authority had straightway invoked the provisions of S. 52(3) of act, 2012 before fulfilling the mandatory requirement of issuing a notice in terms of S.52(1) of the act, 2012---Moreover, relevant paragraph (No.3) of the impugned show-cause notice only mentioned that "various services were obtained which were taxable as per provisions of Second Schedule of the act, 2012 and scrutiny of the petitioner's taxpayer profile shows that it failed to clear its due tax liability" which was not a valid reason to bind the petitioner to deposit the due amounts of Punjab Sales Tax in lieu of the taxable services---Provisions of S. 14 of the act, 2012 as well as S. 14a of the act, 2012 clarify that subsection (2) of S. 14 of the act, 2012 discusses the powers of the authority in connection with a withholding agent whereas S. 14a(2) of the act, 2012 describes a special procedure for collection and payment of tax in respect of any service(s)---However, in the present case, without first meeting the mandatory requirements of said provisions, straightway notice under S. 52 of the act, 2012 had been issued to the petitioner---a taxpayer has certain rights while the Federal Board of Revenue functions under provisions of the fiscal laws prevailing in Pakistan---The concerned authority, while issuing the impugned show-cause notice, had ignored the principle of fair trial and due process as envisaged under art. 10-a of the Constitution---article 4 of the Constitution clearly states that it is an inalienable right of every citizen to be treated in accordance with law and no action detrimental to his/her life, liberty, reputation or property shall be taken except as per law---No public functionary/authority is allowed, under the Constitution, to act in a manner infringing upon fundamental rights or exceeding statutory limits---a statute should be interpreted according to its plain meaning and not as per the intent of the legislature, the statutory purpose or the legislative history---Thus, the notice under S.52 of the act, 2012 was not maintainable when clear provisions of S. 14 of the act, 2012 had been provided---Section 14 and S. 14a [which was inserted on 15.06.2017 through Punjab Finance act, 2017, to provide further clarification] were given under Chapter II (Scope of Tax) as such, these two sections, being special provisions, were to be first invoked by concerned authority because the same were main sections of the law/act, and not ancillary or auxiliary sections---But when compared to S. 52 of the act, 2012, it comes under Chapter VIII of the act (Offences and Penalties), which was not a direct provision to issue the impugned show-cause notice, thus, the same could not be straightaway invoked---Thus, stance of the petitioner had some legal force---High Court set-aside the impugned show-cause notice and remitted the matter to the Respondent /additional Commissioner, Punjab Revenue authority, Rawalpindi, who would consider it as a representation of the petitioner and decide the same, after providing proper hearing to all concerned including the petitioner, strictly as per relevant provisions of the act [specifically Ss. 14 & 14a], through a speaking order---Constitutional petition was allowed accordingly.

FAUJI CEMENT COMPANY LIMITED vs GOVERNMENT OF PUNJAB Ss — 2025 PTD 864 LAHORE-HIGH-COURT-LAHORE

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