COMMISSIONER INLAND REVENUE, ZONE-III RTO, RAWALPINDI vs SARWAQ TRADERS, RAWALPINDI S

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COMMISSIONER INLAND REVENUE, ZONE-III RTO, RAWALPINDI VS SARWAQ TRADERS, RAWALPINDI S. 45B(2), first and second provisos---Constitution of Pakistan, Art. 188---Review petition---Appeal to the Commissioner Inland Revenue (Appeals)---Timeframe provided under first and second provisos to section 45B(2) of the Sales Tax Act, 1990 ("Act")---Whether the first and second provisos were mandatory or directory provisions?---By way of judgment under review the Supreme Court held that the provisos were mandatory provisions and any order passed by the Commissioner (Appeals) under section 45B(2) beyond the maximum period of 180 days was an "invalid decision."---[Per Syed Mansoor Ali Shah, J. (Majority view): First and second provisos to section 45(B)(2) of the Sales Tax Act, 1990 ("Act") are directory provisions and lapse of the statutory timeframe will not affect the proceedings before the Commissioner (Appeals) who shall conclude the appeal in accordance with law by deciding the appeal on its merits---First and second provisos to section 45B(2) of the Act are directory provisions and do not deprive the taxpayer of his right to appeal or deny the tax department the right to adjudicate the matter on merits by virtue of lapse of the maximum statutory timeframe---Inspite of the first and second provisos to section 45(B)(2) being directory provisions, the Commissioner (Appeals) must make reasonable effort to decide the appeal of the taxpayer within the maximum statutory timeframe, subject to the third proviso to section 45B(2)---In case the taxpayer unduly delays the prosecution of the appeal without sufficient cause, the Commissioner (Appeals) is well within its power to proceed ex-parte against the taxpayer---Commissioner (Appeals) must also give reasons if the appeal is not decided within the statutory timeframe under the proviso to section 45(B)(2), so that the legislative aspiration to achieve effective and efficient tax governance is also realized even though such a timeframe is only directory in nature]---[Per Ayesha A. Malik, J. (Minority view): Primary ground for filing the present review was the argument that the adjournments taken by respondent/taxpayer during the proceedings before the Commissioner (Appeals) should have been considered in terms of Section 45-B(2), third proviso of the Sales Tax Act, 1990 (Act)---Record showed that the dates of adjournment were not considered while calculating the time period under Section 45B of the Act by the Appellate Tribunal Inland Revenue, Islamabad Bench (Tribunal) or the High Court---Given that present matter was a factual matter, it was necessary for the Tribunal to consider the dates of adjournments for the purposes of calculating the delay in terms of Section 45-B of the Act---Under the circumstances, review was allowed, the judgment under review was recalled; and accordingly, the orders of the High Court and the Tribunal were set aside; and the case was remanded to the Tribunal with the directions that the appeal of the taxpayer shall be deemed to be pending and the Tribunal shall decide afresh the issue of the timeframe as prescribed in Section 45-B of the Act with reference to the adjournments sought---[Per Syed Hasan Azhar Rizvi, J. (as Referee Judge) (Majority view): First and second provisos to section 45(B)(2) of the Act should be treated as directory provisions---This interpretation effectively safeguards the tax-payer's constitutional rights while promoting efficient and fair tax governance---It serves the public interest by preventing procedural timelines from being used against tax-payers in a way that would compromise fairness and justice in the appellate system---Provisions must not be interpreted in a way that limits or undermines fundamental rights---Strict enforcement of statutory timelines for tax-payer appeals could jeopardize these rights and potentially deny tax-payers a fair opportunity to seek redressal---Therefore, declaring first and second provisos to section 45(B)(2) of the Act as directory is crucial to maintain due process and uphold the constitutional principles of justice.

COMMISSIONER INLAND REVENUE, ZONE-III RTO, RAWALPINDI vs SARWAQ TRADERS, RAWALPINDI S — 2025 SCMR 341 SUPREME-COURT

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