ZUBAIR FEED INDUSTRIES (PRIVATE) LIMITED vs FEDERATION OF PAKISTAN through Chairman Federal Board of Revenue S

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ZUBAIR FEED INDUSTRIES (PRIVATE) LIMITED VS FEDERATION OF PAKISTAN through Chairman Federal Board of Revenue S. 175C---Sales Tax Act (VII of 1990), S. 40B---Posting of officers of Inland Revenue at the business premises---Back to back extension of such posting---Reasons for extension, absence of---Effect---Consecutive orders were issued under S. 175C of the Income Tax Ordinance, 2001 ('the Ordinance, 2001'), whereby officers of Inland Revenue had been posted at various business premises of the Petitioner (Manufacturer/Company) in order to monitor for successive periods of thirty days extended back-to-back without reasons---Respondents/Department, while placing reliance upon the judgment in case tilted "Kamalia Sugar Mills Ltd. v. Federation of Pakistan" reported as 2015 PTD 221 ('Kamalia Sugar Mills case'), contended that the action was within the lawful competence of the tax authorities since the act of monitoring was not adverse in nature, therefore, the principle enunciated in Kamalia Sugar Mills case governed the present case---Validity---The case law i.e., Kamalia Sugar Mills case, cited by the Respondents/Department , does not advance their case beyond the initial posting of officers---Kamalia Sugar Mills case /judgment expressly observed that in order to prevent arbitrary exercise, the posting order must stipulate a reasonable timeframe, and that any extension should be made known to the taxpayer---Although it is correct that the Board or the Chief Commissioner is not under a statutory obligation to issue ashow-cause notice or to record detailed reasons while appointing officers at the business premises for monitoring, this cannot be construed as a license to grant successive extensions in a mechanical or indefinite manner---Every extension of monitoring must be supported by cogent justification, demonstrating the necessity for continued oversight---Even where the orders are time-bound, such as thirty days consecutively in the present case, the power to extend cannot be exercised in such a way that it results in perpetual monitoring under the guise of renewal---The law requires that such exercise of discretion must be reasonable, proportionate, and must culminate at a definite point in time---Therefore, to treat KamaliaSugar Mills case as an authority for approving back-to-back extensions without reasons would be to stretch the judgment beyond its ratio and to undermine its own cautionary observations---Thus, High Court set-aside office orders extending posting declaring the same to be without lawful authority while the initial posting orders stood spent by efflux of time---Constitutional Petition, filed by taxpayer/company , was partly allowed accordingly.

ZUBAIR FEED INDUSTRIES (PRIVATE) LIMITED vs FEDERATION OF PAKISTAN through Chairman Federal Board of Revenue S — 2026 PTD 126 ISLAMABAD

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