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---General Clauses Act (X of 1897), S. 24A---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 Company, being engaged in the manufacturing and sale of poultry feed, in order to monitor for successive periods of thirty days, extended back-to-back without reasons---Whether the repeated extensions of thirty days each under the S.175C of the Ordinance, 2001, without assigning reasons or disclosing material, can be sustained in law---Petitioner (Taxpayer/Company called into question the validity of consecutive orders contending that the authority could not be exercised arbitrarily or indefinitely, and that monitoring under such provision must necessarily be time-bound and justified by cogent reasons---Validity---Pertinently, S. 175C of the Ordinance, 2001 is pari material S.40B of the Sales Tax Act, 1990 ('the Act, 1990') in both language and purpose; and the doctrine of pari materia permits courts to interpret two provisions in harmony where they are couched in substantially similar terms, address the same issue and seek to achieve a common object---Section 175C of the Ordinance, 2001, in essence, replicates the scheme of S. 40B of the Act, 1990 by empowering the Board or Chief Commissioner to post officers of Inland Revenue at the business premises of a taxpayer to monitor production, supply of goods, rendering of services and stock position---Though the S. 175C of the Ordinance, 2001 does not, in express terms, prescribe a limitation of time for such postings, however, the law does not recognize unfettered and unbridled discretion and monitoring cannot be indefinite; rather must be for a defined period and for a lawful purpose contemplated by the statute---Once that purpose is achieved or exhausted, the monitoring must come to an end, and the authority cannot be left at large to extend the period in its unfettered discretion---All statutory powers must be exercised within lawful limits, which must be exercised for a reasonable and time-bound period to achieve the legitimate object of the statute---In the present case, while the initial orders (of 03.05.2025 and 13.05.2025) can be regarded as valid exercises of power under S. 175C of the Ordinance, 2001, the subsequent orders (dated 02.06.2025 and 29.06.2025) extending the posting of at the petitioner's hatcheries suffered from a conspicuous absence of reasons---No material had been disclosed as to why continued monitoring was necessary, what object remained unachieved, or what irregularity justified prolongation---The extensions, being unreasoned and indefinite in effect, were arbitrary and fell foul of S. 24A of the General Clauses Act, 1897, which obliged every public authority to act reasonably, fairly and in accordance with the purpose of law---Such action also fail the test of proportionality embodied in the constitutional guarantees of due process and freedom of trade---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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