COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD vs PAKISTAN LNG LIMITED — 2026 PTD 192 SUPREME-COURT

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COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD VS PAKISTAN LNG LIMITED. S. 140---Adverse order passed by the Commissioner Inland Department-Appeals---Recovery of tax from third parties holding money on behalf of the taxpayer---Timeframe---Immediate coercive recovery---Department's/Revenue's authority, excessive / autocratic exercise of---Effect---Expression "by the date"---Scope---Within a short span of time (of about eight and half hours), from the decision by the Commissioner Inland Revenue-Appeals and it being uploaded on the FBR's web portal, notice for immediate recovery from Bank was sought by the Department on the same date as the notice---Whether the Commissioner Inland Revenue could legitimately demand immediate payment on the precise date the notice was issued, according to Section 140 of the Income Tax Ordinance, 2001?---Held: Upon scrutinizing subsection (1) of Section 140, it becomes clear that the Commissioner, through written notice, may require any person holding money on behalf of a taxpayer to pay the specified amount "by the date" set out in the notice---The expression "by the date" conveys the notion of making a payment "on or before the date", which implies that the payment window should encompass a reasonable duration, ensuring that persons (garnishees) have sufficient time to fulfill their obligations, fairness in the proceedings, and to prevent any semblance of arbitrariness or capriciousness---Had the intention been different, the legislature could easily have employed the wording "on the date" set out in the notice, which would have allowed for an alignment of the notice date with the payment date---However, determining what constitutes a "reasonable time" will inevitably differ from one situation to another, so it is prudent not to impose a fixed timeframe---Thus, it is essential to leave this matter to the discretion of the recovery officer, who can assess the specific circumstances surrounding each case---Therefore, the notices issued under section 140 in the present cases were invalid and could not legally mandate immediate payment of tax from a garnishee who held money on behalf of the taxpayer (respondent)---Thus, the petitioner-Revenue remained unable to substantiate the validity of the notice under Section 140 of the Ordinance, 2001, consequently, no disturbance in the acceptance of the taxpayer's (respondent's) writ petitions and dismissal of the petitioner's (Revenue's) Intra-Court appeals were made out---Appeals, filed by Department, were dismissed.

COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD vs PAKISTAN LNG LIMITED — 2026 PTD 192 SUPREME-COURT

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