COMMISSIONER INLAND REVENUE, LAHORE vs COCA COLA PAKISTAN LIMITED, LAHORE — 2026 PTD 29 SUPREME-COURT

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COMMISSIONER INLAND REVENUE, LAHORE VS COCA COLA PAKISTAN LIMITED, LAHORE. Ss. 153(1), 161 & 163---Advance payment of tax by way of deduction or collection---Failure to comply---Consequences---Person in default---Personal liability for undeducted or uncollected tax---Scope---Section 153, like a number of other provisions in the Income Tax Ordinance, 2001, requires for the advance payment of tax by way of deduction---Other provisions provide for advance payment of tax by way of collection---If the person who is required to so deduct or collect fails to do so then, among other consequences, Section 161 is activated---The section makes the person in default personally liable for the payment of the amount of tax that was not deducted or collected and the recovery provisions of the Ordinance become applicable, per Section 163, "as if it were tax due under an assessment order", thus, a failure to abide by the duty to deduct or collect advance tax has severe penal consequences and he becomes, in essence, a taxpayer in default---Section 153, when viewed from the perspective of the person who is said to be under a duty to collect or deduct the advance payment of tax, may be regarded as akin or analogous to a charging provision---This is so because of the severe penal consequences that can result from a failure to abide by the statutory duty---These advance payment provisions therefore have to be strictly construed---This need not be with the same rigidity and literalness with which a charging section, in terms of well settled tax jurisprudence, is interpreted---Nonetheless, such provisions cannot be regarded simply as recovery mechanisms and dealt with accordingly---The severe penal consequences for a person who defaults on a duty to deduct or collect, as the case may be, militate against any such approach---The interpretation must be tight and narrow.

COMMISSIONER INLAND REVENUE, LAHORE vs COCA COLA PAKISTAN LIMITED, LAHORE — 2026 PTD 29 SUPREME-COURT

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