GULZAR AFZAAL, FAISALABAD vs COMMISSIONER INLAND REVENUE, RTO, FAISALABAD Ss

Fields are extracted from the reported citation and judgment text. Where a detail is not stated in the record, it is not shown.

GULZAR AFZAAL, FAISALABAD VS COMMISSIONER INLAND REVENUE, RTO, FAISALABAD Ss. 11 & 21(2)---Sales Tax Rules, 2006, R. 12---Constitution of Pakistan, Art. 18---Sales tax registration of registered person---Suspension / blacklisting---Conditionalties, non-observance of ---Effect---Adjudication under S. 11 of the Sales Tax Act, 1990, having culminated---Continued suspension---Scope---Freedom of trade, business, or profession---Scope---Under S. 21(2) of the Sales Tax Act, 1990 ('the Act, 1990'), the legislature has laid down specific conditionalties before such a severe action/order of suspension can be taken---It is not the intention of the law to confer arbitrary powers upon the tax authorities---The invoking of S. 21(2) of the Act, 1990 must be supported by objective facts and proper reasoning---In the present case, the department failed to substantiate how the conditionalties mentioned in S. 21(2) were fulfilled prior to the suspension---There was no record of any speaking order or show-cause notice giving the appellant an adequate opportunity to respond or explain their position prior to passing the order of blacklisting---Such action on the part of the department was contrary to the established principles of natural justice---Furthermore, after blacklisting of the appellant, the assessing officer initiated proceedings under S.11 of the Act, 1990 which resulted into Order-in-Original (ONO )where the matter was fully adjudicated upon for the relevant tax period---Therefore, it is evident that the suspension of the appellant triggered proceedings under S.11 of the Act, 1990, were which exhausted and adjudicated---Suspension or blacklisting is not meant to be a permanent disability---It is a temporary measure subject to review and compliance with legal and procedural safeguards---The Act, 1990 does not provide for indefinite suspension/blacklisting, especially in the absence of any live dispute, fresh cause of action or persisting default---Moreover, Art.18 of the Constitution guarantees the freedom of trade, business, or profession to every citizen---The continued suspension of the appellant offend the spirit of Art. 18 and deprives the appellant of its Constitutional protection---The right to carry on lawful business cannot be curtailed without cogent reason, and any such restriction must stand the test of legality, proportionality and procedural fairness---Since suspension of its sales tax registration, the appellant (registered person) was unable to conduct business---Pertinently, the department had taken no step to review the suspension status of the appellant even after Order-in-Original had been passed---The absence of any further proceedings or inquiry to justify the continued suspension clearly showed that the department's stance was unsustainable---Mere suspicion or past audit observations could not justify indefinite denial of business---Thus, the punitive measures such as suspension or blacklisting must be rooted in objective facts, should not be excessive in duration and must be subjected to periodic review---There was no indication on record that the department had ever reviewed the status of suspension or issued a fresh notice to justify its continuation---Said lack of action confirmed that the suspension had lapsed into an indefinite punishment without legal mandate---Even otherwise, after the appellant's entire case was adjudicated under S. 11 of the Act, 1990, there remained no reason for suspension status of the registered person as there was no further pending liability, no prosecution initiated, nor was there any show-cause under progress---In such a scenario, the continued presence of the appellant's name in the suspension is highly unjustified---Continuation of suspension of the appellant, despite Order-in-Original being passed under S. 11 and in the absence of any fresh material or cause, was not tenable under the law---Such action amounted to denial of lawful business opportunity, infringed Art. 18 of the Constitution, and lacked support of S. 21(2) of the Act, 1990---Appellate Tribunal Inland Revenue set-aside the impugned suspension order, and the department was directed to restore the appellant's status---Appeal, filed by the Registered Person (AoP), was allowed accordingly.

GULZAR AFZAAL, FAISALABAD vs COMMISSIONER INLAND REVENUE, RTO, FAISALABAD Ss — 2026 PTD 690 INLAND REVENUE APPELLATE TRIBUNAL OF PAKISTAN

Case information

Judgment text as reported

Other judgments reported in 2026 PTD