COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD vs PAKISTAN LNG LIMITED — 2026 SCMR 227 SUPREME-COURT

Case information

Citation: 2026 SCMR 227 SUPREME-COURT
Court: Supreme Court of Pakistan
Year: 2026
Reporter: SCMR
Parties: COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD vs PAKISTAN LNG LIMITED
Subject matter: Tax & Customs
Provisions referred to: S. 140---I; Income Tax Ordinance (XLIX of 2001); Income Tax Ordinance

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

Judgment text as reported

COMMISSIONER INLAND REVENUE (LEGAL), ISLAMABAD VS PAKISTAN LNG LIMITED. S.140---Income Tax Ordinance (XLIX of 2001)---Adverse order passed by the Department---Recovery of tax from third parties holding money on behalf of taxpayer---Timeframe---Immediate coercive recovery---Department's authority, excessive 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 its uploading on the FBR web portal, notice for immediate recovery from Bank was sought by the Department on the same date as the notice. Upon scrutinizing subsection (1) of Section 140 of the Income Tax Ordinance, 2001, 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 payment on or before the date, which implies that the payment window should encompass a reasonable duration ensuring that persons from whom recovery is sought have sufficient time to fulfill their obligations. Had the intention of legislature been different, it could have employed the wording "on the date" set out in the notice, which would have allowed immediate payment on the date of issuance. Determination of what constitutes a reasonable time depends upon the facts and circumstances of each case and cannot be fixed by imposing a rigid timeframe. The notices issued under Section 140 were invalid as they could not legally mandate immediate payment of tax from a garnishee who held money on behalf of the taxpayer. Appeals filed by the Department were dismissed.

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