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)---Recovery of tax from third parties holding money on behalf of taxpayer---Conduct of Department---Immediate coercive recovery. Within a short span of time of about eight and half hours from the decision by Commissioner Inland Revenue-Appeals and uploading of order on FBR web portal, notice for immediate recovery from Bank was sought by Department. In both instances, there was no meaningful interval between appellate decision and initiation of coercive recovery, thereby depriving third party from whom money was to be recovered of adequate notice. The conduct of Commissioner effectively nullified the very purpose of serving notice, which the statute declares as a precondition to coercive action under Section 140 of Income Tax Ordinance, 2001. Tax recovery is not meant to be a "grab and go" process. Even coercive recovery measures must follow proper and fair procedure. Tax authorities are not penalizing agencies but institutions of the State required to facilitate compliance through clarity, transparency and procedural propriety. Legal certainty requires that taxpayers must be clearly informed not only about liability but also about when, how and on what basis recovery would be pursued. Section 140 provides protection against arbitrary enforcement by requiring setting of a payment date. The notices issued without providing a future date violated mandatory requirements of Section 140 of Income Tax Ordinance, 2001. Appeals filed by the Department were dismissed.

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