ASSESSMENTASSESSMENT AUDIT & ADJUDICATION AUDIT & ADJUDICATION UNDER THE SALES TAX UNDER THE SALES TAX

ACTACTA presentation by:A presentation by:

Mr. Muhammad Mansha SukheraMr. Muhammad Mansha SukheraB.Com, DCMA, MBA, LLB, FCAB.Com, DCMA, MBA, LLB, FCA

Senior PartnerSenior PartnerRafaqat Mansha Mohsin Dossani Masoom & Rafaqat Mansha Mohsin Dossani Masoom & Co.Co.Chartered Accountants Chartered Accountants

• SALES TAX LAWSALES TAX LAW• ASSESSMENTASSESSMENT• AUDITAUDIT• ADJUDICATIONADJUDICATION

SALES TAX LAWSALES TAX LAW FISCAL STATUTES FISCAL STATUTES

CONSTITUTIONAL VALIDITYCONSTITUTIONAL VALIDITY

ENECTMENT/PROMALGATIONENECTMENT/PROMALGATION

HISTORYHISTORY

CONCEPT OF SALES TAXCONCEPT OF SALES TAX

STAGES OF ENFORCEMENTSTAGES OF ENFORCEMENT

FISCAL STATUTESFISCAL STATUTES MainMain

Sales Tax Act, 1990Sales Tax Act, 1990 Federal Excise Act, 2005Federal Excise Act, 2005 Customs Act, 1969Customs Act, 1969 Income Tax Ordinance, 2001Income Tax Ordinance, 2001

HelpingHelping Constitution of Pakistan, 1973Constitution of Pakistan, 1973 General Clauses Act, 1897General Clauses Act, 1897 Limitation Act, 1908Limitation Act, 1908 Rules of interpretationRules of interpretation Code of Civil/ Criminal procedures – selected provisions – Code of Civil/ Criminal procedures – selected provisions –

search, service of notice etc.search, service of notice etc. Precedents.Precedents.

CONSTITUTIONAL VALIDITYCONSTITUTIONAL VALIDITY

PreamblePreamble

Fundamental rights Art. 8 to 28Fundamental rights Art. 8 to 28

Legislation power Art. 77Legislation power Art. 77

Rule of law Art 4, 25, 2ARule of law Art 4, 25, 2A

Islamic Provision. Art. 227Islamic Provision. Art. 227

ENACTMENT/ PROMULGATIONENACTMENT/ PROMULGATION TAX LEGISLATION POWER. ART. 77TAX LEGISLATION POWER. ART. 77

“ “No tax shall be levied for the purposes of the Federation No tax shall be levied for the purposes of the Federation except by or under the authority of Actexcept by or under the authority of Act of Majlis-e- of Majlis-e-Shoora (Parliament).” Shoora (Parliament).”

Federal Legislative List Entry 49Federal Legislative List Entry 49 ““Taxes on the sales and purchases of goods imported, Taxes on the sales and purchases of goods imported,

exported, produced, manufactured or consumed.”exported, produced, manufactured or consumed.” Other taxes (Entry 43-50), 59 incidental or ancillary Other taxes (Entry 43-50), 59 incidental or ancillary

mattermatter

Legislation Power– Article 141Legislation Power– Article 141 Law for whole or part of Pakistan including extra territorial Law for whole or part of Pakistan including extra territorial

operation - Majlis-e-Shoora (Parliament operation - Majlis-e-Shoora (Parliament Law for Province or any its part –Provincial AssemblyLaw for Province or any its part –Provincial Assembly

ENACTMENT/ PROMULGATIONENACTMENT/ PROMULGATIONArticle 142Article 142Subject matter of Federal legislative and concurrent listSubject matter of Federal legislative and concurrent list

Matter in Federal legislative list- ParliamentMatter in Federal legislative list- Parliament Matter in Concurrent List- Parliament and Provincial Matter in Concurrent List- Parliament and Provincial

Assembly. Assembly. Matter not mentioned in both Lists- Provincial Matter not mentioned in both Lists- Provincial

AssemblyAssembly Federation area not included in any province and Federation area not included in any province and

matter not mention in the above lists- Parliament.matter not mention in the above lists- Parliament.

Tax to be levied on the basis of ability to pay.Tax to be levied on the basis of ability to pay.

Legislature prerogativesLegislature prerogatives quantum of taxquantum of tax Conditions subject to which tax is leviedConditions subject to which tax is levied Manner of assessment and recoveryManner of assessment and recovery

ENACTMENT/ PROMULGATIONENACTMENT/ PROMULGATION

Taxing statute may be declared unconstitutional ifTaxing statute may be declared unconstitutional if plainly discriminatoryplainly discriminatory No machinery for levy and assessmentNo machinery for levy and assessment Confiscatory- acquisition of property PLD 1997 SC 582=1997PTD Confiscatory- acquisition of property PLD 1997 SC 582=1997PTD

1555 SC1555 SC

Interpretation of entry in legislative listsInterpretation of entry in legislative lists. . Living and permanent document, wide construction not narrow, Living and permanent document, wide construction not narrow,

Harmonise construction, promote economic and social activities.Harmonise construction, promote economic and social activities. summary of items and no detail, power of legislation for summary of items and no detail, power of legislation for

associated, ancillary and related matter. 1999PTCL 645 (SC) associated, ancillary and related matter. 1999PTCL 645 (SC) =1999 PTD 1135 = 79 TAX 433, 1997PTD 1555 (SC)=1999 PTD 1135 = 79 TAX 433, 1997PTD 1555 (SC)

Delegation tax legislation powerDelegation tax legislation power No delegation of legislation power of enacting taxing statute and No delegation of legislation power of enacting taxing statute and

imposition of tax except exemption and procedure of imposition of tax except exemption and procedure of assessment and recovery. PLD 1977 Lahore 1327, assessment and recovery. PLD 1977 Lahore 1327, PTCL 99 CL 493 SCPTCL 99 CL 493 SC

HISTORYHISTORYWorld HistoryWorld History

Before 1Before 1StSt world war world war Excise tax was very old tax Excise tax was very old tax Excise tax was major source of Revenue in the European countriesExcise tax was major source of Revenue in the European countries Custom duties was the major source of revenue in State (USA)Custom duties was the major source of revenue in State (USA)

After 1st world warAfter 1st world war Modern multistage turnover taxes were developed during and after Modern multistage turnover taxes were developed during and after

11stst world war world war VAT began when France adopted in 1954VAT began when France adopted in 1954 Subsequently vat was taken up by other European countries.Subsequently vat was taken up by other European countries. Rate of tax 10 to 23 %Rate of tax 10 to 23 % In United state sales tax remain major source of revenue since 2In United state sales tax remain major source of revenue since 2ndnd

world warworld war In USA single stage taxes existed in more than 40 states and only 2 In USA single stage taxes existed in more than 40 states and only 2

states adopted multistage turnover taxes upto 1971states adopted multistage turnover taxes upto 1971

HISTORYHISTORY

IndoPak.IndoPak. Pre-partition- Pre-partition- Sales tax was Provincial subject under the Sales tax was Provincial subject under the

Government of India Act 1935Government of India Act 1935 After IndependenceAfter Independence Pakistan adapted Pakistan adapted

the Government of India Act 1935the Government of India Act 1935 Pakistan General sales tax 1948 enacted and enforce from Pakistan General sales tax 1948 enacted and enforce from

April 1, 1948April 1, 1948 Standard rate 6 pies per RupeeStandard rate 6 pies per Rupee Sales Tax Act 1951 enacted and enforce from July 1,1951.Sales Tax Act 1951 enacted and enforce from July 1,1951. rate 12.50%rate 12.50% Sales tax Act 1990 enacted and enforce from July 1, 1990- VatSales tax Act 1990 enacted and enforce from July 1, 1990- Vat

Historical ConstructionHistorical Construction What was the law beforeWhat was the law before what was the mischief and defects in the earlier lawwhat was the mischief and defects in the earlier law What is the new lawWhat is the new law What remedies has been provided in the new to suppress the What remedies has been provided in the new to suppress the

mischief in the old law.mischief in the old law.

HISTORYHISTORY

Other Canon of ConstructionOther Canon of Construction Cannon of literal constructionCannon of literal construction

Letter of law and not sprite of law Letter of law and not sprite of law Language plain no matter what ever consequenceLanguage plain no matter what ever consequence ambiguity or doubt in favour of subjectambiguity or doubt in favour of subject

Purposes interpretationPurposes interpretation Contextual interpretationContextual interpretation Golden interpretation – as a wholeGolden interpretation – as a whole Harmonized ConstructionHarmonized Construction Construction to save and not to destroy the LAWConstruction to save and not to destroy the LAW Construction agreeable to justice and reason. Construction agreeable to justice and reason.

CONCEPT CONCEPT

Direct vs.. Indirect taxDirect vs.. Indirect tax VAT (Value Added Tax)VAT (Value Added Tax) Multi-stage vs.. Single Stage TaxMulti-stage vs.. Single Stage Tax Consumer Tax.Consumer Tax. ExceptionsExceptions

Direct vs.. Indirect taxDirect vs.. Indirect tax That a direct tax is one which is demanded from That a direct tax is one which is demanded from

the very person, who it is intended or desired the very person, who it is intended or desired should pay it whereas indirect taxes are those, should pay it whereas indirect taxes are those, which are demanded from one person in the which are demanded from one person in the expectation and intention that he shall indemnify expectation and intention that he shall indemnify himself at the expenses of another, like custom himself at the expenses of another, like custom duties, excise taxes and sales tax, which are born duties, excise taxes and sales tax, which are born by the consumer. ((1997) 76 Tax 5(S.P), Elahi by the consumer. ((1997) 76 Tax 5(S.P), Elahi Cotton case, pg.678. Cotton case, pg.678.

Burden of tax (PTCL 2005 CL 754(S.C) Fecto Burden of tax (PTCL 2005 CL 754(S.C) Fecto Belarus case) purchaser vs.. venderBelarus case) purchaser vs.. vender

Component of Cost/Sales price – explicit or implicit.Component of Cost/Sales price – explicit or implicit.((

VAT (Value added tax)VAT (Value added tax) Mechanism of levy and crystallizing the liability by Mechanism of levy and crystallizing the liability by

allowing the adjustment of input tax provided in the allowing the adjustment of input tax provided in the provisions of sales tax Act 1990 is a provisions of sales tax Act 1990 is a VATVAT system. system.

In nutshell sales tax is payable on value additionIn nutshell sales tax is payable on value addition

Importer-manufacturer-distributor-retailer State tax Importer-manufacturer-distributor-retailer State tax collecting Agentscollecting Agents

purchase supply value ad.purchase supply value ad.Value -ex 100 150.0 50.0Value -ex 100 150.0 50.0Tax 15 22.5 7.5Tax 15 22.5 7.5Value –inc. 115 175.5 57.5Value –inc. 115 175.5 57.5

Sales tax is going in treasury of State on value addition Sales tax is going in treasury of State on value addition basis other than import.basis other than import.

Multi-stage taxMulti-stage tax

Sales tax levied and collected under the Sales Sales tax levied and collected under the Sales Tax Act 1990 on each stage of taxable supply Tax Act 1990 on each stage of taxable supply made till it reached to consumer or ultimate user.made till it reached to consumer or ultimate user.

Sales tax charged and collected under the Sales Sales tax charged and collected under the Sales Tax Act 1951 was ONE POINT LEVY usually called Tax Act 1951 was ONE POINT LEVY usually called single stage tax.single stage tax.

Illustration as follows:Illustration as follows:

Purchases Supplies Val. Addition

Tax on Val. Addition

Tax Rate %

RP 1 IMPORT STAGE 15.0 Price ex 100.0 150.0 50.0 7.5 15%Tax 15.0 22.5 7.5 Price Incl. 115.0 172.5 57.5

MANUFACTURING STAGE RP 2 Melting ingot Price ex 150.0 250.0 100.0 15.0

Tax 22.5 37.5 15.0 Price Incl. 172.5 287.5 115.0

RP 3 Part making Price ex 250.0 325.0 75.0 11.3 Tax 37.5 48.8 11.3 Price Incl. 287.5 373.8 86.3

RP 4 Bicycle mfg. Price ex 325.0 450.0 125.0 18.8 Tax 48.8 67.5 18.8 Price Incl. 373.8 517.5 143.8

RP 5 DICTRIBUTOR/ DEALERPrice ex 450.0 600.0 150.0 22.5 Tax 67.5 90.0 22.5 Price Incl. 517.5 690.0 172.5

RP 6 RETAILERPrice ex 600.0 800.0 200.0 30.0 Tax 90.0 120.0 30.0 Price Incl. 690.0 920.0 230.0

386.3 120.0 Price exclusive of aggregate s tax 534S tax % in ultimate price charged to customer if no VAT 72%

Consumer taxConsumer tax

Sales tax is a tax on consumption because the Sales tax is a tax on consumption because the incident of tax charged under section 3 has to incident of tax charged under section 3 has to pass on the consumer ultimately.pass on the consumer ultimately.

The provision regarding input as well as out put The provision regarding input as well as out put as defined in the definition clause of the Act read as defined in the definition clause of the Act read with section 7and 8 thereof are on the modalities with section 7and 8 thereof are on the modalities prescribed to protect interest of the exchequer prescribed to protect interest of the exchequer against any pilferage, evasion or fraud.against any pilferage, evasion or fraud.

Every maker of a taxable supply is an agent of Every maker of a taxable supply is an agent of the State to receive the amount on its behalf and the State to receive the amount on its behalf and then pass it on to the next supplier till finally the then pass it on to the next supplier till finally the consumer bear the burden.consumer bear the burden.

PTCL 2002 CL 115 (LHC) Mayfair Spinning Mill PTCL 2002 CL 115 (LHC) Mayfair Spinning Mill Case.Case.

ExceptionsExceptions

Taxable supplies specified in the Third Taxable supplies specified in the Third schedule. S.3(2a), 21 items, juices. Ice schedule. S.3(2a), 21 items, juices. Ice cream, beverages, syrups, cigarettes, cream, beverages, syrups, cigarettes, toilet soap, biscuits, tissue paper etc.toilet soap, biscuits, tissue paper etc.

Special procedure for scope and Special procedure for scope and payment of tax S.71payment of tax S.71

Disallowing Input S. 7, 8, 8B and 73.Disallowing Input S. 7, 8, 8B and 73.

STAGES OF ENFORCEMENTSTAGES OF ENFORCEMENT

Charging / Imposition of TaxCharging / Imposition of Tax

AssessmentAssessment

Collection / RecoveryCollection / Recovery

Charging / Imposition of taxCharging / Imposition of tax

Subject matter – persons, goods, event, Subject matter – persons, goods, event, transitions, object – value or volume etc.transitions, object – value or volume etc.

Rate of tax – single rate, different rates, Rate of tax – single rate, different rates, range of rates.range of rates.

Period – month, quarter, years etc.Period – month, quarter, years etc.

Timing – time of delivery, accrual, receipt, Timing – time of delivery, accrual, receipt, clearing, deeming, agreement etc.clearing, deeming, agreement etc.

Construction of charging sectionConstruction of charging section Strict construction – strictly construed in favour the subject and Strict construction – strictly construed in favour the subject and

against the State.against the State. Words of law vs. Import of provision. “We may here observe that Words of law vs. Import of provision. “We may here observe that

the taxing statue the courts must look to the words of the statue the taxing statue the courts must look to the words of the statue and interpret it in the light of what is clearly expressed. It cannot and interpret it in the light of what is clearly expressed. It cannot imply anything which is not expressed, it cannot import provisions imply anything which is not expressed, it cannot import provisions in the statue so as to support assumed deficiency” (1975) 31 Tax in the statue so as to support assumed deficiency” (1975) 31 Tax 78 (SC) Hirjna & Co case.78 (SC) Hirjna & Co case.

Letter of law vs.. Spirit of law. Letter of law vs.. Spirit of law.

“ “ In determining whether or not a particular matter comes within a In determining whether or not a particular matter comes within a taxing statute it is only the letter of law be looked into. There is taxing statute it is only the letter of law be looked into. There is ample authority for the proposition that in a fiscal case, form is of ample authority for the proposition that in a fiscal case, form is of primary importance, the principle being that if the person sought primary importance, the principle being that if the person sought to be taxed comes within the letter of law, he must be taxed, to be taxed comes within the letter of law, he must be taxed, however great a hardship may thereby be involved but on the however great a hardship may thereby be involved but on the other hand if the Crown cannot bring the subject within the letter other hand if the Crown cannot bring the subject within the letter of law he is free, however, apparent may be that his case comes of law he is free, however, apparent may be that his case comes within what might be called the spirit of law.” (1974) 29 TAX 188 within what might be called the spirit of law.” (1974) 29 TAX 188 (SC) Mst. Wazirunissa Begum case.(SC) Mst. Wazirunissa Begum case.

Construction of charging sectionConstruction of charging section Benefit of doubt, ambiguity, alternative or several Benefit of doubt, ambiguity, alternative or several

interpretation should be given the taxpayer.interpretation should be given the taxpayer.

“ “ The cardinal principle of interpretation of a fiscal statue seem The cardinal principle of interpretation of a fiscal statue seem to be that all charge upon the subject are to be imposed by to be that all charge upon the subject are to be imposed by clear and unambiguous words. There is no room for any clear and unambiguous words. There is no room for any intendment nor there is any equity or presumption as to a tax. intendment nor there is any equity or presumption as to a tax. A fiscal provision of a statue is to be construed liberally in A fiscal provision of a statue is to be construed liberally in favour of the taxpayer and in case of any substantial doubt, favour of the taxpayer and in case of any substantial doubt, same is to be resolved in favour of the citizen.” (1992) 66 TAX same is to be resolved in favour of the citizen.” (1992) 66 TAX 246 (SC) Mehran Associates case, (1996) 74 TAX 81 (SC) B.P 246 (SC) Mehran Associates case, (1996) 74 TAX 81 (SC) B.P Biscuit case. Biscuit case.

“ “ all charge upon the subject must be imposed by clear and all charge upon the subject must be imposed by clear and unambiguous language because in some degree they operate unambiguous language because in some degree they operate as penalties; the subject is not to be taxed unless the language as penalties; the subject is not to be taxed unless the language of the statute clearly imposes the obligation and language of the statute clearly imposes the obligation and language must not be strained in order to tax a transaction, which had must not be strained in order to tax a transaction, which had the legislature thought of , it would have covered by the legislature thought of , it would have covered by appropriate words, B. P Biscuit case appropriate words, B. P Biscuit case

Strict construction rulesStrict construction rules Property right effected.Property right effected.

Imposition of tax deprive of the subject from their Imposition of tax deprive of the subject from their property rights protected and guaranteed by the property rights protected and guaranteed by the Constitution- Art. 24Constitution- Art. 24

Tax is a compulsory execution of money from the Tax is a compulsory execution of money from the subjectsubject

Tax is a penaltyTax is a penalty

Burden of proof – Initial burden is on the Authority to Burden of proof – Initial burden is on the Authority to prove that the person falls within the ambit of prove that the person falls within the ambit of charging section, once it is discharged the onus is charging section, once it is discharged the onus is shifted on the person to prove that he is entitled to shifted on the person to prove that he is entitled to exemption .exemption .

Strict construction rulesStrict construction rules

Level of compliance – charging sections are Level of compliance – charging sections are mandatory in nature and required to comply mandatory in nature and required to comply completely.completely.

Benefit of doubt, ambiguity, two or several Benefit of doubt, ambiguity, two or several interpretation of charging section is to be given to interpretation of charging section is to be given to the citizens.the citizens.

Exemption provision are opponent to charging Exemption provision are opponent to charging provision and are construed liberally in favour of the provision and are construed liberally in favour of the State and against the subject because their burden State and against the subject because their burden of tax is to be borne by the other citizen paying tax.of tax is to be borne by the other citizen paying tax.

Charging vs. ExemptionCharging vs. Exemption Exemption provision are opponent of charging Exemption provision are opponent of charging

provision.provision.

Exemption provision are liberally construed in favour Exemption provision are liberally construed in favour of the State and against the subject because the of the State and against the subject because the burden of tax is to be borne by other member of the burden of tax is to be borne by other member of the State.State.

Burden is on the person claiming exemption to prove Burden is on the person claiming exemption to prove that he falls within the exemption provision and fulfils that he falls within the exemption provision and fulfils the exemption requirements and conditions.the exemption requirements and conditions.

Benefit of doubt, ambiguity, or alternative Benefit of doubt, ambiguity, or alternative interpretation of exemption provision is to be given to interpretation of exemption provision is to be given to the State except claimant of exemption is State or the State except claimant of exemption is State or state divisions, charitable institutions, or meant for state divisions, charitable institutions, or meant for economic development.economic development.

AssessmentAssessment Assessment stage of a fiscal statue is a part of machinery Assessment stage of a fiscal statue is a part of machinery

provision and procedural in nature dealing with determination provision and procedural in nature dealing with determination of tax liability of the taxpayer as well as value of the subject of tax liability of the taxpayer as well as value of the subject matter and all other proceeding and steps involved and matter and all other proceeding and steps involved and culminate into assessment order.culminate into assessment order.

Component of assessmentComponent of assessment Registration provisionRegistration provision Filing of ReturnsFiling of Returns AuditAudit Assessment proceedings – SCN – Reply – submission – proofs.Assessment proceedings – SCN – Reply – submission – proofs. Assessment order.Assessment order. Revision/ review, appeal effectRevision/ review, appeal effect

Cannon of construction of assessment provisions –Liberal Cannon of construction of assessment provisions –Liberal construction in favour of the State and against the subject to construction in favour of the State and against the subject to crystallize and effect the recovery. (2002) 86 TAX 138 (KHC) crystallize and effect the recovery. (2002) 86 TAX 138 (KHC) Deans Associates case. 2002 PTD 2112 LHC), PLD 1961 SC Deans Associates case. 2002 PTD 2112 LHC), PLD 1961 SC 119, PTCL 1990 CL 386 119, PTCL 1990 CL 386

Original vs.. revised assessment / assessment vs.. re-Original vs.. revised assessment / assessment vs.. re-assessment.assessment.

Recovery Recovery Recovery and collection provision of the fiscal statue are Recovery and collection provision of the fiscal statue are

also part of machinery provision and are construed in the also part of machinery provision and are construed in the same manner as assessment provision in order to make the same manner as assessment provision in order to make the recovery of tax efficient and effective – Liberal construction recovery of tax efficient and effective – Liberal construction – in favour of the state and against the subject.– in favour of the state and against the subject.

Mode of Recovery and collection of taxMode of Recovery and collection of tax

Pre- assessment / adjudicationPre- assessment / adjudication Advance payment of taxAdvance payment of tax Withholding or collection of tax at sourceWithholding or collection of tax at source Payment with returnPayment with return

Post assessment / adjudicationPost assessment / adjudication Demand NoticeDemand Notice Deduction or adjustment from refund or money of the Deduction or adjustment from refund or money of the

taxpayer in the control of income, custom, excise taxpayer in the control of income, custom, excise authority authority

Recovery Recovery By notice from the person holding money of the taxpayerBy notice from the person holding money of the taxpayer By stopping removal of good from business premises.By stopping removal of good from business premises. By notice to any person to stop clearance of imported or By notice to any person to stop clearance of imported or

manufactured goods or attachment of bank accounts.manufactured goods or attachment of bank accounts. Seal of business premisesSeal of business premises Attach and sell or sell without attachment movable or Attach and sell or sell without attachment movable or

immovable propertyimmovable property Attach and sell movable and immovable property of guarantor Attach and sell movable and immovable property of guarantor

where such guarantor has failed to make the payment of tax where such guarantor has failed to make the payment of tax under guarantee, bond or instrument.under guarantee, bond or instrument.

Write off of arrearsWrite off of arrears by the Board or authorised officer by the Board by the Board or authorised officer by the Board as prescribed. S. 48(1A)as prescribed. S. 48(1A)

Sales tax officer has the Sales tax officer has the power of Civil Courtpower of Civil Court for recovery of tax . S. for recovery of tax . S. 48(2)48(2)

Section 48 – Sales Tax Rules, 2006, Cheaper XI Section 48 – Sales Tax Rules, 2006, Cheaper XI

ASSESSMENTASSESSMENT

DEFINITIONDEFINITION

KINDS/CLASIFICATIONKINDS/CLASIFICATION

SCOPE & PROCEEDINGSSCOPE & PROCEEDINGS

ASSESSMENT ORDER/ EFFECTSASSESSMENT ORDER/ EFFECTS

Definition /meaningDefinition /meaning Statutory Statutory

The expression “ Assessment” has not been defined in the The expression “ Assessment” has not been defined in the Sales Tax Act 1990. However, the word assessment was Sales Tax Act 1990. However, the word assessment was defined in the repealed Income tax Ordinance 1979 as “ defined in the repealed Income tax Ordinance 1979 as “ Assessment includes re-assessment and additional Assessment includes re-assessment and additional assessment and the cognate expression shall be construed assessment and the cognate expression shall be construed accordingly.” S. 2(7)accordingly.” S. 2(7)

Dictionary meaning:Dictionary meaning: Black law dictionary, seventh edition, page 111Black law dictionary, seventh edition, page 111

““Determination of the rate or amount of something, Determination of the rate or amount of something, such as a tax or damages (assessment of losses such as a tax or damages (assessment of losses covered by insurance). 2) Imposition of something, covered by insurance). 2) Imposition of something, such as tax or fine, according to as established rate; such as tax or fine, according to as established rate; the tax or fine so imposed.the tax or fine so imposed.

Definition / meaningDefinition / meaning

Longman’s dictionary of contemporary English, Longman’s dictionary of contemporary English, New edition, page 64New edition, page 64

“ “ The act of assessing; the value or amount at which The act of assessing; the value or amount at which something is calculated.” something is calculated.”

Excellent Legal Words and Phrases by Mian Excellent Legal Words and Phrases by Mian Muhibullah Kakakhel, volume 1, page 557 & Muhibullah Kakakhel, volume 1, page 557 & 559559

“ “ Assessment” in relation to taxation or revenue Assessment” in relation to taxation or revenue means the process of ascertaining or adjusting ; means the process of ascertaining or adjusting ; determining the share of a tax or duty to be paid by determining the share of a tax or duty to be paid by the person or apportioning the same among different the person or apportioning the same among different taxable persons.”taxable persons.”

Definition /meaningDefinition /meaning Judicial Meaning:Judicial Meaning:

1992 PTD 513 (HC) ref. Muhammad Amjad vs.. The 1992 PTD 513 (HC) ref. Muhammad Amjad vs.. The Commissioner of Income tax.Commissioner of Income tax.

“ “ The word ‘Assessment’ is uses in the statute as The word ‘Assessment’ is uses in the statute as meaning sometime, the computation of Income, meaning sometime, the computation of Income, sometime the determination of the amount of tax sometime the determination of the amount of tax payable, sometime the whole procedure laid down in the payable, sometime the whole procedure laid down in the statue for imposing liability on the taxpayer. The word statue for imposing liability on the taxpayer. The word assessment must be understood in each section of the assessment must be understood in each section of the statute with reference to the context in which it is used; statute with reference to the context in which it is used; in some sections it has a restricted meaning and is used in some sections it has a restricted meaning and is used as distinct from reassessment. The method prescribed as distinct from reassessment. The method prescribed by the statute for making an assessment of tax, using by the statute for making an assessment of tax, using the word assessment in its most comprehensive sense the word assessment in its most comprehensive sense as including the whole procedure for imposing liability as including the whole procedure for imposing liability upon the taxpayer consist of the following steps:upon the taxpayer consist of the following steps:

Definition /meaningDefinition /meaning In the first place, taxable income of the assessee has to be In the first place, taxable income of the assessee has to be

computedcomputed

In the next place, the sum payable by him on the basis of such In the next place, the sum payable by him on the basis of such computation has to be determined.computation has to be determined.

Finally , a notice of demand in the prescribed form specifying Finally , a notice of demand in the prescribed form specifying the sum so payable has to be served upon the assessee. (pg the sum so payable has to be served upon the assessee. (pg 518) 518)

PLD 1989 Lah. 121, Punjab Cables vs.. G.O.PPLD 1989 Lah. 121, Punjab Cables vs.. G.O.P

The word assessment in relation to taxation or Revenue means the The word assessment in relation to taxation or Revenue means the process of ascertaining, adjusting, determining the share of a tax process of ascertaining, adjusting, determining the share of a tax or duty to be paid by a person or apportioning the same among or duty to be paid by a person or apportioning the same among different taxable persons. Further, that assessment in relation to different taxable persons. Further, that assessment in relation to taxation includes all steps necessary which are taken in the taxation includes all steps necessary which are taken in the legitimate exercise of power to tax.” 2002 PTD 750(LHC)legitimate exercise of power to tax.” 2002 PTD 750(LHC)

Kinds / classificationKinds / classification Assessment concepts- Assessment & Re-assessment, Assessment concepts- Assessment & Re-assessment,

Original & Revised assessment, Deemed assessment, Original & Revised assessment, Deemed assessment, Agreed assessment, etc.Agreed assessment, etc.

Original assessment kinds.Original assessment kinds.

Self assessmentSelf assessment Provisional assessmentProvisional assessment Assessment on the basis of returnAssessment on the basis of return Normal assessmentNormal assessment Best judgement assessment/ Ex-parte assessment.Best judgement assessment/ Ex-parte assessment.

Revised assessment kinds.Revised assessment kinds. Review vs.. revisionReview vs.. revision ReviewReview Amended, Escape, Additional or Re-assessmentAmended, Escape, Additional or Re-assessment Rectified assessmentRectified assessment

Kinds / classificationKinds / classification

Revision Revision Revision of assessment by:Revision of assessment by:

BoardBoard CollectorCollector CommissionerCommissioner IACIAC Appellant AuthorityAppellant Authority CourtsCourts

Assessment ScopeAssessment Scope Sales Tax Act 1990.Sales Tax Act 1990.

Assessment of Tax. S.11Assessment of Tax. S.11

Recovery of tax not levied or short levied or erroneously Recovery of tax not levied or short levied or erroneously refunded. S. 36refunded. S. 36

Revision By:Revision By: Board or Collector S. 45ABoard or Collector S. 45A Collector of Sales tax Appeals, Collector of Sales tax Appeals, S.45BS.45B Appellate Tribunal S.46Appellate Tribunal S.46 High Court – Reference – S.47High Court – Reference – S.47 Board under ADR. S47ABoard under ADR. S47A

Correction of errors. S. 57 Correction of errors. S. 57

Assessment ScopeAssessment Scope Sales Tax Act 1951Sales Tax Act 1951

Assessment. S.10Assessment. S.10 Assessment on the basis of returnAssessment on the basis of return S. 10 (2)- Sales Tax Officer is satisfied about the S. 10 (2)- Sales Tax Officer is satisfied about the

correctness and completeness of the return.correctness and completeness of the return.

Normal assessment. S. 10(3)- Sales Tax Office is not Normal assessment. S. 10(3)- Sales Tax Office is not satisfied about the correctness or completeness of the satisfied about the correctness or completeness of the return and call for any information, particulars, books, return and call for any information, particulars, books, record, documents, etc. and determine the tax payablerecord, documents, etc. and determine the tax payable

Best judgement assessment. S. 10(4) – Returned not filed Best judgement assessment. S. 10(4) – Returned not filed or record, documents, books not produces- Exparte or record, documents, books not produces- Exparte judgement shall be made after giving an opportunity of judgement shall be made after giving an opportunity of being heard.being heard.

Assessment ScopeAssessment Scope Revision by Commissioner of Sales Tax. S. 16Revision by Commissioner of Sales Tax. S. 16

Tax not assessed – escape assessment- Reassessment S.28Tax not assessed – escape assessment- Reassessment S.28

Revision by Inspecting Assistant Commissioner to the Revision by Inspecting Assistant Commissioner to the assessment order of Sales tax officer. S.28Aassessment order of Sales tax officer. S.28A

Rectification of mistake. S30Rectification of mistake. S30

Appeal to Appellate Assistant Commissioner. S14Appeal to Appellate Assistant Commissioner. S14

Appeal to appellate Tribunal. S 15Appeal to appellate Tribunal. S 15

Reference to High Court. 17Reference to High Court. 17

Assessment of taxAssessment of tax Section 11(1)Section 11(1)

Non filer of ReturnNon filer of Return

Filer of return making short payment due to miscalculation.Filer of return making short payment due to miscalculation.

Show Cause Notice by Sales tax OfficerShow Cause Notice by Sales tax Officer

Order of assessment of tax, including imposition of penalty Order of assessment of tax, including imposition of penalty and default surcharge.and default surcharge.

Show Cause Notice and order of assessment abated if non Show Cause Notice and order of assessment abated if non filer file the return and pays the tax along with penalty and filer file the return and pays the tax along with penalty and default surcharge.default surcharge.

Section 11(2) – Invoking of:Section 11(2) – Invoking of:

Non payment due tax on supply made.Non payment due tax on supply made. Short payment of due tax on supply made.Short payment of due tax on supply made. Claim of inadmissible of input tax credit.Claim of inadmissible of input tax credit. Claim of inadmissible of Refund.Claim of inadmissible of Refund.

Reasons and groundsReasons and grounds of non paymentof non payment of short payment of short payment claim of in admissible input tax or refundclaim of in admissible input tax or refund

shall be other than non filing of return or short shall be other than non filing of return or short payment due to miscalculation.payment due to miscalculation.

Assessment of taxAssessment of tax

Assessment of taxAssessment of tax

Section 11(4)Section 11(4)

Assessment order shall determineAssessment order shall determine Sales tax actually payableSales tax actually payable Determination of amount of tax creditDetermination of amount of tax credit Determination of amount of refundDetermination of amount of refund Imposition of penaltyImposition of penalty Charge of default surchargeCharge of default surcharge

PrerequisitesPrerequisites Issuance of show cause Notice by the sales tax authority Issuance of show cause Notice by the sales tax authority

having jurisdiction over the case and competent u/s 45having jurisdiction over the case and competent u/s 45

Assessment of taxAssessment of tax

SCN specifying the reasons and ground on the basis of which it is SCN specifying the reasons and ground on the basis of which it is issued and intended to proceed.issued and intended to proceed.

Taking into consideration the representation of the taxpayerTaking into consideration the representation of the taxpayer

Providing opportunity of being heardProviding opportunity of being heard

Limitation of passing the order- 90 days from the issuance of scn Limitation of passing the order- 90 days from the issuance of scn or extended period of 90 days by the collector for the reasons to or extended period of 90 days by the collector for the reasons to be recorded in writing. be recorded in writing.

Determination of tax liabilityDetermination of tax liability Non obstante Non obstante Minimum tax liability by the non filer of return to be adjudicated Minimum tax liability by the non filer of return to be adjudicated

by the sales tax department not below the rank of assistant by the sales tax department not below the rank of assistant collector as prescribed by Board. S 11(5)collector as prescribed by Board. S 11(5)

Recovery of tax u/s 36Recovery of tax u/s 36 Section 36 (1) – Invoking of Section 36 (1) – Invoking of

Non levy of tax by the reason of collusionNon levy of tax by the reason of collusion

Non levy of tax by the reason of deliberate act.Non levy of tax by the reason of deliberate act.

Short levy of tax by the reason of collusion.Short levy of tax by the reason of collusion.

Short levy of tax by the reason of deliberate act.Short levy of tax by the reason of deliberate act.

Tax erroneously refunded by the reason of collusion.Tax erroneously refunded by the reason of collusion.

Tax erroneously refunded by the reason of deliberate Tax erroneously refunded by the reason of deliberate act.act.

Recovery of tax u/s 36Recovery of tax u/s 36

Service of show cause notice on the Service of show cause notice on the person liable to pay such amount of taxperson liable to pay such amount of tax

Service of notice within 5 years from the Service of notice within 5 years from the due date of payment u/s 6 and date of due date of payment u/s 6 and date of refund in case of refund.refund in case of refund.

Amount of tax required to be paid Amount of tax required to be paid should be specified in the show cause should be specified in the show cause notice.notice.

Recovery of tax u/s 36Recovery of tax u/s 36 Section 36(2) – Invoking of:Section 36(2) – Invoking of:

Non levy of tax by the reason of inadvertence.Non levy of tax by the reason of inadvertence.

Non levy of tax by the reason of error.Non levy of tax by the reason of error.

Non levy of tax by the reason of misconstruction.Non levy of tax by the reason of misconstruction.

Short levy of tax by the reason of inadvertence.Short levy of tax by the reason of inadvertence.

Short levy of tax by the reason of error.Short levy of tax by the reason of error.

Short levy of tax by the reason of misconstruction.Short levy of tax by the reason of misconstruction.

Erroneous refund of tax by the reason of inadvertence.Erroneous refund of tax by the reason of inadvertence.

Erroneous refund of tax by the reason of error.Erroneous refund of tax by the reason of error.

Erroneous refund of tax by the reason of misconstruction.Erroneous refund of tax by the reason of misconstruction.

Recovery of tax u/s 36Recovery of tax u/s 36 Section 36(2) – Mandatory conditionsSection 36(2) – Mandatory conditions

Issuance of show cause notice to the person liable Issuance of show cause notice to the person liable to pay non levied, short levied tax or erroneous to pay non levied, short levied tax or erroneous refund.refund.

Service of notice within 3 years from the due date Service of notice within 3 years from the due date of payment of tax u/s 6 and date of refund in case of payment of tax u/s 6 and date of refund in case of erroneous refund.of erroneous refund.

Amount of non levied, short levied or erroneous Amount of non levied, short levied or erroneous refund required to be paid must be SPECIFIED in refund required to be paid must be SPECIFIED in the Notice.the Notice.

Recovery of tax u/s 36Recovery of tax u/s 36 Section 36(3) – Mandatory conditionsSection 36(3) – Mandatory conditions

Consideration of objections of the person served with show Consideration of objections of the person served with show cause notice by the empowered sales tax officer.cause notice by the empowered sales tax officer.

Determination of the amount of tax or charge in the order Determination of the amount of tax or charge in the order payable by the person on whom the show cause notice is payable by the person on whom the show cause notice is served.served.

Order shall be passed within 90 days from the date of Order shall be passed within 90 days from the date of issuance of show cause notice or within extended period as issuance of show cause notice or within extended period as the Collector may for the reasons to be recorded in writing the Collector may for the reasons to be recorded in writing fix.fix.

The Collector is empowered to extend the period for The Collector is empowered to extend the period for passing the order by maximum 90 days.passing the order by maximum 90 days.

Recovery of tax u/s 36Recovery of tax u/s 36 Section 36(4) – Calculation of Limitation period, 5 year u/s Section 36(4) – Calculation of Limitation period, 5 year u/s

36(1), 3 years u/s 36(2).36(1), 3 years u/s 36(2).

In case of non levied or short levied the due date of In case of non levied or short levied the due date of payment u/s 6.payment u/s 6.

In case of import the time of payment of custom duty under In case of import the time of payment of custom duty under the Custom Act 1969.the Custom Act 1969.

In case of Taxable supply made, date of filing of return of In case of Taxable supply made, date of filing of return of the period.the period.

In case of taxable goods, supplies or classes of supplies In case of taxable goods, supplies or classes of supplies other than zero rated supplies as specified in the other than zero rated supplies as specified in the notification by the Board, the time or date as specified by notification by the Board, the time or date as specified by Board for the payment of tax in respect of such supplies in Board for the payment of tax in respect of such supplies in the Notification in the Official Gazettee.the Notification in the Official Gazettee.

In case of erroneous tax refund, the date of refund.In case of erroneous tax refund, the date of refund.

Revision by Board u/s 45Revision by Board u/s 45 Section 45A (1) (2) (3) – Revision by BoardSection 45A (1) (2) (3) – Revision by Board

Suo moto exercise of revisional jurisdiction by the Board.Suo moto exercise of revisional jurisdiction by the Board.

Calling for and examining the Record of any departmental Calling for and examining the Record of any departmental proceeding under the Act or Rules made there under.proceeding under the Act or Rules made there under.

Object of revision to check and satisfy itself about the Object of revision to check and satisfy itself about the legality or propriety of any decision or order passed under legality or propriety of any decision or order passed under such proceeding.such proceeding.

Revision of the decision or order of the any sales tax Revision of the decision or order of the any sales tax authority.authority.

Discretion of passing any order as Board think fit –quash, Discretion of passing any order as Board think fit –quash, annul, cancel, modify, vary, maintain, set-aside etc. annul, cancel, modify, vary, maintain, set-aside etc.

Revision by Board u/s 45Revision by Board u/s 45 No order of enhancement or imposition of penalty or fine or No order of enhancement or imposition of penalty or fine or

sales tax greater than original levied unless person effected sales tax greater than original levied unless person effected by the order is given an opportunity of showing cause and by the order is given an opportunity of showing cause and of being heard.of being heard.

No exercise of revisional jurisdiction where appeal before No exercise of revisional jurisdiction where appeal before the Collector of Sales Tax (appeals) u/s 45B or before the the Collector of Sales Tax (appeals) u/s 45B or before the Appellate Tribunal is pending. 45A(2)Appellate Tribunal is pending. 45A(2)

No revision order after the expiry of 5 year from the date of No revision order after the expiry of 5 year from the date of original decision or order of sub-ordinate officer. 45A(3) original decision or order of sub-ordinate officer. 45A(3)

Revision by Collector u/s 45A(2)Revision by Collector u/s 45A(2) Suo moto exercise of revisional jurisdiction by the Collector.Suo moto exercise of revisional jurisdiction by the Collector.

Calling for and examining the record of any proceeding under Calling for and examining the record of any proceeding under the Act or Rules made there under.the Act or Rules made there under.

Checking and satisfying itself about the legality or propriety Checking and satisfying itself about the legality or propriety of any decision or order passed in such proceeding.of any decision or order passed in such proceeding.

Original order to be revised shall have been passed by the Original order to be revised shall have been passed by the officer of sales tax sub-ordinate to Collector.officer of sales tax sub-ordinate to Collector.

Discretion of passing any order as the Collector deemed fit.Discretion of passing any order as the Collector deemed fit.

Limitation of 5 year from the date of original order for Limitation of 5 year from the date of original order for exercise of revisional jurisdiction.exercise of revisional jurisdiction.

(2007) 96 TAX 155 (LHC) New Ammaur industries, PTCL 2001 (2007) 96 TAX 155 (LHC) New Ammaur industries, PTCL 2001 CL 615, Khan trading Company, (2004) 89 Tax 429 LHC, CL 615, Khan trading Company, (2004) 89 Tax 429 LHC, Muskzar Knitwear.Muskzar Knitwear.

Rectification of clerical errors u/s 57Rectification of clerical errors u/s 57

Correction of Clerical or arithmetical errors.Correction of Clerical or arithmetical errors.

Such error should be in theSuch error should be in the AssessmentAssessment AdjudicationAdjudication Order 0rOrder 0r DecisionDecision

Correction of such error may be made at any time without Correction of such error may be made at any time without any limitation.any limitation.

The same sales tax authority or successor in office can The same sales tax authority or successor in office can exercise the power of correction u/s 57.exercise the power of correction u/s 57.

Notice shall be given to the registered person or person Notice shall be given to the registered person or person effected from such correction. effected from such correction.

AdjudicationAdjudication Definition / meaningDefinition / meaning

Kinds and classification Kinds and classification

Subject matterSubject matter

Adjudication authorities and powersAdjudication authorities and powers

Adjudication proceedings and rulesAdjudication proceedings and rules

Adjudication Order and effectsAdjudication Order and effects

Adjudication- meaningAdjudication- meaning StatutoryStatutory

The term adjudication has not been The term adjudication has not been defined in the in the sales tax law, defined in the in the sales tax law, therefore, reference to the dictionary and therefore, reference to the dictionary and judicial meaning of the term adjudication judicial meaning of the term adjudication be made to understand it.be made to understand it.

Dictionary meaningDictionary meaning

Black Law Dictionary, 7Black Law Dictionary, 7thth Edition, page 42. Edition, page 42. ““The legal process of resolving a dispute”The legal process of resolving a dispute” “ “ Process of judicially deciding a case.”Process of judicially deciding a case.”

Adjudication - meaningAdjudication - meaning Judicial meaning.Judicial meaning.

““The word ‘ adjudication’ means judicial determination The word ‘ adjudication’ means judicial determination of a cause after taking into consideration the material on of a cause after taking into consideration the material on record and after the hearing the parties” PLD 1957 Lah record and after the hearing the parties” PLD 1957 Lah 1040, Razia Begun case.1040, Razia Begun case.

“ “ to adjudicate, necessarily implies settling a matter. to adjudicate, necessarily implies settling a matter. This is synonymous with the word ‘adjudge’. The This is synonymous with the word ‘adjudge’. The adjudication process may be before an administrative adjudication process may be before an administrative authority, before a Court of law. Even if it is before as authority, before a Court of law. Even if it is before as administrative agency, the rights are to be adjudged administrative agency, the rights are to be adjudged after notice to parties and the findings are to be after notice to parties and the findings are to be recorded specifically.”recorded specifically.”

““Adjudication is defined as hearing , after notice of legal Adjudication is defined as hearing , after notice of legal evidence on the factual issues involved”. (2004) 90 TAX evidence on the factual issues involved”. (2004) 90 TAX 17 (LHC), Prime chemicals case.17 (LHC), Prime chemicals case.

Adjudication kinds/classificationsAdjudication kinds/classifications Judicial adjudicationJudicial adjudication

adjudication by Court of Law – Civil court, Session court, High adjudication by Court of Law – Civil court, Session court, High Court, Supreme Court- where the process of trial, evidence, and Court, Supreme Court- where the process of trial, evidence, and witness on oath is taken witness on oath is taken

Quasi judicial adjudicationQuasi judicial adjudication

Adjudication of cases by Collector Sales Tax (appeals) and Adjudication of cases by Collector Sales Tax (appeals) and Appellate Tribunal – where elementary rules of justice is followed Appellate Tribunal – where elementary rules of justice is followed i.e., Notice of hearing, opportunity of being heard, examination of i.e., Notice of hearing, opportunity of being heard, examination of documents, consideration and disposal of grounds and argument documents, consideration and disposal of grounds and argument with reasons.with reasons.

Administrative adjudicationAdministrative adjudication

Adjudication of cases by executive authorities, like Sales tax Adjudication of cases by executive authorities, like Sales tax authorities, Board, FTO, President.authorities, Board, FTO, President.

Private adjudication – Arbitration Private adjudication – Arbitration

Scope and subject matterScope and subject matter

Section 45 Section 45 Adjudication mattersAdjudication matters

Assessment of tax casesAssessment of tax cases Charging of default surchargeCharging of default surcharge Imposition of penaltyImposition of penalty Recovery of tax erroneously refundedRecovery of tax erroneously refunded Other contravention under the Act or Other contravention under the Act or

Rules frame there under.Rules frame there under.

Adjudication authorities and powersAdjudication authorities and powersAdditional Additional CollectorCollector

Cases u/s 11(2) and 36 with out any limit Cases u/s 11(2) and 36 with out any limit of tax involved or tax erroneously of tax involved or tax erroneously refunded.refunded.

Deputy Collector Deputy Collector Cases u/s 11(1) – Cases u/s 11(1) –

Cases u/s 11(2) and 36 exceeding Rs 1 Cases u/s 11(2) and 36 exceeding Rs 1 million and does not exceed 2.5 millions million and does not exceed 2.5 millions –Tax or Refund–Tax or Refund

Assistant Assistant Collector Collector

Cases u/s 11(2) and 36 exceeding Rs. Cases u/s 11(2) and 36 exceeding Rs. 10,000 but does not exceeds Rs 1 10,000 but does not exceeds Rs 1 million – Tax involved or refundmillion – Tax involved or refund

Superintendent Superintendent Cases u/s 11(2) and 36 up to Rs. 10,000. Cases u/s 11(2) and 36 up to Rs. 10,000. Tax involved or RefundTax involved or Refund

Any officer of Any officer of sales tax with sales tax with any other any other designationdesignation

Such cases as may be notified by the Such cases as may be notified by the Board.Board.

Adjudication authorities and powersAdjudication authorities and powers

Board power to vary the jurisdiction of the Board power to vary the jurisdiction of the authority and regulate the adjudication system , authority and regulate the adjudication system , transfer of cases, extension of time limit in transfer of cases, extension of time limit in exceptional circumstances.exceptional circumstances.

Tax means principal amount of sales tax other Tax means principal amount of sales tax other than default surcharge and where only default than default surcharge and where only default surcharge in involved the amount of default surcharge in involved the amount of default surcharge.surcharge.

Time limit for pending cases on June, 30 2006 Time limit for pending cases on June, 30 2006 was extended up to December 31, 2006.was extended up to December 31, 2006.

Adjudication proceeding and rulesAdjudication proceeding and rules

Sales tax authorities invested with adjudication Sales tax authorities invested with adjudication powers must comply with the provision of the Act, powers must comply with the provision of the Act, Rules and natural justice. (PLD 1968 Kar. 599)Rules and natural justice. (PLD 1968 Kar. 599)

A proper show cause notice stating therein brief A proper show cause notice stating therein brief facts of the case, the offence committed and the facts of the case, the offence committed and the evidence on the presumption of which the offence evidence on the presumption of which the offence is based should be issued to the person is based should be issued to the person concerned before taking any action against such concerned before taking any action against such person. 1968 P.Cr.L.J 127person. 1968 P.Cr.L.J 127

The show cause notice must be issued by the The show cause notice must be issued by the authority competent to adjudicate the case and authority competent to adjudicate the case and not by the lower authority.not by the lower authority.

Adjudication proceeding and rulesAdjudication proceeding and rules

Show cause notice without mentioning stipulated grounds Show cause notice without mentioning stipulated grounds and reason is defective and against the law. PTCL 2002 CL and reason is defective and against the law. PTCL 2002 CL 1, Khyber Electric Lamp case.1, Khyber Electric Lamp case.

Non availing the opportunity of being heard could not be Non availing the opportunity of being heard could not be complained the violation of principles of natural justice. complained the violation of principles of natural justice. (PTCL 1986 CL 35(PTCL 1986 CL 35

Service of show cause notice on the concerned person , in Service of show cause notice on the concerned person , in the laid down manner, on his last known address and the laid down manner, on his last known address and record of service must be kept.record of service must be kept.

Hearing should be granted by the adjudicating officer Hearing should be granted by the adjudicating officer himself and not by an officer sub-ordinate to him. (AIR 1965 himself and not by an officer sub-ordinate to him. (AIR 1965 Ker 286) Ker 286)

Adjudication proceeding and rulesAdjudication proceeding and rules

Opportunity to rebut the evidence and Opportunity to rebut the evidence and statements on which charge is made – statements on which charge is made – copy, examination etc.copy, examination etc.

Plea and arguments be brought on record Plea and arguments be brought on record and if not admitted then be rebutted with and if not admitted then be rebutted with reason. Speaking order with reasons.reason. Speaking order with reasons.

Exparte decision only where no reply of Exparte decision only where no reply of show cause notice is received with in show cause notice is received with in stipulated period and service of notice is stipulated period and service of notice is proved on the concerned person.proved on the concerned person.

Adjudication proceeding and rulesAdjudication proceeding and rules

Order in cyclostyled form should be avoid as such orders Order in cyclostyled form should be avoid as such orders indicate non application of mind by the Adjudication indicate non application of mind by the Adjudication authority. (PTCL 1986 CL 86.authority. (PTCL 1986 CL 86.

Date of dispatch and date of order must be indicated in the Date of dispatch and date of order must be indicated in the order to enable the aggrieved person to avail the remedies. order to enable the aggrieved person to avail the remedies. No delay between the two dates.No delay between the two dates.

Successor in office must give fresh hearing opportunity and Successor in office must give fresh hearing opportunity and himself should hear the argument to decide the case.himself should hear the argument to decide the case.

Sales Tax authorities are not bound to follow the rules of Sales Tax authorities are not bound to follow the rules of pleading and evidence or witness on oath as required in pleading and evidence or witness on oath as required in Civil courts. PTCL 1986 CL 172, PTCL 1990 CL 370Civil courts. PTCL 1986 CL 172, PTCL 1990 CL 370

Adjudication order and effectsAdjudication order and effects Adjudication order is the decision of the Adjudication order is the decision of the

adjudication authority on the issue of assessment adjudication authority on the issue of assessment of tax, imposition of default surcharge, penalty, of tax, imposition of default surcharge, penalty, erroneous refund, inadmissible tax inputs or other erroneous refund, inadmissible tax inputs or other contravention or charges levelled by the referring contravention or charges levelled by the referring authority.authority.

EffectsEffects ExchequerExchequer Right of recovery subject to revision or effect of appeals Right of recovery subject to revision or effect of appeals

Registered personRegistered person Duty to pay adjudicated tax subject to rectification or Duty to pay adjudicated tax subject to rectification or

effect of appeal remedies.effect of appeal remedies.

AuditAudit

Definition / meaningDefinition / meaning

Kinds / ClassificationsKinds / Classifications

Scope and ProcedureScope and Procedure

Audit report and effectsAudit report and effects

Audit – meaning Audit – meaning Audit meaning – The term audit has not been Audit meaning – The term audit has not been

defined in the Sales Tax Act 1990, however the defined in the Sales Tax Act 1990, however the meaning, connotation colour and shade of the meaning, connotation colour and shade of the term audit shall be construed according to the term audit shall be construed according to the subject or context in which it is used.subject or context in which it is used.

Generally the term audit means the examination of Generally the term audit means the examination of record to form the audit opinion – inception, record to form the audit opinion – inception, enquiry, investigation, search, confirmation, enquiry, investigation, search, confirmation, vouching, verification are the techniques or vouching, verification are the techniques or methods employed for the purpose of audit –methods employed for the purpose of audit –Substantive audit – Compliance audit – factual and Substantive audit – Compliance audit – factual and legallegal

Dictionary Dictionary

Audit - KindsAudit - Kinds Kinds – under sales tax lawKinds – under sales tax law

Annual audit – S.25 (2)Annual audit – S.25 (2) Special audit – S. 32 ASpecial audit – S. 32 A Audit of retailer – S. 32 AAAudit of retailer – S. 32 AA Investigative audit – S 38 & 40 (2003) 88 TAX 1, SC, Investigative audit – S 38 & 40 (2003) 88 TAX 1, SC,

Master ent., (2005) 92 TAX 59, SC, Mega TechMaster ent., (2005) 92 TAX 59, SC, Mega Tech Revenue audit – VOl 11 No.3 TAX FORUM 51 (Bestway Revenue audit – VOl 11 No.3 TAX FORUM 51 (Bestway

Cement Ltd.)Cement Ltd.)

Kinds – GeneralKinds – General Statutory auditStatutory audit Financial AuditFinancial Audit Management /system auditManagement /system audit Operation auditOperation audit Internal vs. External audit Internal vs. External audit Continues vs. interim auditContinues vs. interim audit Tax auditTax audit Desk auditDesk audit Compliance auditCompliance audit

Audit scope and proceduresAudit scope and procedures Annual auditAnnual audit

Access to record, documents –s.25Access to record, documents –s.25 Sale tax General order No. 1 of 2004 Part IV.Sale tax General order No. 1 of 2004 Part IV.

Special AuditSpecial Audit Special audit by Chartered accountants or Cost and Special audit by Chartered accountants or Cost and

management Accounts. S. 32Amanagement Accounts. S. 32A Sales tax Rule 2006, Chapter VISales tax Rule 2006, Chapter VI

Audit of Retailer S. 32AAAudit of Retailer S. 32AA

Investigative auditInvestigative audit Authorised officers to have access to premises, stocks, Authorised officers to have access to premises, stocks,

accounts and records – S.38accounts and records – S.38 Power to call for information s.38APower to call for information s.38A Obligation to produce documents and provide information. S. Obligation to produce documents and provide information. S.

38B38B Search under warrant s. 40Search under warrant s. 40 Posting of sales tax officer. S. 40BPosting of sales tax officer. S. 40B

Tax audit reportTax audit report Audit report is at best an opinion of the auditor Audit report is at best an opinion of the auditor

and material in support of the department and material in support of the department version. The audit report is nothing more than version. The audit report is nothing more than part of charge sheet which needs to be part of charge sheet which needs to be established through the process of adjudication. A established through the process of adjudication. A material collected during the course of audit is material collected during the course of audit is only an evidence to support the case of the only an evidence to support the case of the department in adjudication proceedings. (PTCL department in adjudication proceedings. (PTCL 2004 CL 84)2004 CL 84)

Contravention report or statement of allegation Contravention report or statement of allegation prepared by the department to be proved prepared by the department to be proved through Adjudication process.through Adjudication process.

Components – Non levied tax , short levied tax, Components – Non levied tax , short levied tax, inadmissible input tax, erroneous refund, other inadmissible input tax, erroneous refund, other contraventions of law and rules. Sec. 25(4)contraventions of law and rules. Sec. 25(4)

JurisdictionJurisdiction Subject matter jurisdiction – persons, good, Subject matter jurisdiction – persons, good,

object, event, transactions, etc.object, event, transactions, etc.

Territorial Jurisdiction – Place, region, residence, Territorial Jurisdiction – Place, region, residence, etc.etc.

Pecuniary jurisdiction – financial, Monetary, ValuePecuniary jurisdiction – financial, Monetary, Value

Original jurisdiction, revisional jurisdiction, Original jurisdiction, revisional jurisdiction, appellate jurisdiction, Advisory Jurisdiction, writ appellate jurisdiction, Advisory Jurisdiction, writ jurisdiction. Etc.jurisdiction. Etc.

JurisdictionJurisdiction Question of jurisdiction Question of jurisdiction

Question of jurisdiction could be raised at any Question of jurisdiction could be raised at any stage.stage. Being question of lawBeing question of law

Goes to the root of the caseGoes to the root of the case

Correct application of law is the duty of the Correct application of law is the duty of the judge and petitioner is not bound to engage judge and petitioner is not bound to engage the counsel.the counsel.

Complete end of justice is the object of law and Complete end of justice is the object of law and technicalities should not defeat the end of technicalities should not defeat the end of justice.justice.

JurisdictionJurisdiction Question of jurisdiction goes to the root of case can be raised for the Question of jurisdiction goes to the root of case can be raised for the

first time even while appearing before the highest Court of country. first time even while appearing before the highest Court of country. 2006 SCMR 16302006 SCMR 1630

Exception- Exception- question of jurisdiction raised by the party and repudiate when it goes question of jurisdiction raised by the party and repudiate when it goes

against it.against it. When equity is against the person raising the question of jurisdiction and if When equity is against the person raising the question of jurisdiction and if

upheld the consequence would be to perpetuate an ill-gotten gain or to upheld the consequence would be to perpetuate an ill-gotten gain or to bring about a plainly unjust consequence.bring about a plainly unjust consequence.

Territorial or pecuniary jurisdiction which are the matter of civil code procedure and Territorial or pecuniary jurisdiction which are the matter of civil code procedure and suit valuation act. suit valuation act.

PLD 1968 SC 278, “Judge must wear all the law of country on the sleeve of his PLD 1968 SC 278, “Judge must wear all the law of country on the sleeve of his robe”robe”

Jurisdiction conferred by Constitution or law and not by consent or Jurisdiction conferred by Constitution or law and not by consent or acquiescence. 2004 SCMR 1622.acquiescence. 2004 SCMR 1622.

Order with out jurisdiction is void PLD 1975 sc 331 2006 SCMR 1713, PLD 1958 Order with out jurisdiction is void PLD 1975 sc 331 2006 SCMR 1713, PLD 1958 SC104, PLD 1973 SC326, PLD 2002 SC 630, 2003 SCMR 59, 2004 SCMR 28, SC104, PLD 1973 SC326, PLD 2002 SC 630, 2003 SCMR 59, 2004 SCMR 28, 1798,1798,

Non fulfilment of mandatory condition render the order void being passed Non fulfilment of mandatory condition render the order void being passed without lawful authority.without lawful authority.

PLD 1971 SC 124., 1991 SCMR 599 Allied Bank case. PTCL 2000 CL 465PLD 1971 SC 124., 1991 SCMR 599 Allied Bank case. PTCL 2000 CL 465

JurisdictionJurisdiction Exercise of jurisdiction by the Incompetent Exercise of jurisdiction by the Incompetent

Tribunal is void. PLD 1960 SC 237Tribunal is void. PLD 1960 SC 237

Where the assessment is required to be Where the assessment is required to be made by the Assistant Collector and the made by the Assistant Collector and the assessment is made by the deputy assessment is made by the deputy collector, assessment is without collector, assessment is without jurisdiction –PTCL 1993 CL 301, Pakistan jurisdiction –PTCL 1993 CL 301, Pakistan Oxygen Ltd., PTCL 1990 CL 337, PTCL Oxygen Ltd., PTCL 1990 CL 337, PTCL 1994 CL 840 Hoechst Pharmaceutical 1994 CL 840 Hoechst Pharmaceutical Pakistan (pvt) limited.Pakistan (pvt) limited.

Coram non judice.Coram non judice.

Show Cause NoticeShow Cause Notice Non issuance of show cause notice PLD 1971 SC 591 Non issuance of show cause notice PLD 1971 SC 591

Collector Sahiwal caseCollector Sahiwal case

Show cause notice without jurisdiction, GST 2003 CL 63,LHC, Show cause notice without jurisdiction, GST 2003 CL 63,LHC, Service Industries, PLD 1963 SC 136 , Ittehad chemicals Service Industries, PLD 1963 SC 136 , Ittehad chemicals case.case.

Defective Show cause notice proceedings voidDefective Show cause notice proceedings void without mentioning section and sub sectionwithout mentioning section and sub section without mentioning prescribed grounds and reasonswithout mentioning prescribed grounds and reasons with out mentioning exact amount of tax payable.with out mentioning exact amount of tax payable.

PTCL 2003 CL 362,LHC, D.I. G Khan Cement,( 2001) 84 TAX PTCL 2003 CL 362,LHC, D.I. G Khan Cement,( 2001) 84 TAX 133 SC, Khyber Electric, Zamidara Paper mill case 2004 PTCL 133 SC, Khyber Electric, Zamidara Paper mill case 2004 PTCL 212, LHC = 2003 GST 439, (2003) 88TAX 128 LHC, Atlas 212, LHC = 2003 GST 439, (2003) 88TAX 128 LHC, Atlas Tyres case, Caltex 2005 PTD 480 (SC)Tyres case, Caltex 2005 PTD 480 (SC)

Ground not mentioned in the show cause notice cannot be Ground not mentioned in the show cause notice cannot be adjudicated (2004) 90 TAX 146, KHC, Excide Pakistan case., adjudicated (2004) 90 TAX 146, KHC, Excide Pakistan case., 1987 SCMR 1840, Rahim Din case.1987 SCMR 1840, Rahim Din case.

Show Cause NoticeShow Cause Notice Intimation of audit observation does not constitute show Intimation of audit observation does not constitute show

cause notice. PTCL 2005 CL 224 KHC.cause notice. PTCL 2005 CL 224 KHC.

Show cause notice must indicate it is a show cause notice Show cause notice must indicate it is a show cause notice and the respondent is to make aware that if not responded and the respondent is to make aware that if not responded the adverse action might be taken. PTCL 2003 CL 224 KHC, the adverse action might be taken. PTCL 2003 CL 224 KHC, United Export case.United Export case.

Show cause holding in one case and vacating in an other Show cause holding in one case and vacating in an other case is discrimination. PTCL 2002 CL 50 KHC, Novartis case is discrimination. PTCL 2002 CL 50 KHC, Novartis Pakistan case.Pakistan case.

Question of validity of show cause notice could be raised at Question of validity of show cause notice could be raised at any stage, (2003) 88 TAX 128, 2004 PTCL 212, Zimandara any stage, (2003) 88 TAX 128, 2004 PTCL 212, Zimandara case.case.

Time barred notice void. (2007) 96 TAX 229 (LHC) Shafiq Time barred notice void. (2007) 96 TAX 229 (LHC) Shafiq traders vs.. collector Customs. , (1963) 7 TAX 442 SC traders vs.. collector Customs. , (1963) 7 TAX 442 SC Nagina Silk millsNagina Silk mills

Opportunity of being heardOpportunity of being heard AUDI ALTERAM PARTEMAUDI ALTERAM PARTEM Opportunity of being heard provided by the Opportunity of being heard provided by the

statue not given to the taxpayer – order is void statue not given to the taxpayer – order is void and incurable and subsequent proceeding also and incurable and subsequent proceeding also null and void and bound to fall.PLD 1971 SC 591, null and void and bound to fall.PLD 1971 SC 591, Collector Shawal case.Collector Shawal case.

Opportunity of being heard is a principle of Opportunity of being heard is a principle of natural justice and part and parcel of every natural justice and part and parcel of every statute, 1964 PLD 410 SC Fazalur Rehman case. statute, 1964 PLD 410 SC Fazalur Rehman case.

Opportunity not only in writing but also in Opportunity not only in writing but also in personal hearing. 1994 SCMR 2232, 1999 PTD personal hearing. 1994 SCMR 2232, 1999 PTD 1358 KHC, Siemens case. 1358 KHC, Siemens case.

Opportunity- MandatoryOpportunity- Mandatory 1971 SCMR 681 , Collector, Sahiwal & 1971 SCMR 681 , Collector, Sahiwal &

others vs.. Muhammad Akhtar.others vs.. Muhammad Akhtar.

“ “ The principle so far as this country is The principle so far as this country is concerned, is accordingly well settled that concerned, is accordingly well settled that where notice required to be given by the statue where notice required to be given by the statue is a mandatory notice, then the failure to is a mandatory notice, then the failure to comply with such a mandatory requirement of comply with such a mandatory requirement of the statute would render the act void ab initio as the statute would render the act void ab initio as being as act performed in disregard of the being as act performed in disregard of the provision of the Statute . Furthermore, any provision of the Statute . Furthermore, any further action taken on the basis of such a void further action taken on the basis of such a void order would also be vitiated and the defect at order would also be vitiated and the defect at the initial stage would be incurable by a hearing the initial stage would be incurable by a hearing at a subsequent stage.” PG. 685at a subsequent stage.” PG. 685

LimitationLimitation Law of limitation is based on the maxims:Law of limitation is based on the maxims:

Delay defeats equity.Delay defeats equity. Time and tide wait for none.Time and tide wait for none. Law helps the vigilant and not the indolent.Law helps the vigilant and not the indolent. Delay of justice denial of justiceDelay of justice denial of justice

Question of limitation.Question of limitation.

Pure question of limitation can be raised at any stage of appeal Pure question of limitation can be raised at any stage of appeal PLD 1968 Dacca 701,PLD 1968 Dacca 701,

Mixed question of law and fact where record is required to be Mixed question of law and fact where record is required to be examined , is to be raised at the initial stage. PLD 1969 SC examined , is to be raised at the initial stage. PLD 1969 SC 167, PLD 1985 SC 153167, PLD 1985 SC 153

Limitation is the matter of statue and be decided by the court or Limitation is the matter of statue and be decided by the court or authority and not left to pleading by the party. 2006 PTD 271 authority and not left to pleading by the party. 2006 PTD 271 (SC)(SC)

Scope of raising question of law 2004 PTD 2479, 90 TAX 191Scope of raising question of law 2004 PTD 2479, 90 TAX 191

LimitationLimitation Law of limitation is a law of procedure and change in law of Law of limitation is a law of procedure and change in law of

procedure is applicable retrospectively to the pending procedure is applicable retrospectively to the pending cases. 1993 PTD 459 (SC) = 67 TAX 17, CIT vs.. Asbestos cases. 1993 PTD 459 (SC) = 67 TAX 17, CIT vs.. Asbestos Cement industry.Cement industry.

Change in limitation law cannot revive or extend the Change in limitation law cannot revive or extend the limitation period already expired. 1993 PTD 459 (SC), limitation period already expired. 1993 PTD 459 (SC), (2005) 91 TAX 258 (LHC), Fawad Textiles.(2005) 91 TAX 258 (LHC), Fawad Textiles.

Start of LimitationStart of Limitation

In case of issuance of show cause notice or passing In case of issuance of show cause notice or passing order, as stipulated in the statuteorder, as stipulated in the statute

In case of review, revision, appeal, date of service of In case of review, revision, appeal, date of service of notice, in case of dispute of service, date of Knowledge. notice, in case of dispute of service, date of Knowledge. 2002 PTD 399 = 85 TAX 3972002 PTD 399 = 85 TAX 397

Limitation start from the date of knowledge and not from Limitation start from the date of knowledge and not from the date of communication of order. (2002) 85 Tax 397, the date of communication of order. (2002) 85 Tax 397, Qureshi Ghee, SC, AJKQureshi Ghee, SC, AJK

LimitationLimitation No limitation run against void order. 2000 PTD 2707, 1996 No limitation run against void order. 2000 PTD 2707, 1996

SCMR 856, 1986 SCMR 1238, PLD 1963 SC 382.SCMR 856, 1986 SCMR 1238, PLD 1963 SC 382.

Limitation create the right in favour of the opposite party. Limitation create the right in favour of the opposite party. 2007 PTD 1387 SC.2007 PTD 1387 SC.

Limitation does not extinguish the right but bar the remedy Limitation does not extinguish the right but bar the remedy – acknowledge of tax time barred debt or adjustment after – acknowledge of tax time barred debt or adjustment after expiration of period of limitation is held justified. 2007 expiration of period of limitation is held justified. 2007 SCMR 1318.SCMR 1318.

Time once started cannot be stopped. 1963 PTD 633= 70 Time once started cannot be stopped. 1963 PTD 633= 70 TAX 442 (SC).TAX 442 (SC).

Each and every day to be explained for condo nation of Each and every day to be explained for condo nation of delay but in case of Revenue matter condo nation delay but in case of Revenue matter condo nation application be considered sympathetically. 42 TAX 140, application be considered sympathetically. 42 TAX 140, 2002 PTD 5062002 PTD 506

LimitationLimitation Time barred order void – extension under the exceptional circumstance Time barred order void – extension under the exceptional circumstance

provided by the statue could be made accordingly and showing such provided by the statue could be made accordingly and showing such circumstance in writing. 96 TAX 229 (LHC).circumstance in writing. 96 TAX 229 (LHC).

Limitation provisions regarding fixing of tax liability are mandatory. PTCL Limitation provisions regarding fixing of tax liability are mandatory. PTCL 2005 CL 8362005 CL 836

Right accrued through expiration of limitation can not be waived. )2007) 96 Right accrued through expiration of limitation can not be waived. )2007) 96 TAX 229 (LHC) Shafiq traders.TAX 229 (LHC) Shafiq traders.

Waiver of question of limitation. 2003 PTD 1899 (SC).Waiver of question of limitation. 2003 PTD 1899 (SC).

Limitation is question of law or fact. 2005) 92 TAX 253, 2006 SCMR 425, Limitation is question of law or fact. 2005) 92 TAX 253, 2006 SCMR 425, PLD 1969 SC 187, PLD 1990 SC 80, 2005 PTD 78 (SC).PLD 1969 SC 187, PLD 1990 SC 80, 2005 PTD 78 (SC).

State or public functionary do not enjoy preferential treatment in case of State or public functionary do not enjoy preferential treatment in case of condo nation of limitation.condo nation of limitation.

Time cannot be extended but condoned. 1960 PTD1253 HC =21 TAX 279Time cannot be extended but condoned. 1960 PTD1253 HC =21 TAX 279

Litigants cannot be made suffer for laches and inaction of the Department. Litigants cannot be made suffer for laches and inaction of the Department. 1967 PTD 614, 15 TAX 2191967 PTD 614, 15 TAX 219

Correct application of law, whether question of law of limitation is raised or Correct application of law, whether question of law of limitation is raised or not. 2004 PTD 2479= 90 TAX 191 Asim spinning mills case. Garton case.not. 2004 PTD 2479= 90 TAX 191 Asim spinning mills case. Garton case.

Vested right of escapementVested right of escapement“ “ There is hardly any doubt that once time There is hardly any doubt that once time

prescribed for doing an act by an prescribed for doing an act by an executive authority expires, the executive authority expires, the taxpayer is clothed with a vested right taxpayer is clothed with a vested right of escapement of assessment” of escapement of assessment”

324E, (2007) 96 TAX 229 (LHC), Shafiq Trader 324E, (2007) 96 TAX 229 (LHC), Shafiq Trader vs.. Collector of vs.. Collector of Custom. (1963) 7 TAX 442 (SC) Custom. (1963) 7 TAX 442 (SC) Nagina Silk Mills, (1982) 138 Nagina Silk Mills, (1982) 138 ITR462.ITR462.

Case lawsCase laws

Constitutionality validityConstitutionality validity Ellahi cotton. 76 TAX 5= 1997 PTD 1555 Ellahi cotton. 76 TAX 5= 1997 PTD 1555

(SC)(SC) Hunza 79 TAX 433 (SC) =1999 PTD 1135Hunza 79 TAX 433 (SC) =1999 PTD 1135 Shikhoo Sugar 1998 PTD 2421 (SC)Shikhoo Sugar 1998 PTD 2421 (SC) Gatron PTCL 1999 CL 359Gatron PTCL 1999 CL 359 Pfizer Laboratories PTCL 1998 CL 354 (SCPfizer Laboratories PTCL 1998 CL 354 (SC Army Welfare 1992 SCMR 1652Army Welfare 1992 SCMR 1652

Case lawsCase laws

ChargingCharging Sanghar sugar 2007) 96 TAX 105 (SC)Sanghar sugar 2007) 96 TAX 105 (SC) Wapda 2002 PTD 2077 (LHC)Wapda 2002 PTD 2077 (LHC) Al-Hilal Motors, 2004 PTD 868 (KHC)Al-Hilal Motors, 2004 PTD 868 (KHC)

Case lawsCase laws AssessmentAssessment

Mayfair spinning PTCL 2002 CL 115 (LHC)Mayfair spinning PTCL 2002 CL 115 (LHC) Khyber electric (2001) 84 TAX 133 (SC) Khyber electric (2001) 84 TAX 133 (SC) Caltex oil, 91 TAX 277 (SC), 2005 PTD 480Caltex oil, 91 TAX 277 (SC), 2005 PTD 480 State Cement 1998 PTD 2999 (SC), Piecemeal demand u/s 36. State Cement 1998 PTD 2999 (SC), Piecemeal demand u/s 36. Attock Cement 1999 PTD 1892 (SC) = 80 TAX 30Attock Cement 1999 PTD 1892 (SC) = 80 TAX 30 K & A Industry , 2006 PTD 537 (SC), Notice beyond limitation.K & A Industry , 2006 PTD 537 (SC), Notice beyond limitation.

AuditAudit Muskzar Knitwear (2004) 89 TAX 429 (LHC)Muskzar Knitwear (2004) 89 TAX 429 (LHC)

AdjudicationAdjudication AA steel mills Ltd. 2004 PTD 624AA steel mills Ltd. 2004 PTD 624 Khyber electric (2001) 84 TAX 133 (SC)Khyber electric (2001) 84 TAX 133 (SC)

Revision Revision (2007) 96 TAX 155 (LHC ) New ammar industries(2007) 96 TAX 155 (LHC ) New ammar industries (2002) 85 TAX 458 (LHC) Flying Paper and board(2002) 85 TAX 458 (LHC) Flying Paper and board Revision confined to departmental proceeding- Flying caseRevision confined to departmental proceeding- Flying case No order of CBR for fresh audit u/s 45 A, 2004 PTD 714. (LHC) Muskzar No order of CBR for fresh audit u/s 45 A, 2004 PTD 714. (LHC) Muskzar

case. case.

Speaking orderSpeaking order Reason and record are two hallmarks of all judicial and Reason and record are two hallmarks of all judicial and

quasi-judicial proceeding. An order not supported by reasons quasi-judicial proceeding. An order not supported by reasons is just like an oral order which no judicial authority could is just like an oral order which no judicial authority could ever pronounce. Kings and Lords.ever pronounce. Kings and Lords.

PLD 1970 SC 173, Mollah Ejhar Ali v. Government of Pakistan PLD 1970 SC 173, Mollah Ejhar Ali v. Government of Pakistan “ there in no doubt that the High Court’s order which is “ there in no doubt that the High Court’s order which is unfortunately perfunctory gives the impression of hasty off-unfortunately perfunctory gives the impression of hasty off-hand decision which, although found to be correct in its hand decision which, although found to be correct in its result, is most deficient in its content. If summary order of result, is most deficient in its content. If summary order of rejection can be made in such terms, there is no reason why rejection can be made in such terms, there is no reason why a similar order of acceptance saying ‘ there is considerable a similar order of acceptance saying ‘ there is considerable substance in the petition which is accepted’, should not be substance in the petition which is accepted’, should not be equally blessed. This will reduce the whole judicial process to equally blessed. This will reduce the whole judicial process to authoritarian decrees without the need for logic and authoritarian decrees without the need for logic and reasoning which have always been the tratitional pillars of reasoning which have always been the tratitional pillars of judicial pronouncement investing them with their primary judicial pronouncement investing them with their primary excellence of propriety and judicial balance.excellence of propriety and judicial balance.

Speaking orderSpeaking order Litigants who bring their disputes to the law Courts with the Litigants who bring their disputes to the law Courts with the

incidental hardships and expenses involved to expect a patient incidental hardships and expenses involved to expect a patient and a judicious treatment of their cases and their and a judicious treatment of their cases and their determination by proper orders. A judicial order must be a determination by proper orders. A judicial order must be a speaking order manifesting by itself that the Court has applied speaking order manifesting by itself that the Court has applied its mind to the resolution of the issues involved for their proper its mind to the resolution of the issues involved for their proper adjudication. The ultimate result may be reached by a laborious adjudication. The ultimate result may be reached by a laborious effort, but if the final order does not bear an imprint of that effort, but if the final order does not bear an imprint of that effort and on the contrary discloses arbitrariness of thought effort and on the contrary discloses arbitrariness of thought and action, the feeling with the painful results, that justice has and action, the feeling with the painful results, that justice has neither been done nor seem to have been done is inescapable. neither been done nor seem to have been done is inescapable. When the order of a lower Court contains no reasons, the When the order of a lower Court contains no reasons, the appellate Court is deprived of the benefit of the views of the appellate Court is deprived of the benefit of the views of the lower Court and is unable to appreciate the processes by which lower Court and is unable to appreciate the processes by which the decision has been reached.”the decision has been reached.”

Reasons and exercise of power, 1998 SCMR 2268, Airport Reasons and exercise of power, 1998 SCMR 2268, Airport support service case., 1998 SCMR 2419, Zain yar khan support service case., 1998 SCMR 2419, Zain yar khan v.WAPADAv.WAPADA

Quasi judicial order should, in principal carry due reasons, PLJ Quasi judicial order should, in principal carry due reasons, PLJ 1999 SC 11051999 SC 1105

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