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SHC restrains tax authorities from taking action against New Indus Cotton Ginning and others

SHC restrains tax authorities from taking action against New Indus Cotton Ginning and others

KARACHI: The Sindh High Court (SHC) has restrained the tax authorities from taking coercive action against the petitioners on constitutional petitions filed by M/s New Indus Cotton Ginning Pressing Factory & Oil Mill, M/s Insaf Cotton Ginning Pressing Factory & Oil Mill, M/s Sachal Cotton Ginning Pressing Factory, M/s Sawera Indus Ginning Pressing Factory and Dewan Cotton Ginning Pressing Factory against impugned show cause notices for recovery of sales tax issued by tax authorities.

Hearing the petition, a two-member bench, headed by Justice Aqeel Ahmed Abbasi, also issued notices to the tax authorities and deputy attorney general of Pakistan directing them to file their respective comments on the next date of hearing, then the court adjourned the hearing for January 17, 2016.

During the hearing, counsels for the petitioners stated in their separate petitions that in pursuant to order passed by tax authorities for the recovery of sales tax, the petitioners filed appeals along with stay applications before the Commissioner Inland Revenue (Appeal) Hyderabad, which are pending for disposal. However, during the pendency of such these appeals, respondents have initiated coercive action for the recovery of the tax. The counsels further argued that a taxpayer is entitled to seek remedy by approaching at least one independent forum of appeal.

Citing, the Chief Commissioner Inland Revenue Large Taxpayer Office, the Commissioner Inland Revenue Appeal Large Taxpayer, the Deputy Commissioner Inland Revenue Enforcement and Collection Unit-X, Sangar as respondents, the petitioners pleaded the court may declare act of the respondents as illegal, mala fide and arbitrary.

They also pleaded the court to set aside the impugned orders of the tax authorities and restrain them from taking any coercive action against the petitioners.