APPELLATE TRIBUNAL INLAND REVENUE, LAHORE BENCH LAHORE.
STA
No.811/LB/2023
MA(Stay) No.2606/LB/2023
M/s. Fine Industries (Pvt) Ltd.
Al-Hamad Industrial Estate, Faisalabad. ...
Appellant
Versus
The CIR, RTO, Faisalabad. … Respondent
Appellant by :Mr. Khurram Shahbaz Butt, Advocate
Respondent by :Mr.
Asad ur Rehman, DR along with
Mr. Tariq Baig, ACIR
Date of hearing :04.04.2023
Date of order :04.04.2023
O R D
E R
M.M. AKRAM (JUDICIAL MEMBER):
Titled appeal filed by the appellant/registered person directly as the first
appeal before this Tribunal under section 46(1)(b) of the Sales Tax Act, 1990 (“the
Act”) assailing the impugned order No.366 dated 28.03.2023, passed by the learned
Commissioner Inland Revenue, Corporate Zone, RTO, Faisalabad under section 38
of the Act on the strength of grounds of appeal as set forth in the memo of appeal. The appellant has also filed a
miscellaneous application for seeking interim relief against further
proceedings in pursuance of the impugned order. We intend to dispose of the
same in the following paragraphs.
STA No.811/LB/2023
02. Brief facts culled out from the record are
that the learned Commissioner Inland Revenue in the exercise of the power
conferred upon him under section 38 of the Act constituted a team vide order No.
366 dated 28.03.2023, comprising of Assistant Commissioner, IR along with other
twelve officials/staff members with the powers to have free access to business
or manufacturing premises of the registered office or any other place where any
stock, business record or documents required under the Act are kept or
maintained in respect of the registered person/appellant. As a consequence of
the said order, the above-said team visited/raided the premises of the
appellant and impounded the record therefrom after obtaining a search warrant
from the concerned Magistrate as required under section 40 of the Act.
03. Feeling discontented with the above-said
treatment meted out by the department, the registered person/appellant
preferred the instant appeal before this Tribunal and has called into question
the very exercise of jurisdiction with regard to the invocation of section 38
of the Act inter alia on the ground
that while issuing the impugned order the learned CIR deputed/authorized (12)
persons out of which (five) persons were officers of Inland Revenue in terms of
section 30 of the Act below the rank of Assistant Commissioner and (six)
persons were from the lower staff i.e. Upper Division Clerks, Naib Qasid and
Sepoy to exercise the powers as envisaged in the provisions of section 38 of
the Act. They raided the premises of the appellant and the record was taken
away. The learned AR also challenged the search warrant as well on the ground
that the concerned Magistrate has not strictly adhered to the law and procedure
relating to search given in the Code of Criminal Procedure, 1898. In support,
he placed on record the judgments of the superior courts in booklet form.
04. The case came for a hearing on 04.04.2023.
The concerned assessing officer was also present with a complete record. The
learned AR for the appellant vehemently argued that the impugned order was
issued in a flagrant violation of the relevant statutory provisions of law as
neither proper procedure has been followed by the learned Commissioner Inland
Revenue nor due consideration has been given to mandatory requirements of the
law. According to him, impugned order suffers from certain legal infirmities.
He explains his viewpoint by maintaining that the learned Commissioner Inland
Revenue brushed aside the mandatory provisions contained in the proviso to
sub-section (2) section 25 of the Act which categorically states that no
appointment of officers, below the rank of Assistant Commissioner, is lawful
for the purposes of conducting inquiry/investigation under section 38 of the
Act against the registered person. It has also been urged that the appointment
of officers below the rank of Assistant Commissioner and authorizing free
access to the business premises of the appellant was clearly unlawful, without
jurisdiction, and illegal.
5. He further asserts that without prejudice
to the above and without conceding the above legal position, even if it is
considered/assumed that on a jurisdictional plane, the provisions of section 38
of the Act were lawfully invoked, these have not been legally and rightfully
imposed in the case of the appellant because the entire edifice is based on
suspicions, surmises, conjectures, and presumptions, etc. On 28.03.2023 at the
time of the raid, there was no inquiry/investigation/assessment against the
appellant in respect of evasion of tax or commission of fraud pending before
any authority nor did the appellant has notice of any proceedings instituted
against them under the Act; there was no reasonable basis for the revenue to
visit the appellant’s premises and seize the appellant’s records after searching
and as such, the action of the revenue authorities is unlawful, mala fide,
arbitrary, illegal and amounts to a deprivation of the appellant’s right to be
dealt with in accordance with law.
6. On the other hand, the learned DR strongly
supported the impugned order. He attempted to justify the exercise of powers
under section 38 of the Act on the legal plane that the action of 28.03.2023
was taken under section 38 of the Act and after obtaining a proper search
warrant from the concerned Magistrate. Learned DR asserted that revenue visited
the premises after having credible information and material evidence on the
basis of which it was evident that the appellant is involved in tax fraud and
evasion of sales tax. On our specific quarry about the appointment of the team
below the rank of Assistant Commissioner, he could not render any satisfactory
explanation. However, he submitted that authorization was given only to the
Assistant Commissioner Inland Revenue and the other officials were supporting
staff to assist him.
7. We have heard the arguments advanced by
the representatives of both parties and also carefully gone through the
impugned order dated 28.03.2023 as well as the case laws cited by the learned
AR for the appellant. On the rival contentions, the
questions that would arise for consideration are as follows:-
(i) Whether before issuing the order under
section 38 of the Act in the case of the registered person, the Assessing
Officer has to form any prima facie opinion on the basis of the materials on
record under section 25 of the Act that the registered person is involved in
tax fraud or evasion of tax?
(ii) Whether in the facts and circumstances of
the case, the team of officials below the rank of Assistant Commissioner could
have been authorized by the Commissioner Inland Revenue for the purpose of invoking
provision of section 38 of the Act?
(iii) Whether while conducting the search and
seizure, the team of officials strictly adhered to the procedure given in the Code
of Criminal Procedure, 1898?
(iv) Whether the search warrant issued by the
Magistrate was in accordance with law?
8. First, we take question
Nos. (i) & (ii) and are dealt with together for the reason that both are inter-related.
Before proceeding further, it is necessary to know what is contemplated in
Section 38of the Act. For ready reference, the provision is reproduced
below:
“38. Authorised officers to have access to premises,
stocks, accounts and records – (1) Any officer authorised in this behalf by
the Board or the Commissioner shall have free access to business or
manufacturing premises, registered office or any other place where any stocks,
business records or documents required under this Act are kept or maintained
belonging to any registered person or a person liable for registration or whose
business activities are covered under this Act or who may be required for any
inquiry or investigation in any tax fraud committed by him or his agent or any
other person; and such officer may, at any time, inspect the goods, stocks,
records, data, documents, correspondence, accounts and statements, utility
bills, bank statements, information regarding nature and sources of funds or
assets with which his business is financed, and any other records or documents,
including those which are required under any of the Federal, Provincial or
local laws maintained in any form or mode and may take into his custody such
records, statements, diskettes, documents or any part thereof, in original or
copies thereof in such form as the authorised officer may deem fit against a
signed receipt.
(2) The registered person, his agent, or any other person
specified in sub-section (1) shall be bound to answer any question or furnish
such information or explanation as may be asked by the authorised officer.
(3) The department of direct and indirect taxes or any
other Government department, local bodies, autonomous bodies, corporations or
such other institutions shall supply requisite information and render necessary
assistance to the authorised officer in the course of inquiry or investigation
under this section.”
A plain reading of the above section gives the
authority to any officer authorized either by the Board or by the Commissioner
to have free access to business or manufacturing premises, registered office,
or any other place where any stocks, business records, or documents required
under the act are kept or maintained. Subsection (1) of Section 38 then
proceeds to specify the four different kinds of persons in respect of whom the
powers of Section 38 may be excised. These are:
(1)
Any
registered person;
(2)
A
person liable for registration;
(3)
A
person whose business activities are covered under this act; or
(4)
A
person who may be required in any inquiry or an investigation or in text fraud committed
by him or his agent, or any other person.
Doubtless Section 38 is an independent
self-executing provision and can be set in motion without recourse to Section
25 of the Act. It is a fallacy that in all cases, the provision of Section 38
can only be triggered once the proceedings under Section 25 have been completed
and conducted. As stated above, there are four categories of persons who may be
made subject to the proceeding under section 38. Section 25, however, only
relates to a registered person and none else in whose respect an audit may be
conducted and proceedings may be initiated for any inquiry and investigation
under Section 38 upon sufficient evidence. In the case of a registered person,
where there are allegations of tax fraud or evasion of tax, the provision of
section 38 cannot be invoked unless an opinion has been formed under Section 25
of the Commissioner's concern. Undisputedly, in
the instant case, the appellant is a registered person and the provisions of
section 38 of the Act cannot be invoked independently unless an opinion has
been formed under section 25 of the Act. In the instant case, an alleged
allegation of fraud and evasion of tax is attributed by the Commissioner IR but
the audit under section 25 has not been conducted to ascertain the level of
fraud and evasion of tax by the Audit Officer. In the case of a registered
person, the provisions of section 38 have a close nexus with the provisions of
section 25, and both provisions are read to be conjunctive. Reliance
may be placed on the judgment titled M/s Iqbal and Sons Vs Federation of
Pakistan and three others, PTCL 2017 CL 627(H.C) wherein it
observed that.
“13. The category of persons who may be required for any inquiry or investigation into a tax fraud committed by him as mentioned in section 38 is a category which is not free from doubt. The case of this category of persons is relatable to the provisions of section 25 of the Act, 1990. As adumbrated, the Commissioner may direct an investigation or inquiry to be held upon sufficient evidence showing that a registered person is involved in tax fraud or evasion of tax. This is the only provision perhaps in the Act, 1990 which relates to the involvement of a registered person in tax fraud or evasion of tax. Such an opinion can be formed by the Commissioner upon the coming into his hands of any record or documents maintained by a registered person. Upon the formation of such an opinion, the Commissioner may direct an inquiry or investigation under section 38 to be held. This is precisely the inquiry and investigation contemplated by section 38 while referring to it as one of the categories of persons in respect of whom a notice under section 38 may be served. Therefore, this is the only instance where the provisions of section 38 have a close nexus with the provisions of section 25 and both these provisions are to be read inextricably. In all other cases of categories of persons, section 38 is an independent self-executing provision and can be set in motion without recourse to section 25 of the Act, 1990. By way of elaboration, it may be stated that in case there are allegations of tax fraud or evasion of tax, the provisions of section 38 cannot be invoked unless an opinion has been formed under section 25 by the Commissioner concerned,”
In the above judgment it has clearly been observed by the Hon’ble
High Court, Lahore that where there are allegations of tax fraud and evasion of
tax, the provision of section 38 cannot be invoked unless an opinion has been
formed under section 25 by the Commissioner concerned. In the instant case,
admittedly, the independent opinion under section 25 by the concerned
Commissioner IR is missing. Thus, all the proceedings are illegal and void
ab-initio in light of the aforesaid judgment.
9. The
exercise of jurisdiction by an authority is a mandatory requirement and its
non-fulfillment would entail the entire proceedings to be “coram non-judice”.
Any transgression of such jurisdiction for not being a technical defect would
render the entire exercise of authority to be ab-initio, void, and illegal. In
the case titled Collector of Customs, Model Customs Collectorate Vs M/s Kapron
Overseas Supplies Co., (Pvt) Ltd,(2010 PTD 465), the question was
raised as to whether the passing of order without jurisdiction is a technical
defect and does not render the proceedings as ab-initio void. The Hon’ble High
Court dismissed the reference application while holding that any transgression
of such jurisdiction for not being a technical defect would render the exercise
of authority to be ab-initio, void, and illegal, without discussing the merit
of the case, which relates to the origin of imported goods and the Hon’ble High
Court further held that “the exercise of jurisdiction by an
authority is a mandatory requirement and its non-fulfillment would entail the
entire proceedings to be “coram non-judice”. The said defect renders
the show cause notice as well as Order-in-Original ab-initio, null and void by
virtue of suffering of lack of power/jurisdiction. Hence, coram non-judice
needs to be struck down.
For the foregoing reasons, the
mode and manner of the exercise of jurisdiction by the Commissioner IR under
section 38 do not meet the prescribed statutory criteria and as such the entire
exercise of the Commissioner is patently in violation of the law laid down by
the High Court in the judgment cited supra. It is trite law that all the
statutes are to be applied fairly and justly, the public functionaries are
under a constitutional mandate to be just and fair. It is an immutable principle
of law that defective assumption/exercise of jurisdiction
by the authorities is incurable. Reliance may be placed on Director
General Intelligence and Investigation FBR Vs Sher Andaz and 20 Others (2010 SCMR 1746), Director
General Intelligence and Investigation and Others Vs M/s AL-Faiz Industries
(Pvt.) Limited and others, PTCL 2008 CL 337(S.C) and Collector,
Sahiwal and 2 others Vs Muhammad Akhtar, (1971 SCMR 681).
10. The exercise of power under Section 38 of the
Act, a serious invasion is made upon the rights, privacy and freedom of the tax
payer, the power must be exercised strictly in accordance with the law and only
for the purposes for which the law authorizes it to be exercised. If the
action of the officer issuing the authorization or of the designated officer is
challenged, the officer concerned must satisfy the court about the regularity
of his action. If the action is maliciously taken or power under the section is
exercised for a collateral purpose, it is liable to be struck down by the
court. If the conditions for the exercise of the power are not satisfied the
proceeding is liable to be quashed. To avoid arbitrariness
and misuse of power on the part of tax officials, citizens have been provided with
the necessary protection, and thereby a balance has been struck by the
legislature. In the first instance, and this is essential to the proper conduct
of the inspection, the revenue must have reasonable cause for arriving at a
determination that particular premises ought to be visited to carry out a
section 38 inspection. The revenue cannot use section 38 to enter into given
premises without reasonable cause and then look for or create the cause to take
records and documents into custody. Reliance may be placed on the judgment
titled M/s Iqbal and Sons Vs Federation of Pakistan and three others,
PTCL 2017 CL 627(H.C). A perusal of the impugned purported authorization
reflects that it has been issued by the Commissioner IR in terms of powers
conferred upon him under section 38 of the Act. Besides this, there is nothing
in the authorization as to why it has been issued and whether the same has been
done on the basis of any information or directions or for that matter, in
respect of any pending proceedings. It is completely silent in all respects.
The heading of this Section states “Authorized Officer to have excess to
premises, stocks, accounts and record”, however, notwithstanding this, the
Section itself says that for any inquiry or investigation in any tax fraud under
the Act, the authorized officers may have free access to any premises. It leads
to the conclusion that this power can only be exercised when there are some
pending proceedings against a registered person/ person, and for one reason or
the other, there is an obstruction in the enforcement of such proceedings, and
as a last measure, again to enforce such proceedings resort is to be made to
enter and search the premises of the registered person/person. It is not that
without pendency of any proceedings and just in a cursory manner, at the whim and
desire of the Commissioner, the provisions of this Section can be invoked.
There is a prerequisite that it can only resort to enforce any proceedings,
hence; there must be some proceedings pending against the registered
person/person, enforcement of which was being obstructed, and therefore now
access and search of premises are inevitable. In fact, the power under Section
38 of the Act is ancillary in nature, and is not an independent function of
itself; and this leads to the conclusion that firstly, there must be some
pending proceedings; and secondly, the power is to be exercised by the Board or
Commissioner, who is otherwise competent and has jurisdiction in respect of
pending proceedings against the registered person. This appears to be a
conscious act that the legislature has restricted such powers of access and
raid with certain circumspection for enforcement of pending proceedings and not
otherwise. Having said that, one conclusion can be finally drawn that firstly,
the powers under section 38 are only to be exercised in respect of the enforcement
of any provision of the Act, and for that, there must be some pending
proceedings of which the enforcement has to be sought, and not for making a
roving or a fishing expedition or to conduct an investigation; and secondly,
since, this power of entering and making a search is an extreme action intended
to be taken against a registered person, infringing upon various Constitutional
rights, including the right of privacy and liberty of a person, the same must be
exercised in a manner that the rights of the registered person shall remain
safeguarded, as these powers are coercive, and therefore, shall be exercised
with care, circumspection and after a thoughtful decision.
The Hon’ble High Court, Lahore in the case of Pakistan
Chipboard (Pvt) Ltd Vs Federation of Pakistan and 5 others, (2015
PTD 1520) had the occasion to interpret the provisions of Section 38 (ibid) and
was pleased to hold as under:
“……………….. The letter relied upon the respondents do not satisfy
the specific conditions of section 40 of the Act. Admittedly at the time there
were no proceedings pending under the Act against the petitioner. Admittedly
there is no order explaining and detailing what documents or things were
required from the petitioner for which a search under section 40 of the Act was
necessary.”
11. We further find that the impugned order is a
non-speaking order, without reasonable cause and proper authorization, the
visit and all subsequent actions taken by the officers are entirely illegal and
without jurisdiction. How and on what basis did the learned Commissioner pull
the requirement to access records is not understandable. There is nothing on
the record to show that the visit on 28.03.2023 was conducted by an authorized
officer or that there was reasonable cause to conduct the visit. Mere reference
to credible information of massive tax evasion without offering the same for
review by the tribunal is not sufficient to support a finding that the impugned
action complied with the requirements of section 38. Likewise, in the context of the facts of the
present case, the authorization by the learned Commissioner of twelve persons
out of which (five) persons were officers of Inland Revenue in terms of section
30 of the Act below the rank of Assistant Commissioner and (six) persons were
from the lower staff i.e. Upper Division Clerks, Naib Qasid and Sepoy to
exercise the powers as envisaged in the provisions of section 38 of the Act is ab-initio
null and void. Not only their authorization was a nullity in the eyes of law
but also any action taken by them pursuant to the nomination was unlawful and
illegal. Section 38 of the Sales Tax Act, 1990 empowers the Board or the
Commissioner to authorize the only Officer of Inland Revenue to enter into the
premises of the registered person. When the said provision is read with section
25(2) of the Act it further clarifies that the authorization of an Officer of
Inland Revenue should not be below the rank of Assistant Commissioner for the
purpose of investigation under section 38.
12. For what has been discussed above, the
answer to question Nos. (i) and (ii) are in the favour of the appellant and against
the department.
13. As
far as questions Nos.(iii) and (iv), both are interlinked, therefore, the same
are dealt with together. Precisely, the team of officials authorized by the
Commissioner searched the business premises of the appellant on 28.03.2023, in
the course of which they broke open a room, seized and took away certain
records and books. Before dilating upon the proposed questions it would be
expedient to reproduce below the provision of section 40 of the Act:-
“Section 40:-Searches
under warrant. (1) Where any officer of Inland Revenue has reason to
believe that any documents or things which in his opinion, may be useful for,
or relevant to, any proceedings under
this Act are kept in any place, he may after obtaining a warrant from the
magistrate, enter that place and cause a search to be made at any time.
(2) The search made under section (1) shall
be carried out in accordance with the relevant provisions of the Code of
Criminal Procedure, 1898 (V of 1898).” (Emphasis supplied)
The above section clearly provides that where any
Officer of Inland Revenue has “reason to believe” that will be useful for or
relevant to any proceedings he may obtain a search warrant from the Magistrate
and carryout a search of “any place”. Such search shall be carried out in
accordance with Criminal Procedure Code, 1898. What is necessary for the search
warrant under Section 40 is that “a proceeding” under the Act is spending. As
per the provision of subsection (2) of section 40 ibid the search would be
carried out in accordance with the relevant provisions of the Code of Criminal
Procedure, 1898. Sections 51, 96, 98, and 165 of
the Code of Criminal Procedure contain such power. Section 96 authorises
search or inspection under and in accordance with a warrant issued by a court
having jurisdiction on its being satisfied that the circumstances in which it
may issue exist. One such circumstance is that a
person to whom a summons to produce a document or thing has been or might be
addressed, will not or would not produce as required. The scope of such warrant
as to the particular place to be searched may be restricted by the court under
Section 97. In certain circumstances, the specified Magistrates, may, under
Section 98, issue warrants authorising entry into and search and seizure in
houses of documents and things concerned with the particular offence or
suspected offence. Sections 101 to 103 make general provisions relating to
searches and prescribe the procedure to be followed in search and seizure. Such
warrants may be issued to any person including the police. During the investigation,
a police officer in case of urgency may, subject to the terms and restrictions
of Section 165, search and seize without a warrant and such restrictions
include the application, so far as may be, of Section 102 and 103 and the
further condition that copies of records made as required by Section 165 are
sent by the officer concerned forthwith to the nearest Magistrate empowered to
take cognizance of the offence and that the owner or occupier of the place
searched shall, on application, be furnished with a copy of the same by the
Magistrate. Section 51 empowers a police officer to search a person while
arresting him in connection with a cognizable offence. Schedule V to the Code prescribes
the form of a search warrant issued under Section
96 or 98. This form specifically shows that a search warrant includes the
power to seize specified articles and produce the same forthwith before the
court to which the warrant is returned. Under
Section 5(1), all offences under the Pakistan Penal Code should be
investigated, inquired into, tried, and otherwise dealt with according to the
provisions of the Code, and under Sub-section (2) all offences under any other
law should be investigated, inquired into, tried and otherwise dealt with
according to the same provisions but subject to the enactment for the time
being in force regulating the manner or place of investigating, inquiring into,
trying or otherwise dealing with such offences. Often fiscal statutes for their
effective enforcement create offences and make special provisions prescribing
the procedure for investigation, trial, and punishment. During the hearing of the
appeal, the learned assessing officer provided a complete record of search and
seizure. A perusal of the record firstly shows that there is no material
available on record which prima facie establish that such an inspection under
section 38 is warranted and secondly the search warrant issued by the
Magistrate is without application of mind. The power provided in section 40
must be used with great caution and satisfaction that there is sufficient
material to justify the measure. In the instant case, the assessing officer was
unable to provide any material evidence on record on the basis whereof he concluded
that the appellant is committing tax fraud and evasion of tax for which it was
necessary to access the business premises under section 38 read with section 40
of the Act. Before issuing a search warrant the Magistrate is bound to apply
his mind to the facts and weigh the circumstances and then make up his mind on
the application. Reliance is placed on the case titled Pagla Baba and Others
Vs The State, (AIR 1957 Orissa 130).
Further, the perusal of the search warrant issued by the Magistrate is without
giving any reasons this ground alone would vitiate the proceedings under
section 96, Cr.P.C. Non-giving reasons by Magistrate before issuance of
warrants would vitiate the order in the same manner as non-application of mind
would. Reliance may be placed on PLD 1998 Lah 35 wherein it
observed that:-
“14.
In Masood Qureshi's case PLD 1971 Lah 678 this Court took the view that a
Magistrate cannot issue a search warrant under section 96, Cr.P.C. unless he
examined the complainant. It is further held that there must be some material
available to a Magistrate to which he must apply his mind before issuance of the
search warrant and where he does not apply his mind such an order would certainly
stand vitiated. This view also finds support from Indian caselaw: S.
Sinagurunatha Pillary 11. Cr.L.I 535; and Hari Gharan Gorai and others v. Srish
Chandra Sadhukhan (11 CI.L.I 525). The application of mind, of course, can be
only judged from the reasons given. However, in a decision from Indian
jurisdiction reported as Manichlal Mondal and another v. The State AIR 1953
Cal. 341, it is observed that the Magistrate is not bound to record his
reasoning in writing before the issuance of a search warrant. All that the
section requires is that Magistrate must himself be satisfied that there is a necessity
for search warrants to be issued because the thing required would not- be
produced otherwise. On the contrary in Piyare Lal v. Thakar Dat Sharma (32 IC
652), it was held by the former Punjab Chief Court that the search warrants
issued by the Magistrate without giving reasons would vitiate the proceedings
under section 96, Cr.P.C.
15. In Masood Qureshi's case (supra) this Court disagreed with the view of the
Punjab Chief Court and adopted the view of the Calcutta Court. I reckon that
the view of the Punjab Chief Court is based on good reasons. Where the application
of mind is insisted upon by law, reasons have to be given to demonstrate the application
of mind. Non-giving of reasons by a Magistrate before issuance of warrants
would, therefore, vitiate the order in the same manner as nonapplication of
mind would.”
The record further shows that after impounding the
record from the business premises of the appellant it was incumbent upon the
assessing officer to produce the same forthwith before the court to which the
warrant is returned as required under the law which has not been complied with.
As stated above, Schedule V to the
Code prescribes the form of a search warrant issued under Section
96 or 98. This form specifically shows that a
search warrant includes the power to seize specified articles and produce the
same forthwith before the court to which the warrant is returned. For the
foregoing reasons, the answer to the questions Nos. (iii) and (iv) in the
negative in favour of the appellant and against the department.
14. The upshot of the above discussion is that
the impugned order passed under section 38 of the Act is illegal, void
ab-initio, and without jurisdiction is hereby annulled. Consequently, the
detention of records is illegal. Reliance may be placed on the judgment titled Muhammad
Azim Vs CIT, East Zone, Karachi (1991) 63 Tax 143(H.C Kar) wherein
it was held that: -
“It is a well-settled principle that if the
very foundation of an action is illegal or without jurisdiction the whole
superstructure built upon it cannot validly and legally stand.”
Under
the circumstance, the assessing officer is directed to return the record to the
appellant illegally impounded from the business premises of the appellant
forthwith and drop the proceedings initiated in pursuant thereto.
MA (Stay) No. 2606/LB/2023
15. Since the main appeal has been decided in the
earlier part of this order, therefore, the miscellaneous application for
interim relief has become infructuous and is hereby dismissed. Order
accordingly.
16. This order consists of (16) pages and each
page bears my signature.
Sd/-
(M. M. AKRAM)
Judicial Member
Sd/-
(CH.
MUHAMMAD TARIQUE)
Accountant Member
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