4729/2021 Const. P. Wazir Ali Ind Ltd (Petitioner) V/S Fed. of Pakistan and Others (Respondent)
Sindh High Court
Bench: Hon'ble Chief Justice Mr. Justice Muhammad Shafi Siddiqui(Author), Hon'ble Mr. Justice Agha Faisal(Author)
Order Date: 20-DEC-21
Since 2010, Commissioner entrusted with the mandate of calling the record as and when required. Now one thing is for sure that this "as and when required" is not meaningless as being consistently followed and maintained throughout. We now need to understand what could be the event or stage when this phrase may come into play and be given some meaning. Eventually when a Commissioner examines the return of a tax payer, he may have some queries which might be tempting to call record as he may not be able to reconcile and/or resolve them through return statement. Those queries must be understood and settled to the satisfaction of the commissioner before he could make up his mind further. Now the audit is nowhere in the scheme when such questions came for consideration after going through the returns while the Commissioner acts under 25(1) of Sales Tax Act, 1990. Surely the record may satisfy the curious mind but queries must be genuine at the time of calling the record which could not have been answered without going through the record required. Therefore, record calling could not be a roving exercise and cannot be a courtesy call either. The phrase "as and when required" had remained part of Section 25 throughout ever since it was introduced. It is not "as and when desired" but "as and when required". Therefore, the reasons in the shape of "mindful queries" must be in existence and disclosed before calling record for the fulfillment of requirement "as and when required". The requirements of 25(1) are neither unfettered nor are so liberal that a hunting expedition would commence. It is the periodical transfiguration of the provisions of Section 25 that led us believe that there has to be an event or occasion when the Commissioner required the record and documents maintained under this Act or any other Act. Even requiring the documents/record for satisfaction of queries must be revealed so that notice may not transform into a hunting time. However, if the mindful queries were not met, he may authorize an officer of the Inland Revenue, on the basis of record obtained under subsection (1) by him, to conduct audit. Now, if the officer of the Inland Revenue subordinate to the Commissioner is under the obligatory command of Commissioner to conduct audit then the Commissioner must disclose the discrepancies he found while forwarding record already obtained by him, for audit be conducted in pursuance of the queries of the Commissioner, which queries must see the daylight so that the officer of the Inland Revenue proceed accordingly. The officer of the Inland Revenue on his own without having knowledge of discrepancies, queries of the Commissioner, cannot start the proceedings of audit which has to be under the authorization. It would only be general audit but not as contemplated under section 25(1) which compelled the commissioner to call record. The authorization thus should contain the reasons and mindful queries required to be processed through the audit which he has passed on to designated officer. Thus, insofar as Section 25 is concerned, we would conclude that for purposes of Section 25(1) Commissioner must frame legitimate mindful queries to the knowledge of a taxpayer after going through the returns which must be either be satisfied after calling the record or otherwise.Full judgment text for this case is not yet available on Pakistan Law Reports. Check the official Sindh High Court case law portal for the complete order.
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