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Official Citation: 2026 IHC 258721
Court / Jurisdiction: Islamabad High Court
Parties: Attock Gen Ltd vs FOP & others
Ruling Summary: This decision was rendered by the Islamabad High Court, officially reported as 2026 IHC 258721. In this matter between Attock Gen Ltd and FOP & others, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Islamabad High Court (Honourable Mr. Justice Inaam Ameen Minhas, Honourable Mr. Justice Muhammad Azam Khan) AUTHOR JUDGE: Honourable Mr. Justice Inaam Ameen Minhas DECISION DATE: 29-APR-2026 CASE NO: Writ Petition-1756-2018 CITATION: 2026 IHC 258721 PARTIES: Attock Gen Ltd VS FOP & others LAW / SECTION: under Section 38B(1) of the Sales Tax Act, 1990 | under Section 72B or Section 25 of STA 1999 | under Section 11 of the STA 1990 | under Section 30 | under Section 2(18) | under Section 30 of the Act | SUBJECT: Tax & Banking, Other REMARKS: Tax Matter: Seeking direction to suspend the notice dated 21-03-2018, issued by Deputy Commissioner Inland Revenue. ============================================================ JUDGMENT SHEET ISLAMABAD HIGH COURT, ISLAMABAD JUDICIAL DEPARTMENT WRIT PETITION NO. 1756 OF 2018 ATTOCK GEN LIMITED VERSUS FEDERATION OF PAKISTAN, THROUGH SECRETARY FINANCE, AND OTHERS Petitioner by Sardar Ahmad Jamal Sukhera, Advocate Respondent No. 1 by Mr. Azmat Bashir Tarar, Assistant Attorney General Respondent No. 2 & 3 by Ch. Maznoor Hussain, Advocate Date of Hearing 07.04.2026 INAAM AMEEN MINHAS, J-. Through the instant constitutional petition, the petitioner has made the following prayer: - “i. Notice dated 21.03.2018 be declared without lawful authority, without jurisdiction and of no legal effect. ii. SRO No.450(1)/2013 dated 27.05.2013 may be struck down as being ultra vires the Sales Tax Act 1990 and the Constitution of the Islamic Republic of Pakistan, 1973.” 2. The facts, in brief, leading to the filing of the instant writ petition are that the petitioner is a public limited company duly incorporated under the law having its registered office at Morgah, Rawalpindi is engaged in the business of generation of electrical energy. Respondent No. 2/Deputy Commissioner Inland Revenue, Islamabad issued impugned notice dated 21.03.2018 for the production of documents/information under Section 38B(1) of the Sales Tax Act, 1990 (“STA 1990”) alleging therein that the Sales Tax Returns filed for the period July 2014 to December 2017 were analyzed to examine the aspect of irrelevant purchases, and the petitioner was required to explain its position on or before 06.04.2018. Uncertified 2 WP No.1756 of 2018 3. Learned counsel for the petitioner submitted that the impugned notice dated 21.03.2018 issued by the respondent No.2/Deputy Commissioner, Inland Revenue has been issued purportedly under Section 38-B of STA 1990, without fulfilling the statutory conditions prescribed therein. That a plain reading of the said provision makes it evident that the authority to call for records or documents can only be exercised where such material is considered necessary or relevant to an audit, inquiry, or investigation under the STA 1990, whereas for the relevant period, no audit, inquiry, or investigation is pending against the petitioner. That the impugned notice itself does not refer to any audit, inquiry or investigation and in absence of any such proceedings, which are pre-requisite, the invocation of Section 38-B is not justified. That no audit has been initiated under Section 72B or Section 25 of STA 1999, nor has any inquiry or investigation been commenced, thereby indicating that the foundational requirements of Section 38-B(1)(a) have not been satisfied prior to the issuance of the impugned notice. That the jurisdiction to exercise in respect of the petitioner’s sales tax matters was assigned to the Commissioner Inland Revenue, Zone-III, Large Taxpayers Unit, Islamabad, through a jurisdiction order dated 14.10.2015. That the authority to exercise powers in relation to the petitioner’s affairs was vested exclusively in the said officer, and any action taken by another officer would require clear legal authorization within the framework of STA, 1990. That respondent No. 2, not being the officer to whom jurisdiction was assigned, was not competent to issue the impugned notice, therefore, the impugned notice dated 21.03.2018 does not conform to the requirements of law and is liable to be declared without lawful authority and of no legal effect. Reliance has been placed on 1963 PTD 633, 2019 PTD 484, 2026 SCMR 300 and 2026 SCMR 105. 4. Learned counsel for the respondents, in opposition, submitted that respondent No. 2, acting under the authority under Section 11 of the STA 1990 issued the impugned notice dated 21.03.2018 solely to seek clarification regarding entries in the petitioner’s return. That various types of insurance services, such as life, motor, and asset cannot be properly assessed through return analysis alone. That such services are obtained for risk coverage rather than for the furtherance of taxable activity, and are therefore not admissible Uncertified 3 WP No.1756 of 2018 under Section 8 of STA 1990, hence, the petitioner vide impugned notice dated 21.03.2018 was required to explain the precise nature of the insurance services claimed. That the petitioner has an adequate and efficacious remedy available under the tax law, which has not been availed. That the relevant statute provides a complete and well-structured hierarchy of forums for the redressal of grievances, enabling the petitioner to seek appropriate relief through the prescribed mechanism. That such statutory forums are competent to examine both factual and legal aspects of the matter, and therefore constitute the proper avenue for adjudication. That where a comprehensive remedy is available under the law, the invocation of constitutional jurisdiction is generally discouraged, particularly when no exceptional circumstances have been demonstrated to justify bypassing the statutory framework, therefore, the present petition is not maintainable and is liable to be dismissed. 5. We have carefully considered the arguments advanced by the learned counsel for the parties and examined the contents of the petition as well as the para-wise comments submitted by the respondents. We have also reviewed the judgments cited by the learned counsel for the parties in support of their respective contentions. 6. The petitioner, through the instant proceedings, has, in essence, called into question the competence of respondent No. 2 to issue the impugned notice dated 21.03.2018, primarily on the premise that such authority could not have been exercised on the basis of a delegation made by the Commissioner Inland Revenue, Zone-III, LTU, Islamabad. Before adverting to the merits of this contention, it is appropriate to examine the statutory framework governing the appointment, jurisdiction, and powers of the Officers of Inland Revenue under the STA 1990. In this regard, Sections 30 and 31 are relevant, which are reproduced hereunder for ready reference:- “30. Appointment of Authorities. (1) For the purposes of this Act, the Board may, appoint in relation to any area, person or class of persons, any person to be: (a) a Chief Commissioner Inland Revenue; (b) a Commissioner Inland Revenue; Uncertified 4 WP No.1756 of 2018 (c) a Commissioner Inland Revenue (Appeals); (d) an Additional Commissioner Inland Revenue; (e) a Deputy Commissioner Inland Revenue; (f) an Assistant Commissioner Inland Revenue; (g) an Inland Revenue Officer; (h) a Superintendent Inland Revenue; (i) an Inland Revenue Audit Officer; (ia) an Inspector Inland Revenue; and (j) an officer of Inland Revenue with any other designation. (2) The Chief Commissioner Inland Revenue and Commissioner Inland Revenue (Appeals) shall be subordinate to the Board and Commissioner Inland Revenue shall be subordinate to the Chief Commissioner Inland Revenue. (2A) The Chief Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons or such areas as the Board may direct. (2B) The Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons or such areas as the Chief Commissioner, to whom they are subordinate, may direct. (3) Additional Commissioner Inland Revenue, Deputy Commissioners Inland Revenue, District Taxation Officer Inland Revenue, Assistant Commissioner Inland Revenue, Assistant Director Inland Revenue, Superintendent Inland Revenue, Inland Revenue Audit Officer, Inland Revenue Officer, Inspector Inland Revenue, and Officer of Inland Revenue with any other designation shall be subordinate to the Commissioner Inland Revenue and shall perform their functions in respect of such persons or classes of persons or such areas as the Commissioners, to whom they are subordinate, may direct. 31. Powers: An officer of Inland Revenue appointed under Section 30 shall exercise such powers and discharge such duties as are conferred or imposed on him under this Act, and he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him. Provided that, notwithstanding anything contained in this Act or the rules, the Board may, by general or special order, impose such limitations or conditions on the exercise of such powers and discharge of such duties as it deems fit.” Uncertified 5 WP No.1756 of 2018 7. A plain and textual reading of above referred Section 30 reveals that the Federal Board of Revenue (“FBR”) is vested with the exclusive authority to appoint Officers of Inland Revenue, while simultaneously retaining the power to define the scope of their jurisdiction in relation to specified areas, persons, or classes of persons. The statutory scheme further establishes a clear hierarchical structure, within which Commissioners Inland Revenue are empowered, subject to the control of the Chief Commissioner, to assign functional jurisdiction to subordinate officers. Thus, the delineation of jurisdiction, both territorial and personal, is not static but is structured through administrative allocation within the framework expressly sanctioned by the STA 1990. Complementing this scheme, Section 31 provides that every officer so appointed shall exercise such powers and perform such duties as are conferred upon him under the Act, thereby making the source of authority statutory rather than derivative. It is also pertinent to note that Section 2(18) defines an “Officer of Inland Revenue” as a person appointed under Section 30, thereby linking the identity of the officer directly with the statutory mechanism of appointment. At this stage, it would be appropriate to reproduce Section 11 of the Act, which governs the powers relating to assessment and recovery:- “11. Assessment of Tax and recovery of tax not levied or short- levied or erroneously refunded (1) Where a person who is required to file a tax return fails to file the return for a tax period by the due date or pays an amount which, for some miscalculation is less than the amount of tax actually payable, an officer of Inland Revenue shall, after a notice to show cause to such person, make an order for assessment of tax, including imposition of penalty and default surcharge in accordance with sections 33 and 34: Provided that where a person required to file a tax return files the return after the due date and pays the amount of tax payable in accordance with the tax return along with default surcharge and penalty, the notice to show cause and the order of assessment shall abate. (2) Where a person has not paid the tax due on supplies made by him or has made short payment or has claimed input tax credit or refund which is not admissible under this Act for reasons other than those specified in subsection (1), an officer of Inland Revenue shall, after a notice to show cause to such person, make Uncertified 6 WP No.1756 of 2018 an order for assessment of tax actually payable by that person or determine the amount of tax credit or tax refund which he has unlawfully claimed and shall impose a penalty and charge default surcharge in accordance with sections 33 and 34.” 8. When Sections 2(18), 11, 30, and 31 of the Act are read collectively, a coherent statutory design emerges, whereby Officers of Inland Revenue, irrespective of their rank, are vested with defined powers to carry out functions entrusted under the Act, including the issuance of notices as a necessary incident of assessment and enforcement proceedings. In particular, Section 11 explicitly contemplates the issuance of show cause notices by an Officer of Inland Revenue as a preliminary step towards the determination of tax liability. This authority is not contingent upon a separate or subsequent delegation but flows directly from the statute itself. Consequently, once an individual falls within the definition of an Officer of Inland Revenue under Section 2(18) and is duly appointed under Section 30, the powers exercisable by such officer including the issuance of notices are sourced in STA 1990 and form an integral part of the statutory functions assigned to that office. Viewed in the context of the present case, the petitioner’s objection rests on the premise that respondent No. 2/DCIR could not have issued the impugned notice dated 21.03.2018 in the absence of a specific delegation of powers by the Commissioner Inland Revenue. However, this contention does not align with the statutory scheme discussed above. Respondent No. 2, being a duly appointed Officer of Inland Revenue under Section 30 of the Act, derives his authority not from any subsequent or independent delegation, but directly from the provisions of the Act itself. The powers exercisable by such an officer including the issuance of notices in matters relating to assessment and verification are statutorily conferred and form part of the functions attached to the office. 9. In the circumstances of the case, the impugned notice issued to the petitioner for seeking clarification regarding certain entries in the return falls within the scope of functions that an Officer of Inland Revenue is competent to perform under the law. The mere fact that jurisdiction in respect of the petitioner may have been administratively assigned to a particular Commissioner does not negate or extinguish the statutory authority vested in Uncertified 7 WP No.1756 of 2018 subordinate officers working within the same organizational framework, particularly where such authority is exercised in accordance with the Act. Reliance is placed on a case titled The Commissioner Inland Revenue, Zone- III, RTO-II, Lahore Vs. M/s Hamza Nasir Wire and others” (2020 SCMR 1822), wherein the Hon’ble Supreme Court has conclusively settled the issue of delegation of powers. 10. We now turn to the contention advanced by the petitioner, wherein the impugned letter has been characterized as a “notice.” The respondents, however, have disputed this characterization and submitted that the petitioner has misconceived both the nature and legal effect of the communication dated 21.03.2018. As per respondents, the said letter does not partake the character of a “notice” in the sense of initiating any adverse or coercive proceedings under the law; rather, it is in the nature of explanation seeking clarification regarding certain entries reflected in the petitioner’s return. In this regard, the language employed in the impugned communication assumes significance. The direction therein “You are, therefore, required to explain your position (along with the copies of purchase invoices listed above) on or before 06.04.2018” plainly indicates that the petitioner was merely afforded an opportunity to furnish an explanation, without any determination of liability or initiation of penal consequences. The tenor of the communication, therefore, is facilitative rather than adjudicatory. 11. To properly appreciate the distinction, it becomes necessary to examine the legal connotation of the terms “notice” and “explanation.” The expression “notice,” as defined in Black’s Law Dictionary (2nd Edition, Henry Campbell Black, West Publishing Co., 1910, pp. 840–841), denotes “information or written warning, in more or less formal shape, intended to apprise a person of some proceeding in which his interests are involved.” The concept has also been elaborated in Judicial Dictionary (Justice L.P. Singh & P.K. Majumdar, 2nd Edition, p. 950), wherein it is emphasized that notice constitutes the first limb of the principle of audi alteram partem and must be precise, unambiguous, and determinative in apprising a party of the case he has to meet. Uncertified 8 WP No.1756 of 2018 The relevant portion of the Judicial Dictionary [2nd Edition, P 950], is reproduced as under: - “Notice (vb.): To give legal notice to or of the plaintiffs lawyer noticed depositions of all the experts that the defendant listed. To realize or give attention to the lawyer noticed that the witness was leaving. (See Black’s Law Dictionary, 7th Ed. at 1088). The adherence to principles of natural justice as recognised by all civilised States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity the order passed against the person in absentia becomes wholly vitiated. Thus it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fairplay. Another principle of natural justice is popularly known as rule against bias. A third one is that the party when requested should be given a copy of the order passed against him, containing the reasons for the adverse order. (Burhanuddin Hussain v. State of U.P., AIR 1970 AP 137 at 139). A person is said to have “notice” of a fact, when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it. Explanation I: Where any transaction relating to immovable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district or where the registered instrument has been registered under sub-section (2) of Section 30 of the Indian Registration Act, 1908, from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub- district any part of the property which is being acquired or of the property wherein a share or interest is being acquired is situated: Provided that— Uncertified 9 WP No.1756 of 2018 (1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908, and the rules made thereunder; (2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under Section 51 of that Act; and (3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under Section 55 of that Act. Explanation II: Any person acquiring any immovable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof. Explanation III: A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material: Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud. (See Transfer of Property Act, 1882, Section 3).” 12. In contrast, the term “explain” or “explanation,” as reflected in Oxford Paperback Dictionary & Thesaurus (3rd Edition, 2009, p. 303), conveys the act of making something clear, intelligible, or providing reasons for a stated position. For ease of reference, the text extracted from the relevant page is reproduced as under: - “Explain (verb): a technician explained the procedure: describe, give an explanation of, make clear/plain/intelligible, spell out, put into words, express in words; elucidate, expound, explicate, delineate; clarify, unfold, throw light on, clear up, simplify; gloss, interpret, decipher, decode, translate; demonstrate, show, teach, illustrate; unravel, untangle, resolve, solve; informal get across, get over. there was nothing in his file to explain his new-found wealth: account for, give an explanation for, give a reason for; justify, give a justification for, give an excuse/alibi/apologia for, make excuses for, explain away, rationalize, give a rationale for; defend, vindicate, legitimize, mitigate; rare extenuate. Explanation (noun): an explanation of the ideas contained in the essay: clarification, simplification; description, report, version, statement; elucidation, exposition, expounding, explication, Uncertified 10 WP No.1756 of 2018 delineation; gloss, interpretation, deciphering, decoding, translation, commentary, exegesis; demonstration, illustration; resolution, solution; informal the why and wherefore. I suppose I owe you an explanation about Louise: account, reason; justification, excuse, alibi, apologia, rationalization, rationale; defence, vindication, mitigation; rare extenuation.” 13. Similarly, Judicial Dictionary (Justice L.P. Singh & P.K. Majumdar, 2nd Edition, p. 680) describes an “explanation” as a clarificatory device intended to remove ambiguity or elucidate meaning, rather than to create substantive rights or obligations, in the following manner:- “Explanation: It is well-settled that explanation to a section is not a substantive provision by itself. It is entitled to explain the meaning of the words contained in the section or clarify certain ambiguities or clear them up. It becomes a part and parcel of the enactment. [Universal IMP (USSR) Electrical Ltd. v. Shiv Bihari, AIR 1997 MP 115 at 123].” 14. The same understanding is echoed in the Kitabistan New Millennium Practical Dictionary , where “explain” is defined as making one’s meaning clear or giving reasons for one’s conduct, and “explanation” as that which clarifies or renders something understandable, which is reproduced as under: - “explain (eks-playn) v.t. & i., tell the detailed meaning of, give reasons for, explain oneself: (a) make one’s meaning clear (b) give reasons for one’s conduct explain (something) away: show why one should not be blamed (for it) explanation (eks-pla-nay-shən): commentary; that which makes clear explanatory (eks-plan-a-tē-ri) adj: serving to explain; explanatory notes” 15. Viewed in light of these well-settled distinctions, the impugned communication cannot be elevated to the status of a “notice” in the strict legal sense. It neither apprises the petitioner of any definitive proceedings nor sets in motion any process leading to adverse consequences. Instead, it merely seeks Uncertified 11 WP No.1756 of 2018 clarification to enable the respondents to better understand the factual matrix before taking any further steps, if required. Consequently, the petitioner’s characterization of the impugned letter as a “notice” is not borne out by its language, purpose, or legal effect, which, in substance, remains that of a request for explanation rather than a formal notice preceding adjudication. 16. The jurisdiction of the High Court under Article…
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