LHC quashes Rs407m notices to Ittefaq, Kashmir sugar mills

LAHORE: The Lahore High Court Tuesday quashed Rs 407 million sales tax notices issued to Ittefaq Sugar Mills and Kashmir Sugar Mills and directed the Inland Revenue Tribunal of Federal Board of Revenue to decide the case afresh. 

The mills’ owner Tariq Shafi contended in his petition that the FBR sent them sales tax recovery notice for maintaining sugar stock in 2011. The petitioner’s counsel argued that the FBR issued tax recovery notices without proper assessment and any prior notice to the mills’ management. 

He said the notices were challenged before the Inland Revenue Tribunal that suspended the tax recovery but directed the mills to deposit 30 per cent amount of the assessed tax with the government. The counsel said the tribunal’s decision was beyond its jurisdiction. He asked the court to set aside the impugned notices for being legally defective. The board’s counsel told the court that the notices were issued after appropriate assessment. 

Justice Shahid Karim set aside the impugned notices and the decision with direction to the tribunal to decide the matter afresh within two months. The judge also restrained FBR from taking any coercive measure against the petitioner.