November 29, 2021

FBR Can Issue Tax Notices Only Within 5 Years Of Due Date: Supreme Court

During the hearing of a sales tax compliant filed by a private company against the FBR in the Supreme Court on Friday, the Supreme Court made it clear that the FBR can issue a sales tax notice to any company only within five years starting from the due date. The counsel for the FBR Barrister Umer said that the company started filing taxes in 2009 and had not given taxes from 2001 to 2005. This angered the Justice Atta Bandial, who said that the company is coming to pay taxes and the FBR is demanding that the company pays its previous taxes first, which were missed due to the negligence of the FBR in the first place. The judge said that steps like these by the government bodies are forcing the companies to go out of country to Bangladesh or somewhere else, as running business in Pakistan is too much difficult. He added that the FBR has awaken from a deep sleep in 2016 (the year of filing of the case) to realize that the company has not paid its taxes in 2001 and 2006. The FBR lawyer said that the case was initiated in 2013 and the investigation took a further 3 years. The judge replied that the court could not do anything in that regard and would have to follow the law regarding such cases. He then said that the FBR could only issue sales tax notices within a time limit of 5 years. The court then dismissed the notice issued by the FBR, terming it as illegal.

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