The Taxpayers have an Inherent Right to Appeal without undue Financial Burdens --- Lahore High Court, Lahore set aside Conditional Stay Order of ATIR 

Islamabad 12-11-2024: In a recent judgment, the Lahore High Court has set aside conditional stay orders imposed by the Appellate Tribunal Inland Revenue, reinforcing that taxpayers have an inherent right to appeal without undue financial burdens. The case, filed under [W.P. No. 50303 of 2024], involved several petitions challenging the Appellate Tribunal’s requirement for partial tax payments as a condition for stay orders on tax recovery.

The Petitioners argued that Section 131(5) of the Income Tax Ordinance, 2001, which governs the Tribunal’s discretionary power to stay tax recovery, does not permit imposing such conditions. They contended that the Tribunal’s conditions obstructed their right to a fair appeal, creating financial barriers that compromised access to justice.

In its analysis, the Court contrasted Section 131(5) with Section 133(10), which requires a 30% tax deposit in certain cases of Lahore High Court Tax References. The Court found that this difference suggests a deliberate legislative intent to provide taxpayers with greater accessibility in Tribunal appeals, free from mandatory financial conditions. 

The Court cited several precedents, including Messrs Pak Saudi Fertilizers Vs. Federation of Pakistan and Z.N. Exporters (Pvt.) Ltd. Vs. Collector of Sales Tax, underscoring the principle that unrestricted access to justice is paramount in tax appeals. Mr. Justice Raheel Kamran noted that the Tribunal’s discretionary power should be applied without arbitrary conditions and emphasized that orders lacking sound reasoning do not meet judicial standards.

In the judgment, the Lahore High Court allowed the petitions, nullified the conditional stay requirements, and directed the Appellate Tribunal to decide the appeals within 30 days, reinforcing the need for prompt and fair resolution of tax disputes.

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