LAHORE: The Lahore High Court held that it is mandatory for a tax officer to involve two or more respectable inhabitants of the locality to attend and witness the search operation and a copy of list of all articles taken into possession shall be prepared and delivered there and then.
The court observed that a revenue official is also required to obtain a search warrant first from a city magistrate before conducting research of premises. The court passed this order in a petition of Commissioner Inland Revenue (CIR) challenging the decision of Appellant Tribunal which vacated the order-in-original of assessing officer. The court upheld the decision of the Appellate Tribunal and said the tribunal rightly observed that no witnesses were associated with the seizure of record.
The court observed that it is also evident from the record that there has been a clear departure from the compliance of the procedure and law qua the impugned action. The court said the department while conducting raid and seizing the documents have not complied with the section 40 of the Finance Act in letter and spirit. The court said that counsel for applicant-department has also failed to pinpoint any illegality or legal infirmity in the impugned order.
The court held that the so-called recoveries cannot be used against the respondent.
The court commenting on the attitude of the revenue officials observed that no doubt, tax officials are empowered under the law and are duty bound to check tax evasion but, the evasion of taxes and duties is a contravention of law, which cannot be eradicated through commission of another illegality and contravention of law.
Copyright Business Recorder, 2025
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