Sindh High Court to Take Action Against Chief Commissioner of Corporate Tax Office

The Sindh High Court (SHC) will initiate proceedings against the Chief Commissioner of the Corporate Tax Office (CTO), Inland Revenue, Karachi if it is not satisfied with his conduct and response while finally deciding the petition regarding sales tax. According to an order from the SHC, it is concerning that, on the one hand, the provision for an appeal against a suspension order has been omitted by the Finance Act 2024. Instead, a revisional authority has been created under Section 21(5) of the Act. However, the authority itself does not want to work and decide the issue of suspension on the pretext that the blacklisting is still pending. Such conduct of the Revisional Authority does not appear to be in accordance with the provisions of Section 21(5) read with Section 21(2) of the Sales Tax Act in question. If that is the case, then they are barred from raising any objections regarding the availability of an alternate remedy in such matters. Pursuant to the order passed by the SHC, Zahid Masood, Chief Commissioner of the CTO, Inland Revenue, Karachi, is in attendance along with his counsel. Through this petition, the petitioner has challenged an Order in Revision (incorrectly referred to as a review order) whereby the Petitioner’s Revision Application under Section 21(5) of the Sales Tax Act, 1990, has been disposed of merely on the grounds that the concerned Commissioner, after suspending the sales tax registration, has initiated blacklisting proceedings that are pending. Hence, no final revisional order could be passed regarding the suspension of the sales tax registration, as the said proceedings have not yet reached a logical conclusion. At the same time, the Petitioner has been advised to approach the concerned Commissioner for a final decision on the blacklisting proceedings. The SHC is concerned that this contention of the Chief Commissioner, prima facie, does not appear to be correct, as there is only one remedy against an order of suspension of sales tax registration passed under Section 21(2) of the Act, which is by way of revision. This is against the order of suspension and blacklisting independently, not conjunctively, as interpreted by the Chief Commissioner. Moreover, a registered person cannot be left remediless against an order of suspension pending a final decision on the issue of blacklisting. It is also a matter of fact that for the suspension of a sales tax registration, a pre-suspension notice is issued, whereas for blacklisting purposes, a separate show-cause notice is issued. Therefore, this stance of the Respondents is also not justified. It is further noted that earlier, the suspension was challenged by way of petition No-D-697 of 2025, and the petitioner was confronted regarding the availability of the alternate remedy of revision. The Court was informed that the Chief Commissioner was not passing any orders. The said petition was disposed of on the assurance of the Chief Commissioner/Commissioner that a final speaking order would be passed within a week’s time. Thereafter, the impugned order in revision was filed, whereby no final decision has been taken. This conduct of the Chief Commissioner, if not contumacious, at least appears to be an attempt to deceive the Court by unnecessarily dragging the matter and leaving the Petitioner remediless until the blacklisting proceedings are finalized. He has been vested with these revisional powers to redress the grievances of aggrieved taxpayers, not to prolong their issues with such orders. The SHC has again directed the Chief Commissioner to personally attend the next hearing of the case on April 15, 2025.