Sindh High Court to Take Action Against Chief Commissioner of Corporate Tax Office
The Sindh High Court (SHC) has resolved to take action against the Chief Commissioner of the Corporate Tax Office (CTO) in Karachi if his behavior does not change in handling a sales tax petition. The SHC is not impressed with the Chief Commissioner’s replies and demeanor on the suspension of sales tax registration.
In its ruling, the SHC also raised eyebrows at amendments to the Finance Act of 2024, which struck out the appeal option against a suspension order and established a new revisional power under Section 21(5). But the authority has yet to act, citing the process of blacklisting as still in the pipeline. The Court is of the view that this is not in line with the provisions of Section 21(5) of the Sales Tax Act, and thus the Chief Commissioner cannot invoke this reason to refuse to determine the suspension.
Chief Commissioner Zahid Masood, who was present with his counsel in court, presided over the case. A petitioner had moved an application questioning an Order in Revision (titled as a review order incorrectly). The petitioner contends that the suspension of sales tax registration was handled wrongly. It is contended by the Chief Commissioner that proceedings for blacklisting are pending, which has slowed down the determination of a final decision regarding the suspension of sales tax registration.
Nonetheless, the SHC refutes this reasoning. The Court indicates there is a single avenue through which to dispute a suspension order: revision, and not sitting around for blacklisting proceedings to finish. A human being should not be rendered solutionless because blacklisting remains pending. To add, suspension and blacklisting are two different processes that are not supposed to be interconnected in the manner in which the Chief Commissioner has intertwined them.
The SHC also observed that a pre-suspension notice is necessary in case of suspension of sales tax registration, but a different show-cause notice has to be issued for blacklisting. Hence, the Chief Commissioner’s delay is not warranted.
This issue was raised before in a previous petition, where the Chief Commissioner promised to decide within a week. However, no decision was made, leading to further delays. The SHC now suspects that the Chief Commissioner is intentionally delaying the matter, leaving the petitioner without a solution. The Chief Commissioner’s role is to resolve tax issues efficiently, not to prolong them.
The SHC directed the Chief Commissioner to in court on April 15, 2025, to justify his actions.
