Federation of Pakistan v. Muhammad Hussain (2019 SCMR 1234) is a landmark Supreme Court case in Pakistan that dealt with the issue of additional tax imposed under Section 11 of the Sales Tax Act, 1990.

Case Facts in 2019 SCMR 1234

The respondent, Muhammad Hussain, was a taxpayer who was required to pay sales tax on his taxable supplies. However, he failed to pay the due tax, and as a result, the Federal Board of Revenue (FBR) imposed additional tax under Section 11 of the Sales Tax Act, 1990.

Issue in 2019 SCMR 1234

The main issue in this case was whether the imposition of additional tax under Section 11 of the Sales Tax Act, 1990, was lawful.

Decision of 2019 SCMR 1234 Case Law

The Supreme Court of Pakistan held that the imposition of additional tax under Section 11 of the Sales Tax Act, 1990, was lawful. The court observed that the provision of additional tax was enacted to ensure compliance with tax laws and to prevent tax evasion.

Reasoning

The court relied on the following reasoning to arrive at its decision:

1. Legislative Intent: The court observed that the legislative intent behind Section 11 of the Sales Tax Act, 1990, was to impose additional tax on taxpayers who fail to pay their due tax.
2. Tax Evasion: The court noted that the imposition of additional tax was necessary to prevent tax evasion and to ensure compliance with tax laws.
3. Procedural Fairness: The court held that the respondent had been given adequate opportunity to contest the imposition of additional tax and that the procedure followed by the FBR was fair and transparent.
Impact

The decision of the Supreme Court in this case has significant implications for taxpayers in Pakistan. It emphasizes the importance of complying with tax laws and paying due tax on time to avoid imposition of additional tax.