The Islamabad High Court (IHC) has granted temporary relief to the Lost Tribe restaurant in Islamabad, barring the Federal Board of Revenue (FBR) from taking any coercive action against the establishment. This decision follows the sealing of the restaurant’s premises over allegations of non-issuance of verified sales tax invoices by a Tier-I retailer.
The IHC has also summoned the Chief Commissioner and Commissioner of the Regional Tax Office (RTO) Islamabad to explain why the restaurant was classified as a Tier-I retailer. The restaurant has clarified in court that, while it provides services, it does not meet the definition of a Tier-I retailer under the Sales Tax Act, 1990.
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The case stems from a raid carried out on January 27, 2025, when the Lost Tribe restaurant in Sector F-11 was sealed for issuing three unverified debit/credit card receipts, which are not considered invoices under Sales Tax Rules, 2006. The IHC’s order points out that, even if the restaurant were to be considered a Tier-I retailer, proper procedures should have been followed before sealing the premises. The restaurant claims that it was not given a fair hearing, and the sealing action violated its right to natural justice.
While the restaurant sought de-sealing, it had to pay Rs. 500,000 and Rs. 2.5 million under protest, though no formal order was issued to justify these payments.
The IHC has scheduled a hearing for February 4, 2025, where the respondents are required to submit reports and appear in person to explain the situation. Until the next hearing, the FBR is prohibited from taking further action against the restaurant.
