The Peshawar High Court has temporarily stopped authorities from collecting a disputed 3% additional tax from a steel industry petitioner.
A two-member bench headed by Justice Ijaz Anwar heard the petition challenging the collection of the additional tax and restrained the relevant authorities from recovering the disputed amount until further orders.
As part of the interim arrangement, the court directed the petitioner to submit a post-dated cheque.
The court has also issued notices to the Federal Board of Revenue (FBR) and other respondents, directing them to submit their replies within two weeks.
Steel company challenges additional tax
During the hearing, the petitioner’s lawyer argued that the company was being subjected to an additional 3% tax on raw materials imported for consumption.
According to the counsel, the additional tax was imposed due to alleged inactivity or technical issues involving the FBR’s IRIS tax system.
The lawyer maintained that the company should not be penalized because of a technical or administrative problem with the tax system.
The petitioner also told the court that it was already fulfilling its tax obligations under the applicable law and had been regularly paying the required taxes.
Despite this, the company was facing collection of the additional 3% tax, which it challenged before the Peshawar High Court.
Court provides interim relief
After hearing the arguments, the court ordered the authorities concerned to stop recovering the disputed tax for the time being.
The interim order will remain in place until further proceedings in the case, providing temporary relief to the petitioner while the court examines the legal issues involved.
The court’s order also requires the petitioner to submit a post-dated cheque as part of the interim arrangement.
FBR asked to respond
The Peshawar High Court has formally served notices on the FBR and other parties involved in the case.
The respondents have been given two weeks to submit their responses to the petition.
The case will proceed after the responses are received, with the court expected to examine whether the disputed 3% additional tax can legally be recovered under the circumstances described by the petitioner.
For now, the court’s interim order prevents the relevant authorities from collecting the disputed amount from the petitioner.
Also read: FBR Considers Ending Super Tax and Cutting Sales Tax
