PESHAWAR: The Peshawar High Court has declared the collection of pay orders by the FBR from taxpayers of erstwhile FATA/PATA as illegal and ordered its immediate stoppage and allowed the FBR to collect post checks instead.
The Peshawar High Court, while pronouncing its judgment on a petition filed by M/s Taj Vegetable Oil Processing Unit Pvt. Ltd. and others, remarked that the collection of pay orders from taxpayers of erstwhile FATA and PATA as sales tax affects their right to exemption.
Advocate Ishaq Qazi, appearing for the petitioner, told the court that income tax or sales tax laws were never imposed in erstwhile FATA and PATA. The advocate further said that even after the amendment in the laws in 2018, when these tax laws were imposed in these areas, the government had exempted them from these taxes, which is still applicable.
The advocate said that earlier the tax authorities used to take post-dated cheques from the taxpayers instead of paying sales tax, but now they have made pay orders mandatory, which is against the exemption.
After hearing the arguments, the court ruled that the condition of pay orders in the Sales Tax Act is a violation of the laws and therefore it is abolished. In its order, the court said that the tax authorities should return the pay orders received from the taxpayers and instead receive post-dated cheques.
