KARACHI: Karachi International Container Terminal (KICT) approached the Sindh High Court (SHC) and filed a constitutional petition against issuing a show cause notice for recovery of federal excise duty (FED) by Deputy Commissioner Inland Revenue Unit-2, Enforcement-II, Large Taxpayers Unit (LTU).
On 28 November 2020, counsel for the petitioner stated that petitioner received illegal and unconstitutional show cause notice dated Nov 20, 2020 issued by Deputy Commissioner Inland Revenue Unit-2, Enforcement-II, Large Taxpayers Office seeking to collect Federal Excise Duty (FED) on franchise services for tax period Nov 2015 to June 2016.
He further stated that the impugned notice alleged that a scrutiny of petitioner’s income tax returns has revealed that it has rendered excisable services covered by serial no 14 of table-II, first schedule to the federal excise act, 2005 and has allegedly failed to make payment of FED, therefore, the same be recovered under section 14 (1) of the act, 2005.
Counsel argued that the impugned notice is tainted and unconstitutional, the federal respondents cannot recover FED on the rendering or provision of services, this issue has already been decided by this court dated June 02, 2016 in Pakistan International Freight forwarders association.
He further argued that the court has declared that the provisions of act 2005 insofar as they related to the providing or rendering of services are ultra vires the constitutional, respondent has, therefore, issued the impugned notice without lawful authority and in utter disregard of this court’s judgement.
Citing Secretary Ministry of Finance, Chairman FBR, CIR Enforcement-II, DCIR, Unit-2, Enforcement-II and Chairman SRB as respondents, petitioner pleaded the court may declare that the impugned notice dated Nov 20, 2020 is without jurisdiction, void ab initio, ultra vires the constitution and of no legal effect.
