This judgment will decide the titled writ petition filed by the Petitioner under Article 199 of the Constitution of Islamic Republic of Pakistan, 1973 (the "Constitution") against the impugned show cause notice dated 06.09.2024 issued by the Punjab Revenue Authority (the "Authority") under Section 52 of the Punjab Sales Tax on Services Act, 2012 (the "Act").
2. Hafiz Muhammad Idris, ASC submitted that the impugned show cause notice is illegal and without lawful authority because the relevant provision under which the same should have been issued, is Section 14 of the Act. He maintains that Article 10-A of the Constitution provides right of fair trial to every citizen of this country while under Article 4 of the Constitution it is an inalienable right of every citizen to be treated in accordance with law and no action
 

detrimental to his/her life, liberty, reputation or property shall be taken except as per law. He prays for setting-aside of the impugned show cause notice.
3. Arguments have been heard and record perused.
4. It is pertinent to mention here that in the judgment reported as Rahat Café, Rawalpindi versus Government of Punjab through Secretary Finance and others (2024 PTD 898), this Court has already interpreted provisions of Section 52 of the Act by observing that the officer concerned shall determine the tax liability after considering the objections of the person served with notice as per Sub-Section (3) of Section 52 of the Act. In this case, the Authority has straightway invoked the provisions of Section 52(3) before fulfilling the mandatory requirement of issuing a notice in terms of Section 52(1) of the Act, which clearly states that where by reason of inadvertence, error, misconstruction or for any other reason, any tax or charge has not been levied or has been short levied, the person liable to pay such amount of the tax or charge shall be served with a notice, within [eight] years of the relevant tax period requiring him to show cause for payment of the amount specified in the notice. Moreover, paragraph-3 of the impugned show cause notice only mentions that various services were obtained which were taxable as per provisions of Second Schedule of the Act and scrutiny of the Petitioner's taxpayer profile shows that it failed to clear its due tax liability, which is not valid reason to bound the Petitioner to deposit the due amounts of Punjab Sales Tax in lieu of the taxable services. The stance taken by Hafiz Muhammad Idris, ASC is that the Petitioner do not fall within the category of taxpayer rather it comes within the definition of a withholding agent for which relevant
 

provision is Section 14 of the Act, which is reproduced hereunder for ready reference:
"14. Special procedure and tax withholding provisions.—
(1) Notwithstanding anything contained in this Act, the Authority may, by notification in the official Gazette, prescribe a special procedure for the payment of tax, registration, book keeping, invoicing or billing requirements, returns and other related matters in respect of any service or class of services, as may be specified.
(2) Notwithstanding other provisions of this Act, the Authority may require any person or class of persons whether registered or not for the purpose of this Act to withhold full or part of the tax charged from such person or class of persons on the provision of any taxable service or class of taxable services and to deposit the tax so withheld, with the Government within such time and in such manner as it may, by notification in the official Gazette, specify.
Explanation: The word "charged" used in this subsection means and includes the tax liable to be charged under this Act or the rules made thereunder.
(3) Where a person or class of persons is required to withhold or deduct full or part of the tax on the provision of any taxable service or class of taxable services and either fails to withhold or deduct the tax or having withheld or deducted the tax, fails to deposit the tax in the Government treasury, such person or class of persons shall be personally liable to pay the amount of tax to the Government in the prescribed manner."
For further assistance a quick glance can also be taken on Section 14A of the Act, which reads as under:
"14A. Special procedure for collection of tax, etc.—
(1) Notwithstanding anything contained in this Act, the Authority may require any other person or class of persons, not necessarily being a service provider or a service recipient in a particular transaction, to collect full or part of the tax charged from another person or class of persons on the provision of any taxable service or class of taxable services and to deposit the tax so collected, in the Government treasury within such time and in such manner as the Authority may, by notification in the official Gazette, specify.
(2) For purposes of subsection (1), the special procedure prescribed for collection and payment of tax may also provide for registration, book keeping, invoicing or billing requirements, returns and other related matters in respect of any service or class of services, as may be specified.
 

(3) Where a person or class of persons is required to collect full or part of the tax on the provision of any taxable service or class of taxable services and either fails to collect the tax or having collected the tax, fails to deposit the tax in the Government treasury, such person or class of persons shall be personally liable to pay the amount of tax to the Government in the prescribed manner."

After perusal of the afore-quoted provisions of law, it will clarify that Sub-Section (2) of Section 14 of the Act discusses the powers of the Authority in connection with a withholding agent whereas Section 14A(2) of the Act describes a special procedure for collection and payment of tax in respect of any service or class of services, as may be specified but unfortunately, without first meeting the mandatory requirements of these provisions, straightway notice under Section 52 of the Act has been issued to the Petitioner.
5. Since the issue in this case relates to withholding tax and according to stance of learned counsel for the Petitioner, the same cannot be levied or collected under Section 52 of the Act, therefore, to better understand legal proposition involved in the matter, it would be appropriate if a minute comparison is made between the relevant provisions of law, the Act, which in this case are "Section 52" and "Section 14" of the Act. When a quick glance is taken on Chapter VIII of the Act, which also comprises Section 52, it would clarify that this Chapter describes the procedure regarding offences and penalties, including the procedure meant for (i) exemption from penalty and default surcharge and (ii) recovery of tax not levied or short-levied. Whereas, Section 14 comes within the purview of Chapter II of the Act, which is most relevant here because it mentions the scope of tax with charging sections/provisions by giving a complete mechanism regarding (i) person, who is liable to pay tax [Section 11]; (ii) liability of a registered person [Section 11A];
 

exemptions [Section 12]; (iii) effect of change in the rate of tax [Section 13]; (iv) special procedure and tax withholding provisions [Section 14]; (v) special procedure for collection of tax, etc. [Section 14A]; (vi) delegation of power to collect, administer and enforce tax on certain services [Section 15]; (vii) deduction and adjustment of tax on inputs to the business [Section 16]; (viii) certain transactions not admissible [Section 16A]; (ix) tax credit not allowed [Section 16B]; (x) extent of adjustment of input tax [Section 16C] and (xi) refunds [Section 16D].
6. It would also be beneficial to note here that in the judgment reported as Reliance Commodities (Private) Ltd. versus Federation of Pakistan and others (PLD 2020 Lahore 632=2020 PTD 1464) this Court has already defined the taxpayer and also vastly discussed his/her/its liabilities. In the said case, this Court has set-aside the show cause notice, being illegal and without lawful, after discussing in detail (a) the principles for issuance of a show cause notice; (b) relevant law and (c) the jurisprudence developed by superior Courts of the country on different occasions. Paragraph-52 of this judgment, which discusses scope of a show cause notice, is reproduced as under for ease of the matter:
"52. Moving further, it is reiterated that the Courts in the afore referred cases have held that issuance of a show cause notice is itself a complete act and decision which could be subject to judicial review if inter alia, the show cause notice was not lawfully issued by the competent authority, if the issuance of the show cause notice was ultra vires the relevant law and if the issuance of the show cause notice was without jurisdiction or with mala fide."

In another judgment reported as Chenab Flour and General Mills versus Federation of Pakistan and others (PLD 2021 Lahore 343), the rights of a taxpayer have been further elaborated by this Court by discussing in detail legal anthropology of the Federal Board of
 

Revenue under provisions of the fiscal laws prevailing in Pakistan. Relevant part from parataph-26 of this judgment reads as under:
"…the Court never shy away from striking down any notification, which is contrary to law, beyond the scope of parent legislation or abridged or take away any of the fundamental right granted and guaranteed under the Constitution yet if the right of taxpayer is not abridged and his only objection rests upon the parameters of inconvenience then the Court must look objectively towards the collective good of the people, which ultimately includes the petitioner as well. The revamping and restructuring of the FBR tax administration in the form of establishing the LTO to deal only with specified category of cases, including of Petitioners, is in no way detrimental to the Petitioners' rights recognized under the law and the Constitution and therefore the Impugned Notification cannot be done away with in the Constitutional Jurisdiction being unfounded on any of the grounds provided as a test to do so in this regard."

The concerned authority, while issuing the impugned show cause notice, has ignored the principle of fair trial and due process as envisaged under Article 10-A of the Constitution, scope of which has recently been further expanded by the Supreme Court of Pakistan in the case of Federal Government Employees Housing Authority through Director General, Islamabad versus Ednan Syed and others (PLD 2025 SC 11) in which it has been held that:
"…Article 10A of the Constitution requires that everyone is entitled to a fair trial and due process, which includes the basic right to be heard. The principle of ‘audi alteram partem' is one of the foundational principles of natural justice. It necessitates the requirement of being heard so that the judicial order reflects the contention of every party before the court. To fulfill the requirements of being heard, it is settled that the relevant party must be issued first a notice and then be allowed a hearing. These two (notice and hearing) are basic pre- requisites, which satisfy the test of being heard as well as fair trial and due process within the ambit of Article 10A of the Constitution…"
Moreover, Article 4 of the Constitution clearly states that it is an inalienable right of every citizen to be treated in accordance with law
 

and no action detrimental to his/her life, liberty, reputation or property shall be taken except as per law. No public functionary/authority is allowed, under the Constitution, to act in a manner infringing upon fundamental rights or exceeding statutory limits, as has been held by the Supreme Court of Pakistan in various cases, from time to time.
7. In Reliance Commodities Case (supra) (PLD 2020 Lahore 632), this Court has already held that tax laws are divided into parts in the form of various Chapters, which also include Definition Sections, Charging Sections, Collection Sections, Recovery Sections and some other miscellaneous Sections in which the purpose as well as method regarding assessment (of tax) has been specifically provided. If this view is read with the Doctrine of Textualism developed by this Court in the case of Service Global Footwear Limited and another versus Federation of Pakistan and others (PLD 2023 Lahore 471) then it would also clear that a statute should be interpreted according to its plain meaning and not as per the intent of the legislature, the statutory purpose or the legislative history. The Court is unequivocal to hold that the notice under Section 52 of the Act is not maintainable when clear provisions of Section 14 of the Act have been provided, as mentioned above. This is also to be noted that Section 14 and Section 14A [which was inserted on 15.06.2017 through Punjab Finance Act, 2017 to provide further clarification] are given under Chapter II (Scope of Tax) as such, these two Sections, being special provisions, are to be first invoked by concerned authority because the same are main Sections of the law/Act, not the ancillary or auxiliary Sections, as developed by the Supreme Court of Pakistan on different occasions. But when compared to Section 52 of the Act, which has also been discussed
 

above, it comes under Chapter VIII of the Act (Offences and Penalties), which is not a direct provision to issue the impugned show cause notice, thus, the same cannot be straightaway invoked.
8. In view of the above, stance of the Petitioner that since it is a withholding agent and not covered within the definition of a taxpayer, therefore, it should first be dealt with under the provisions of Section 14 of the Act, has some legal force. This writ petition is, therefore, allowed based on the principles laid down in the aforesaid judgments, which are binding on all the authorities under Article 201 of the Constitution, and the impugned show cause notice is set-aside. A copy of this writ petition alongwith all the annexures be remitted to the Respondent No.3/Additional Commissioner, Punjab Revenue Authority, Rawalpindi, who will consider it as a representation of the Petitioner and decide the same, after providing proper hearing to all concerned including the Petitioner, strictly as per relevant provisions of the Act [specifically Sections 14 and 14A], through a speaking order, within four weeks from the receipt of certified copy of this order.
 

Petition Allowed