The Federal Board of Revenue (FBR) has delineated the powers of tax authorities to revise or modify orders under Section 11C of the Sales Tax Act, 1990, as updated up to June 30, 2021, incorporating changes introduced through the Finance Act, 2021. This section empowers tax officials to adjust assessments in light of legal decisions by higher courts or appellate bodies.
Section 11C specifically addresses the circumstances under which the Commissioner or an Inland Revenue officer can modify their orders when a legal interpretation of the law arises. This authority ensures alignment with judicial decisions while maintaining flexibility to adapt to reversals or modifications of such decisions.
Key Provisions of Section 11C:
1. Following Judicial Precedents:
o If a legal question is decided by a High Court or the Appellate Tribunal regarding a registered taxpayer, the Commissioner or Inland Revenue officer can adopt that decision in pending assessments for the same taxpayer regarding orders.
o This applies even if the FBR has appealed the decision or sought further clarification from a higher judicial authority.
o The adoption is valid until the decision of the court or tribunal is reversed or modified.
2. Authority to Modify Assessments Orders:
o Should the earlier judicial decision be reversed or modified, the tax authorities have the right to revise their prior assessments or orders to align with the updated decision.
o This modification is permissible even if the statutory limitation period for making such changes has expired.
o The revision must be made within one year from the date the updated decision is received.
Implications for Taxpayers:
This provision ensures that taxpayers benefit from legal interpretations favoring their case while allowing for adjustments if higher courts issue contrary rulings. It highlights the dynamic nature of tax administration and underscores the importance of judicial decisions in shaping tax practices.
However, taxpayers should remain vigilant about the time limits and procedural requirements for modifications to avoid disputes or misinterpretations.
Disclaimer:
The text of Section 11C is provided for informational purposes, as published by FBR and referenced by PkRevenue.com. While every effort is made to ensure accuracy, readers should verify details with official resources or consult legal experts to address specific concerns.
This section reflects the balance between judicial influence and administrative discretion in Pakistan’s tax framework.