RAWALPINDI: Lahore High Court (LHC) Rawalpindi bench on Wednesday set aside notices issued to dozens of eateries in the garrison city by the Punjab Revenue Authority (PRA) for the recovery of billions of rupees in taxes.

PRA issued show-cause notices to restaurants, marriage halls and hotels located in Rawalpindi district.

A total of 40 restaurants, including Saffron, Mikong, Saffilo, Altaf Restaurant, Al-Sheikh Tikka, Kentucky, Red Onion, Mian Jee Restaurant, Butt Karahi, Data Kabana, Rahat Café, Khyber Shinwari, Shensha Tikka, and others, had filed separate petitions against the PRA notices.

The notices were issued under Section 24(2) of the Punjab Sales Tax on Services Act, 2012, by the additional commissioner, Punjab Revenue Authority, finance department, Government of Punjab.

Counsel for the petitioners argued that the restaurants, hotels and marriage halls were taxpayers and had regularly been paying taxes, but the estimate given was based on assumptions, which was contrary to the data already provided by the petitioners in their returns under Section 35 of the Act.

Counsel for the PRA, on the other hand, filed reports and parawise comments and defended the impugned notices by stating that the same had been issued due to concealment of sales and short payments of tax due.

Subsequently, the court ruled that the “impugned notices” are without the strength of due inquiry, and the petitioners have not been afforded the opportunity of hearing, and the objections raised by them in their respective replies have not been given due consideration.

Justice Hassan ruled: “Therefore, the “impugned notices” cannot be allowed to breathe in the field anymore. Consequently, all the writ petitions are allowed, and the “impugned notices” are hereby set aside.”

Published in Dawn, April 25th, 2024