Commissioner Inland Revenue Vs RIY Metals Recycling (Pvt) Limited etc

Form No:HCJD/C-21

ORDER SHEET

IN THE LAHORE HIGH COURT

LAHORE.

JUDICIAL DEPARTMENT

Case No:STR No.52511/2025.

CIR Vs. M/s RIY Metals Recycling Pvt. Ltd. Etc.

S. No. of Date of Order with signature of Judge, and that of parties or counsel, order/ order/ where necessary.

Proceeding proceeding

16.09.2025. Syed Zain-ul-Abidien Bokhari, Advocate for the applicant.

This reference application has been filed under section 47 of the Sales Tax Act, 1990 (Act) against the order dated 20.05.2025 (impugned order) passed by the Appellate Tribunal Inland Revenue (Tribunal).

2.Admittedly through impugned order, the matter has been remanded by the Tribunal to the Adjudicating Officer for factual verification. The learned counsel for the applicant at the very outset questioned that how this reference application is maintainable against the remand order. The learned counsel in response submits that as the matter has been decided on merits, therefore, this reference application is maintainable.

3.Arguments heard. The relevant part of the Tribunal’s order is reproduced hereunder:-

“In such circumstances we are of the view that the matter must be remanded to the Adjudicating Officer for factual verification. If the appellant is indeed using imported raw material then the ratio of the above- mentioned Tribunal decisions would squarely apply and SRO 501(I)/2023 would not be applicable. However, if the appellant is using locally produced raw material then there is no cavil to the proposition that the Board had the authority under the first proviso to section 2(46) to fix the value of supply and the SRO would apply in full force [2021 PTD 587 Lahore: M/s Pattoki Sugar Mills Limited Vs. Federation of Pakistan].

4.On the face of it, the Tribunal remanded the matter to the Adjudicating Officer for factual verification and to determine

whether respondent is using imported raw material or locally produced raw material in order to determine that which provision of law will be applicable to the respondent assesse. No question of law arises from the aforesaid remand order as the matter has been remanded to the Assessing Officer for fresh appraisal and the Tribunal having not given any conclusive finding against the applicant department, there is no final order holding the field which could be said to have given rise to any question of law for determination by this Court. The matter is wide open which will be decided by the Assessing Authority including factual verification after giving applicant department and respondent assesse full opportunity to participate in the proceedings and thereafter the matter will be matured for expression of opinion by this Court if need be.

5.The proposition of law has also been settled through authoritative pronouncements that reference is not maintainable in respect of remand order passed by the Tribunal. In this context some of the cases and legal proposition laid down therein is reproduced as under:-

Haji Muhammad Yousaf vs. Commissioner of Income Tax and Wealth Tax Companies Zone, Faisalabad (2006 PTD 72). In this case the Division Bench of this Court while dealing with the issue observed as under:- “Remand order of Appellate Tribunal – Validity – Such order would not give rise to a question of law to be considered by High Court.”

M/s E.M. Oil Mills and Industries Ltd. Vs.

Commissioner of Income Tax (2001 PTD 2708). In this case the Division Bench of Sindh High Court held as under:-

“In the present case as well by way of impugned order, the ITAT has remanded case

to the Taxation Officer with the direction to summon the purchaser and confront them after providing reasonable opportunity of hearing and that the applicant is also directed to provide complete details of the Taxation Officer and that the Taxation Officer finalize the assessment as soon as possible. Thus, the assessment order is yet to be finalized. Hence, the present reference is premature and misconceived, therefore, dismissed on this fundamental score also in limine, however with no order as to costs.”

The Commissioner of Income Tax, Central Zone’B’, Karachi vs. Messrs Electronic Industries Ltd. (1988 PTD 111). In this case a Division Bench of Sindh High Court headed by Mr. Justice Ajmal Mian (as his lordship then was) while dealing with a similar proposition observed as under:-

“It is admitted position that at present there is no assessment order in the field and the question in issue is to be decided by the Income Tax Officer in terms of the above quoted observation. In our view the reference is misconceived.”

Similar view was also expressed in Islamabad and 3 others vs. the Income Tax Officer and others (2000 PTD 306), Dr. Abdul Rauf Hamid vs. commissioner of Income Tax, Faisalabad (65 Tax 207). M/s Bostan International vs. Commissioner of Income Tax and Wealth Tax, Sialkot Zone vs. Commissioner of Income Tax, Zone C, Karachi (2010 PTD 1275), Commissioner of Income Tax and Wealth Tax, Sialkot Zone vs. Messrs Maqsood Ahmad Gill (2007 PTD 1757) and Commissioner of Income Tax vs. Bihar Alloy Steels Ltd. (1995 PTD 1189).

6.The ratio laid down in the afore-noted judgments is that no question of law arises from an interlocutory or a simplicitor remand order, therefore, in such situation reference is not

maintainable. Provision of section 47(1) of the Act is also quite clear in this regard which specifically states that only those matters are referable to the High Court in respect of which a question of law arises for determination. In our view, no substantial question of law arises from the impugned order passed by the Tribunal, whereby the matter has been remanded.

7.In view of above discussion, we are not persuaded to differ from the consistent view of this Court as well as of Sindh High Court regarding non-maintainability of reference application against the remand order passed by the Tribunal. Accordingly question raised is declined at this stage and this reference application is decided against the applicant being not maintainable.

8.Office shall send a copy of this order under seal of the Court to the Tribunal as required under the law.

(Malik Javid Iqbal Wains) (Abid Aziz Sheikh) Judge Judge

Approved for reporting.

Judge Judge

Riaz Ahmad