Ms Sunthesis through Wasiq Naveed Khan Vs The Commissioner (Enforcement-I) Punjab Revenue Authority etc

Stereo. H C J D A 38.

Judgment Sheet

IN THE LAHORE HIGH COURT LAHORE

JUDICIAL DEPARTMENT

TR (PRA) No. 53054/2026

M/s Sunthesis Versus The Commissioner (Enforcement-I), etc.

JUDGMENT

Date of hearing 01.10.2026 Applicant by Mr. Muhammad Ibraheem Hassan, Advocate Respondent- Rana Tariq Mehmood Anjum, Advocate PRA by:

Muhammad Ajmal Zahid, J. Through this Reference Application under Section 67A of the Punjab Sales Tax on Services Act, 2012 (“the Act”), M/s Sunthesis (“the applicant- taxpayer”) has called in question the order dated 28.07.2026 passed by the learned Appellate Tribunal Punjab Revenue Authority, Lahore, Bench-II (“the learned Tribunal”) in Appeal No.135/2026.

2.Briefly stated, the facts giving rise to the instant Reference are that the applicant-taxpayer is registered with the Punjab Revenue Authority (“PRA”) as a service provider, bearing PNTN 7371839-2, under the service category appearing at Serial No.11 of the Second Schedule to the Act. The impugned order reflects that the assessing officer, on the basis of information available on record, found that the applicant- taxpayer had provided taxable services amounting to Rs.8,771,631/- against which Punjab Sales Tax of Rs.1,403,461/- was payable. Upon reconciliation of the value of services rendered and the tax deposited with the declarations

furnished by the applicant under Section 35 of the Act, the assessing officer formed the view that the applicant-taxpayer had failed to discharge its tax liability.

3.Consequently, a Show-Cause Notice dated 09.03.2019 was issued, whereby the applicant-taxpayer was confronted with the alleged non-payment of Punjab sales tax amounting to Rs.1,403,461/- for the relevant tax periods. Despite affording an opportunity of hearing, no reply was submitted by the applicant-taxpayer. The assessing officer, therefore, passed an order determining Punjab Sales Tax of Rs.1,403,461/- as payable but not paid, besides imposing penalty under Section 48(2), Serial No.8, and default surcharge under Section 49 of the Act. Aggrieved, the applicant-taxpayer preferred an appeal under Section 63 of the Act before the learned Commissioner (Appeals), PRA, Lahore, which was dismissed. The applicant thereafter approached the learned Tribunal, which also dismissed the appeal vide impugned order dated 28.07.2026. Hence, the instant Reference.

4.Vide order dated 16.09.2026, the Reference was admitted on the following question of law:

“Whether, on the facts and circumstances of the case, limitation for filing the appeal could, in law, be reckoned to run from a purported service that was itself invalid and ineffective, and whether the Tribunal's finding that the Applicant failed to explain each day of delay is sustainable where the very premise of valid service is under challenge?”

5.Learned counsel for the applicant-taxpayer submits that the learned Tribunal failed to properly appreciate the specific objection raised regarding service of the order. According to learned counsel, the document relied upon by the department, namely Form-14, neither establishes the address at which the order was allegedly served nor demonstrates that the

person shown as its recipient was authorized or competent to receive service on behalf of the applicant-taxpayer. It is further submitted that the address appearing on Form-14 is handwritten and was not furnished by the applicant-taxpayer. Learned counsel maintains that the alleged recipient, namely Maria Naaz, was not an employee of the applicant-taxpayer and, therefore, service upon her could not legally constitute service upon the applicant-taxpayer.

6.It is argued that the learned Tribunal, instead of first determining this foundational question of fact and law, proceeded on the assumption that valid service had been effected and thereafter examined the delay in filing the appeal. According to learned counsel, the finding that the applicant- taxpayer failed to explain the delay consequently rests upon an unestablished premise and is the result of misreading and non- reading of material available on record.

7.Conversely, learned counsel appearing for the respondent-department supports the impugned order and submits that the applicant-taxpayer was duly served at the address reflected on Form-14. According to learned counsel, the learned Tribunal considered the question of limitation and rightly concluded that the applicant-taxpayer had failed to satisfactorily explain the delay in filing the appeal. It is, therefore, contended that no question of law warranting interference in the reference jurisdiction of this Court arises.

8.We have heard learned counsel for the parties at considerable length and have carefully examined the available record with their able assistance.

9.The controversy before us essentially concerns the commencement of limitation. The applicant-taxpayer does not merely seek condonation of an admitted delay; rather, its case is

that the statutory period of limitation could not have commenced from the date relied upon by the department because the very service constituting the basis of such computation is disputed as invalid and ineffective.

10.The question of limitation, therefore, cannot be examined in isolation from the question of service. Ordinarily, limitation begins to run from the legally prescribed event upon which the statute predicates its commencement. Where service of an order is relied upon as that event, the validity and effectiveness of such service necessarily assume foundational significance. If the alleged service itself is not established in accordance with law, the date attributed to such service cannot, without further determination, be treated as the starting point of limitation.

11.It is a settled principle that an order affecting the rights of a person cannot be treated as having been duly communicated merely on the basis of an assertion that it was served. Where service is relied upon for commencing limitation, the record must establish the fact, date and legal efficacy of such service. The relevant inquiry is not confined to the existence of an endorsement of service; rather, it extends to whether the document was served at the legally recognized address and upon the person concerned or upon a person legally authorized or competent to receive it on his behalf.

12.In the present case, the applicant-taxpayer has specifically disputed the alleged service. It has asserted that the person shown as recipient, namely Maria Naaz, was not its employee. It has further questioned the address appearing on Form-14, contending that the same was handwritten and was not furnished by the applicant-taxpayer. These objections are neither collateral nor inconsequential. They go to the very

foundation of the department's assertion that the impugned order was validly communicated to the applicant-taxpayer.

13.Once such an objection was specifically raised, the learned Tribunal was required to examine the relevant record and record a clear finding, inter alia, as to: (i) the address at which service was allegedly effected; (ii) the source and legal status of such address; (iii) the identity and status of the person upon whom service was allegedly effected; (iv) whether such person was authorized or otherwise competent to receive service on behalf of the applicant-taxpayer; and (v) the legal consequence of such service for purposes of commencement of limitation.

14.From the order impugned before us, it appears that the learned Tribunal proceeded principally on the premise that service had been effected at the address reflected on Form-14 and thereafter focused upon the applicant-taxpayer's failure to explain the delay. The foundational question as to whether the alleged service was itself valid and legally effective, however, required independent determination. Unless the date of valid service is first established, the question as to when limitation commenced cannot conclusively be determined. Consequently, the inquiry into the alleged delay was necessarily dependent upon a prior determination of the validity of service.

15.The distinction between the two questions is important. One question is whether a valid service took place and, if so, on what date limitation commenced. The other is whether, after limitation had validly commenced, the appeal was filed beyond the prescribed period and, if so, whether the delay deserved condonation. The latter inquiry can arise only after the former has been answered. A finding that the applicant failed to explain each day of delay, therefore, cannot by itself

resolve a case where the very date from which such delay is calculated remains in dispute.

16.We are conscious that the learned Tribunal is the final fact-finding authority and that, while exercising reference jurisdiction, this Court does not ordinarily undertake a fresh appraisal or reappraisal of evidence. The jurisdiction of this Court is confined to questions of law arising from the order of the learned Tribunal.

17.At the same time, a finding of fact does not become immune from scrutiny merely because it is described as a finding of fact. Where such finding is founded upon misreading or non-reading of material evidence, or where the Tribunal fails to consider evidence having a direct and material bearing upon the controversy, the resultant determination may give rise to a question of law warranting examination by this Court. The Supreme Court in Pakistan Match Industries (Pvt.) Ltd. v. Assistant Collector, Sales Tax (2019 SCMR 906) has recognized the distinction between a mere erroneous appreciation of evidence and a finding affected by material misreading or non-reading of evidence.

18.Likewise, where a material issue arising between the parties has not been addressed or determined on the basis of the evidence available on record, the resultant finding cannot be sustained merely on the ground that the Tribunal is the final fact-finding forum. The finality attached to findings of fact presupposes that the material evidence has been considered and that the questions necessary for determining the controversy have been addressed in accordance with law.

19.In the instant case, the validity of service was not a peripheral factual controversy. It was intrinsically connected with the commencement of limitation and, consequently, with

the maintainability of the appeal itself. If the alleged service was invalid or ineffective, the date attributed to such service could not automatically constitute the date from which limitation commenced. Determination of the validity of service was, therefore, a necessary step before examining whether the appeal was filed within the prescribed period or whether any subsequent delay required condonation.

20.There is yet another aspect of the matter. A judicial or quasi-judicial authority is required to pass a speaking and reasoned order, particularly where determination of the issue affects valuable rights of a party. The reasons must demonstrate that the authority has applied its mind to the material questions requiring adjudication. In Mollah Ejahar Ali v. Government of East Pakistan and others (PLD 1970 SC 173), the Hon’ble larger Bench of Supreme Court emphasized the necessity of a reasoned adjudication reflecting due application of mind to the issues involved. The requirement of reasons is not an empty formality. Reasons constitute the link between the material on record and the conclusion reached by the adjudicating authority. They enable the aggrieved party to understand the basis of the decision and permit the superior forum to examine whether the decision has been reached in accordance with law. Where a material contention having a direct bearing upon the outcome is raised but remains unanswered, the order does not adequately demonstrate the application of mind required for a lawful adjudication. In the present case, the applicant-taxpayer specifically challenged the validity of service and raised objections regarding both the identity and status of the alleged recipient as well as the address appearing on Form-14. Since determination of these matters had a direct bearing upon the commencement of limitation, the learned Tribunal was required to record a clear and reasoned finding thereon. A conclusion

that the applicant-taxpayer had failed to explain each day of delay, without first conclusively determining the date of valid service from which such delay was to be computed, does not adequately answer the controversy raised before it.

21.We are, therefore, of the considered view that the learned Tribunal fell into error in treating the question of limitation as determinative without first resolving the foundational question of valid service. The impugned order does not sufficiently demonstrate that the material relied upon by the department for establishing service was examined in the light of the specific objections raised by the applicant-taxpayer. This omission assumes significance because, if the alleged service is ultimately found to be invalid or ineffective in law, the computation of limitation founded upon such service would necessarily require reconsideration.

22.We, however, do not deem it appropriate, while exercising reference jurisdiction, to ourselves record a final factual finding regarding the validity or otherwise of the alleged service. Whether Maria Naaz was authorized or competent to receive service; whether the address appearing on Form-14 was the recognized address of the applicant-taxpayer; and whether the mode of service complied with the applicable statutory requirements are matters which, in the first instance, ought to be determined by the learned Tribunal upon examination of the original record and after affording due opportunity of hearing to both sides.

23.We are conscious that this Court, in exercise of reference jurisdiction, is not required to substitute its own appreciation of evidence for that of the learned Tribunal. Reliance may be placed upon Commissioner Inland Revenue (Special Zone for Builders and Developers), Regional Tax Office, Islamabad v. Messrs Khudadad Heights, Islamabad

(2025 SCMR 716), The Collector of Sales Tax and Central Excise, Lahore v. Messrs Qadbros Engineering (Pvt.) Ltd., Lahore (2023 SCMR 939), Messrs Squibb Pakistan (Pvt.) Ltd. and another v. Commissioner of Income Tax and another (2017 SCMR 1006), Messrs Pakistan Television Corporation Limited v. Commissioner Inland Revenue (Legal), LTU, Islamabad and others (2017 SCMR 1136), Messrs F.M.Y. Industries Ltd. v. Deputy Commissioner Income Tax and another (2014 SCMR 907), Messrs Irum Ghee Mills Limited v. Income-Tax Appellate Tribunal and others (2000 SCMR 1871), Haji Ibrahim Ishaq Johri v. The Commissioner of Income Tax (West), Karachi (1993 SCMR 287), Commissioner of Income-Tax, Central Zone 'B' v. Messrs Farrokh Chemical Industries (1992 SCMR 523), The Commissioner of Income Tax v. M/s. Smith, Kline & French of Pakistan Ltd. and others (1991 SCMR 2374), Messrs Mohammad Akbar Mohammad Afzal v. Income-Tax Appellate Tribunal (1972 SCMR 409), Messrs Shah Nawaz Khan & Co., Multan v. The Commissioner of Income Tax, North Zone, West Pakistan, Lahore (1969 SCMR 123) and S.M. Ilyas & Sons v. Commissioner of Income Tax, Lahore Zone [(1982) 46 Tax 113 (S.C. Pak.)]. Nevertheless, where a material piece of evidence having a direct bearing upon the question under consideration has not been examined, or where a material issue has been left undecided, interference is warranted not for the purpose of substituting one factual conclusion for another, but to ensure that the controversy is determined in accordance with law and on the basis of the complete record.

24.In view of the foregoing discussion, the question admitted for consideration cannot be answered merely by accepting the date of alleged service reflected in Form-14. The validity and effectiveness of such service constitute a foundational issue which must first be determined before the

commencement of limitation and the alleged delay in filing the appeal can properly be examined. The learned Tribunal, however, has not adequately addressed this material aspect of the matter.

25.For what has been discussed above, the instant Reference is accepted. The question of law is answered in the affirmative. Consequently, the impugned order dated 28.07.2026 passed by the learned Tribunal in Appeal No.135/2026 is set aside and the matter is remanded to the learned Tribunal for decision afresh in accordance with law.

26.The learned Tribunal shall, after affording adequate opportunity of hearing to both sides, examine the original record relating to the alleged service, including Form-14 and any other document relied upon by the department for establishing such service. It shall specifically determine the address at which service was allegedly effected, the source and legal status of such address, the identity and status of the person who allegedly received the order, whether such person was authorized or competent to receive service on behalf of the applicant-taxpayer, and the legal effect thereof for purposes of commencement of limitation. Upon determination of these matters, the learned Tribunal shall proceed, in accordance with law, to determine whether the appeal was filed within the prescribed period and, if found to be delayed, whether the explanation furnished by the applicant-taxpayer constitutes sufficient cause for condonation of such delay.

27.Nothing contained in this judgment shall be construed as an expression of opinion by this Court on the ultimate merits of the applicant-taxpayer's tax liability or on the validity or otherwise of the alleged service. All such matters are left open for determination by the learned Tribunal strictly in accordance with law.

28.The Office is directed to transmit a copy of this judgment, under the seal of the Court, to the learned Appellate Tribunal, Punjab Revenue Authority, in terms of Section 133(5) of the Act, for information and necessary compliance.

(Hassan Nawaz Makhdoom) (Muhammad Ajmal Zahid) Judge Judge

M. Tahir*