Punjab Revenue Authority etc. vs M/S Captain Developers etc.

Stereo. H C J D A-38.

JUDGMENT SHEET

IN THE LAHORE HIGH COURT, MULTAN BENCH,

MULTAN

JUDICIAL DEPARTMENT

TR (PRA) No. 02 of 2025

Punjab Revenue Authority through its Member (Legal & Policy), Lahore & another Versus M/s. Captain Developers (Buch Villas), Multan & others

JUDGMENT

Date of hearing: 06.10.2026 Applicants by: Barrister Malik Sohail Ashiq Shujra, Advocate. Respondent No.1 ex-parte.

MUHAMMAD SAJID MEHMOOD SETHI, J.- Through this Reference Application under Section 67A of the Punjab Sales Tax on Services Act, 2012 (“the Act of 2012”), the Punjab Revenue Authority seeks opinion of this Court on the following questions of law arising out of judgment dated 20.02.2025 passed by the learned Appellate Tribunal of Punjab Revenue Authority, Lahore (Bench-II) (“the Appellate Tribunal”):-

1.Whether the learned Appellate Tribunal erred in law and acted beyond its jurisdiction by directing the preparation of a local commission report, despite the fact that under Section 67(1) of the Punjab Sales Tax on Services Act, 2012 (“the Act of 2012”), such a report can only be ordered to be prepared by an officer of the Authority?

2.Whether the Appellate Tribunal erred in law by failing to consider that the provisions of general law, specifically the Code of Civil Procedure, 1908 relating to local commissions, do not apply to or affect the procedures established under the special legislation, namely the PSTS Act and the rules framed thereunder?”

2.Learned counsel for the applicant-department submits that during adjudication of the appeal the learned Tribunal directed preparation of a report through a Local Commission and subsequently relied upon that report while determining the disputed factual aspects of the case. He contends that the course adopted by

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the Tribunal was without lawful authority as the Act itself prescribes the manner in which local investigation/report can be obtained. He argues that the learned Appellate Tribunal could not invoke the general provisions of the Code of Civil Procedure, 1908 (“CPC”) to assume a power or adopt a procedure which is inconsistent with the special statutory mechanism.

3.We have heard learned counsel for the applicant and examined the available record.

4.The controversy in hand involves an important question concerning the limits of procedural jurisdiction of a statutory appellate forum. It is not disputed that the learned Appellate Tribunal, while dealing with the appeal, caused a Local Commission to be conducted and on the basis of its report resolved the factual matters arising between the parties. The question is whether such course was legally available to the Appellate Tribunal under the scheme of the Act of 2012.

5.The proceedings before the learned Appellate Tribunal are governed under a special fiscal enactment i.e. the Punjab Sales Tax on Services Act, 2012, which constitutes a self-contained statutory framework for levy, assessment, adjudication and appellate determination of matters relating to sales tax on services. Thus, learned Appellate Tribunal, though exercising quasi-judicial powers, is required to exercise those powers within the four corners of the statute and the rules framed thereunder. A power to adopt a particular procedure cannot be presumed merely because a civil Court could adopt it under the CPC.

6.Section 67(1) of the Act of 2012 assumes significance in this regard. The provision, insofar as relevant to the controversy, reads: “67. Disposal of appeals by the Appellate Tribunal. – (1) The Appellate Tribunal may, before disposing of an appeal, call for such particulars, documents, records or information as it may require in respect of the matters arising from the appeal or cause further inquiry to be made by the officer of the Authority.”

7.The provision empowers the learned Appellate Tribunal to call for particulars, documents, records or information and, where

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further inquiry is required, to cause such inquiry to be made by an officer of the Authority. Although the provision does not expressly confer or prohibit the power to appoint a Local Commission, it identifies a statutory mechanism for obtaining further inquiry in proceedings under the Act. Whether the Tribunal could adopt a different procedure must, therefore, be determined in the light of the entire statutory scheme and any independent provision governing its procedural powers.

8.It is a settled principle of statutory interpretation that where a statute prescribes a particular manner for exercising a power, that power must ordinarily be exercised in the prescribed manner. The principle assumes particular significance in fiscal and quasi-judicial proceedings, where material obtained through an inquiry may form the basis of a determination affecting the rights and liabilities of the parties. However, the exclusivity of the prescribed procedure must follow from the statutory scheme and cannot be presumed merely because the statute provides one method of inquiry. Reference is made to Messrs Tri-Star Industries (Pvt.) Limited v. Trisa Burstenfabrik AG Triengen and another (2023 SCMR 1502), Ammad Yousaf v. The State and another (PLD 2024 Supreme Court 273) and Jeehand v. The State through Prosecutor General Balochistan (2025 SCMR 923).

9.The question, therefore, is not whether a Local Commission is, in the abstract, a useful procedural device. Although the Code of Civil Procedure, 1908, provides for commissions and local investigation in appropriate civil proceedings, the relevant question is whether those provisions, or any analogous procedural power, were applicable to the learned Appellate Tribunal under the governing statutory framework. The availability of a procedure before a civil court does not, by itself, confer the same power upon a statutory tribunal.

10.General procedural law may supplement a special enactment where the latter is silent, provided that such application is consistent with the statute's object and scheme. It cannot, however, be invoked

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to override an express provision or to confer a power inconsistent with the statutory framework. Accordingly, the applicability of the CPC to the proceedings before the learned Appellate Tribunal must be determined from the provisions governing the Tribunal and the nature of the power exercised, and cannot be assumed.

11.The Tribunal directed an investigation through a Local Commission and materially relied on its report to determine the factual controversy; the report thus formed a substantive part of the material underlying the impugned determination, and the legality of the procedure for obtaining it is material to the sustainability of the order. Section 67(1) specifically provides for further inquiry through an officer of the Authority. No independent provision of the Act or the rules authorising the appointment of a Local Commission was identified by the Tribunal or has been pointed out to us. In that absence, the Tribunal could not resort to the general provisions of the CPC to substitute a different mode of inquiry for the one the Act provides, and doing so extended its procedural powers beyond the authority its governing framework confers. The applicants’ objection is therefore sustainable to the extent that the Tribunal relied on the CPC as the source of authority for the Commission without establishing an independent statutory basis for it. General procedural law may supplement the Act where permissible, but cannot independently confer jurisdiction on a statutory tribunal contrary to the limits of its governing law.

12.Nor is the defect merely one of evidentiary appreciation. A determination affecting the rights and liabilities of a taxpayer must rest on material obtained and considered through a legally authorised procedure. Where the procedure by which material was obtained lies beyond the Tribunal’s authority, reliance on that material raises a question of legality, going to the source of the Tribunal’s power and not to the weight of the evidence, and is therefore a question of law properly within the reference jurisdiction. We emphasise the narrow compass of this opinion. We do not hold that section 67(1) is exclusive in every conceivable circumstance, or that the Tribunal

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can never take incidental steps in aid of its functions. We hold that, absent an independent statutory basis, the CPC cannot supply the authority for a Local Commission whose report is made the foundation of the Tribunal’s findings.

13.Consequently, the questions of law are answered in the affirmative to the extent that the learned Appellate Tribunal could not rely upon the provisions of the CPC, in the absence of independent statutory authority, to adopt a procedure for obtaining and relying upon a Local Commission report contrary to the mechanism contemplated by Section 67(1) of the Act. The impugned determination, having materially proceeded upon such report, cannot be sustained in its present form. The matter accordingly requires fresh consideration by the learned Appellate Tribunal in accordance with law.

14.Resultantly, this Reference Application is allowed to the above extent, the impugned order dated 20.02.2025 passed by the learned Appellate Tribunal is set aside, and the matter is remanded to the learned Appellate Tribunal for fresh decision in accordance with law, after providing due opportunity of hearing to the parties. The learned Appellate Tribunal shall determine the factual controversy afresh on legally admissible material and shall pass a speaking judgment, preferably within a period of sixty days from the date of receipt of certified copy of this judgment.

15.Office shall send a copy of this judgment under the seal of the Court to the learned Appellate Tribunal as required under Section 67A(4) of the Punjab Sales Tax on Services Act, 2012.

(Sultan Tanvir Ahmad) (Muhammad Sajid Mehmood Sethi) Judge Judge

APPROVED FOR REPORTING

Judge Judge

*A.H.S.*