Lahore: The Lahore High Court (LHC) has set aside a decision of the Punjab Revenue Authority’s Appellate Tribunal, criticizing it for failing to properly examine and reconcile the company’s transactions before deciding the liability of a withholding tax (WHT) agent.
A two-member Multan Bench issued the ruling in Tax Reference (PRA) No. 3 of 2025, noting that the Tribunal did not conduct the required transaction-by-transaction review to determine what services were taxable and how much tax was actually due.
The company, represented by advocates Naveed Sikandar, Imran Ghazi and Waheed Shahzad Butt, argued that the Tribunal ignored key questions and relied on Section 14(3) of the Punjab Sales Tax on Services Act, 2012 in a way that unfairly supported the tax department.
The LHC observed that the alleged tax demand was based on Section 52, but the Tribunal failed to understand that later amendments extending limitation periods could not be used to justify past proceedings.
The Court added that while the figures were taken from audited accounts, the authorities must still reconcile each service to determine whether it falls under taxable services, the applicable rates, and the actual WHT liability—something the Tribunal did not do.
