IN THE SUPREME COURT OF PAKISTAN 
 (Appellate Jurisdiction) 
 
 
PRESENT:  
 
 
 
Mr. Justice Umar Ata Bandial 
Mr. Justice Munib Akhtar  
 
CIVIL 
PETITION 
NO.398-L 
OF 
2018 
A/W  
CIVIL PETITIONS NOS.584-L, 671-L TO 675-L, 
774-L, 775-L, 812-L, 815-L, 911-L, 912-L, 913-L,  
919-L, 984-L, 985-L, 1005-L, 1148-L, 1684-L, 
1688-L TO 1690-L, 1729-L, 1796-L, 1812-L,  
1821-L TO 1827-L, 1850-L TO 1854-L, 1859-L, 
1860-L, 1878-L, 1887-L, 2038-L, 2085-L, 2086-L, 
2090-L, 2091-L, 2129-L  AND 3480 OF 2018.  
 
(On appeal from the judgments/orders passed by Lahore High Court, 
Lahore dated: 
08.12.2017 passed in W.P. No.37295 of 2016, 77996, 113697, 92863,  
104518 of 2017  
29.03.2018 passed in W.Ps. No.187666 of 2018  
19.04.2018 passed in ICAs No.192176, 192180, 192217, 183611 of 2018 
11.05.2018 passed in W.Ps. 201969, 205022 of 2018 
11.06.2018 passed in W.P. No.212424, 218052, 215434 of 2018 
12.06.2018 passed in W.P. No.217297 of 2018 
13.12.2018 passed in W.Ps. No.89391, 97850 of 2017 
18.12.2017 passed in W.P. No.121977 of 2017  
22.12.2017 passed in W.P. No. 28023, 21680, 96042, 97089, 97184 of 2017 
22.09.2017 passed in W.P. No. 34945 of 2017 
13.02.2018 passed in W.Ps. No.158509 of 2018 
27.02.2018 passed in W.P. 123944 of 2017, 152517, 152606, 166893 of 2018 
01.03.2018 passed in W.Ps No.21606 of 2012 
12.03.2018 passed in W.P. No.122208 of 2018 
19.04.2018 passed in ICA No.183611, 192187, 192191, 201079 of 2018 
07.06.2018 passed in ICA No.218132, 218135, 218129 of 2018 
11.06.2018 passed in ICA No.218125, 218127, 217617 of 2018 
25.06.2018 passed in ICAs No.218128, 218134, 218137, 218131 of 2018 
26.06.2018 passed in ICA No. 220510 of 2018  
28.06.2018 passed in ICA No.222208, 222316 of 2018) 
 
The Commissioner Inland Revenue,  
Zone-III, RTO-II, Lahore   
 
… Petitioner 
(in all cases) 
 
 
 
 
 
VERSUS 
M/s Hamza Nasir Wire & others  
…Respondent 
(in CP.398-L of 2018) 
 
M/s Riaz Bottlers Pvt. Ltd. & others   
…Respondent 
(in CP.584-L of 2018) 
 
M/s Allied Marketing Pvt. Ltd. & others 
…Respondent 
(in CP.671-L of 2018) 
 
2 
CP.398-L OF 2018, etc. 
 
M/s Sefam Pvt. Ltd. etc. & others 
…Respondent 
(in CP.672-L of 2018) 
 
M/s Benz Industries Ltd. & others 
…Respondent 
(in CP.673-L of 2018) 
 
M/s Anmol Paper Mills Pvt. Ltd.  
& others 
…Respondent 
(in CP.674-L of 2018) 
 
M/s Qarshi Industries Pvt. Ltd. etc.   
…Respondent 
(in CP.675-L of 2018) 
 
M/s Haleeb Foods Ltd. etc. 
…Respondent 
(in CP.774-L of 2018) 
 
Janana De Mulucho Textile Mills Ltd. 
etc. 
…Respondent 
(in CP.775-L of 2018) 
 
M/s Hi-Tech Edible Oils Pvt. Ltd. etc.  
…Respondent 
(in CP.812-L of 2018) 
 
M/s Faran Honda Agency, etc.  
…Respondent 
(in CP.815-L of 2018) 
 
M/s Hunza Sugar Mills Ltd. & others   
…Respondent 
(in CP.911-L of 2018) 
 
M/s Ghani Gases Ltd. & others  
…Respondent 
(in CP.912-L of 2018) 
 
M/s Service Industries Ltd., & others  
…Respondent 
(in CP.913-L of 2018) 
 
M/s Hi-Tech Edible Oils Pvt. Ltd. 
& others  
…Respondent 
(in CP.919-L of 2018) 
 
M/s Sui Northern Gas Pipelines Ltd. etc. 
…Respondent 
(in CP.984-L of 2018) 
 
M/s Sui Northern Gas Pipelines Ltd. etc.  
…Respondent 
(in CP.985-L of 2018) 
 
M/s Umer Packages & others  
…Respondent 
(in CP.1005-L of 2018) 
 
M/s Trade Linker Trading Co., 
& another  
…Respondent 
(in CP.1148-L of 2018) 
 
M/s Trade Linker Trading Co.,  
& another  
…Respondent 
(in CP.1684-L of 2018) 
 
M/s Allied Marketing (Pvt.) Ltd.  
…Respondent 
(in CP.1688-L of 2018) 
 
M/s Qarshi Industries Pvt. Ltd.  
& another  
…Respondent 
(in CP.1689-L of 2018) 
 
3 
CP.398-L OF 2018, etc. 
 
M/s Riaz Bottlers Pvt. Ltd. & another  
…Respondent 
(in CP.1690-L of 2018) 
 
M/s Sefam Pvt. Ltd. & another  
…Respondent 
(in CP.1729-L of 2018) 
 
M/s Suntube Pvt. Ltd.  
…Respondent 
(in CP.1796-L of 2018) 
 
M/s Suntube Pvt. Ltd  
…Respondent 
(in CP.1812-L of 2018) 
 
M/s Ilyas Steel Re-Rolling Mills Ltd.  
& others  
…Respondent 
(in CP.1821-L of 2018) 
 
M/s Ejaz Brother Steel Furnace  
& others  
…Respondent 
(in CP.1822-L of 2018) 
 
M/s Crown Pottery and others  
…Respondent 
(in CP.1823-L of 2018) 
 
M/s Ghulam Rasool Steel Furnace  
& others  
…Respondent 
(in CP.1824-L of 2018) 
 
M/s Haq Bahu Steel Mills Ltd. & others  
…Respondent 
(in CP.1825-L of 2018) 
 
M/s Ejaz Brothers Steel Furnace  
& others  
…Respondent 
(in CP.1826-L of 2018) 
 
M/s Bilal Ceramics & others  
…Respondent 
(in CP.1827-L of 2018) 
 
M/s Z.A. Food Industry & others  
…Respondent 
(in CP.1850-L of 2018) 
 
M/s Dura Ceramics  & others  
…Respondent 
(in CP.1851-L of 2018) 
 
M/s Al-Haram Ceramics and others  
…Respondent 
(in CP.1852-L of 2018) 
 
M/s Pakistan Ceramics and others  
…Respondent 
(in CP.1853-L of 2018) 
 
M/s Tayyab Pottery & others 
…Respondent 
(in CP.1854-L of 2018) 
 
M/s Janana De Malucho Textile  
Mills Ltd., etc.  
…Respondent 
(in CP.1859-L of 2018) 
 
M/s Magna Textile Industries Pvt. Ltd.  
& others  
…Respondent 
(in CP.1860-L of 2018) 
 
M/s Trend International & another  
…Respondent 
(in CP.1878-L of 2018) 
 
4 
CP.398-L OF 2018, etc. 
 
M/s Punjab Beverages Co. Ltd.  
…Respondent 
(in CP.1887-L of 2018) 
 
M/s Huda Sugar Mills Ltd. & others  
…Respondent 
(in CP.2038-L of 2018) 
 
M/s Faran Honda Agency & others  
…Respondent 
(in CP.2085-L of 2018) 
 
M/s Masood Fabrics Pvt. Ltd. & others  
…Respondent 
(in CP.2086-L of 2018) 
 
M/s Kasur Corporation & others  
…Respondent 
(in CP.2090-L of 2018) 
 
M/s D.G. Khan Cement Co. Ltd.  
& others  
…Respondent 
(in CP.2091-L of 2018) 
 
M/s Rohi Entertainment Co. Ltd.  
& others 
…Respondent 
(in CP.2129-L of 2018) 
 
M/s Ejaz Spinning Mills Ltd. & another  
…Respondent 
(in CP.3480 of 2018) 
 
  
For the petitioners  
Mr. Ibrar Ahmed, ASC.  
Mr. Sarfraz Ahmed Cheema, ASC.  
Ch. Muhammad Zafar Iqbal, ASC.  
Mrs. Kausar Parveen, ASC.  
Dr. Tariq Masood, 
Member Legal FBR 
Dr. Ishtiaq Ahmad, Director Legal  
 
 
For the respondent (s) 
(in CPs.671-L, 672-L, 675-L 
& 815-L of 2018).  
Mr. M. Ajmal Khan, ASC.  
 
 
For the respondent (s) 
(in CPs.3480 of 2018) 
Syed Rifaqat Hussain Shah, AOR.  
 
 
For the respondent (s) 
(in CP.2091-L of 2018) 
Mr. Imtiaz Rashid Siddiqui, ASC.  
Mr. Shehryar Kasuri, ASC.  
 
 
Date of hearing  
20.11.2018. 
 
 
 
 
JUDGMENT: 
 
 
  
 
UMAR ATA BANDIAL, J. Three petitions bearing 
CP No.398-L of 2018, CP No.584-L of 2018 and CP No.674-L 
of 2018  challenge a common judgment by the learned  
Single Judge of the Lahore High Court dated 08.12.2017 
5 
CP.398-L OF 2018, etc. 
 
(“impugned judgment”) which sets aside the show cause 
notices, inter alia, dated 14.11.2016 (in some petitions) issued 
to the respondent-taxpayers under Section 11(3) of the Sales 
Tax Act, 1990 (“Act”) by Officers of Inland Revenue (“OIRs”), 
namely, Deputy Commissioners of Inland Revenue (“DCIRs”) 
and Assistant Commissioners of Inland Revenue (“ACIRs”). 
The notices alleged non-payment or short payment of sales 
tax by the respondent-taxpayers during the tax periods 
mentioned therein. The remaining petitions assail other 
judgments that follow the aforenoted impugned judgment and 
the case law cited by it.  
2. 
 
The impugned judgment notes that the Federal 
Board of Revenue (“FBR”) vide notification dated 21.07.2016 
(“Notification-I”), appointed eight Commissioners of Inland 
Revenue heading different Zones functioning under the 
Corporate Regional Tax Office, Lahore to exercise powers and 
perform functions as conferred under the Act and the Rules 
made 
thereunder. 
Such 
authority 
was 
reposed 
by 
Notification-I in relation to specified cases or classes of cases 
of tax payers falling within the respective territorial 
jurisdictions of the Commissioners. It is observed by the 
impugned judgment that rather than exercising such powers 
themselves, inter alia, the CIR Zone-III, RTO-II, Lahore 
(“CIR”), vide notification dated 01.08.2016 (“Notification-II”) 
authorised his subordinate OIRs, heading twelve different 
units in his Zone, to exercise their powers and perform their 
6 
CP.398-L OF 2018, etc. 
 
functions as conferred by the Act and its subordinate Rules in 
relation to specified cases or classes of cases of tax payers 
falling within their territorial jurisdictions.  
3. 
 
In conclusion, the learned High Court held that 
Notification-II by the CIR delegated the powers that had been 
assigned to him by the FBR vide Notification-I. Such 
delegation by the CIR under the subsequent Notification-II to 
the OIRs constituted sub-delegation without the sanction of 
law. Therefore, in the presence of Notification-I whereunder 
the CIR was himself a delegate of the FBR, the further 
delegation of powers and functions by the CIR through 
Notification-II in favour of his nominated subordinate OIRs 
was unlawful and void. This rendered the latter Notification-II 
issued by the CIR and the impugned show cause notices 
issued by the OIRs (DCIRs and ACIRs) to be of no legal effect. 
For facility of reference the excerpts of the two Notifications 
that are germane to the instant controversy are produced 
below: 
 
 
 
 
 
“Notification-I 
“GOVERNMENT OF PAKISTAN 
REVENUE DIVISION 
FEDERAL BOARD OF REVENUE 
****** 
F.No.57(2)Jurisdiction/2016/95882-R     Islamabad, the 21st July, 2016 
 
NOTIFICATION 
(Inland Revenue Operations Wing, FBR) 
 
Subject:- 
JURISDICTION OF CHIEF COMMISSIONER AND 
 
 
COMMISSIONERS INLAND REVENUE CORPORATE 
 
 
REGIONAL TAX OFFICE, LAHORE. 
 
 
In exercise of the powers conferred under section 209 of 
Income Tax Ordinance, 2001, section 30 and section 31 of the Sales 
Tax Act, 1990, Section 29 of the Federal Excise Act, 2005, and in 
7 
CP.398-L OF 2018, etc. 
 
supersession of all earlier orders and notifications of the Board in 
respect of jurisdiction, the Federal Board of Revenue is pleased to 
direct that: 
i) 
The Chief Commissioner Corporate RTO, Lahore shall exercise 
the powers and perform functions under Income Tax 
Ordinance, 2001, the Sales Tax Act, 1990, the Federal Excise 
Act, 2005 section 7 of Finance Act, 1989 (V of 1989), Wealth 
Tax Act, 1963 (Repealed) read with section 3 of the Finance 
Act, 2003 (I of 2003), and Workers Welfare Fund Ordinance, 
1971, in respect of the persons or classes of persons or cases 
or classes of cases as mentioned in column (4) of notification; 
and 
shall 
perform 
all 
administrative 
functions 
and 
coordination with Federal Board of Revenue, and 
ii) 
The Commissioners of Inland Revenue specified in column (2), 
shall exercise the powers and functions, as specified in 
column (3), in respect of the persons or classes of persons or 
cases or classes of cases as specified in column (4) of the Table 
below: 
This notification shall take effect from August 01, 
2016. 
 
 
 
TABLE 
S.No. 
Commissioner 
Inland Revenue 
Powers & Functions 
Jurisdiction 
(1) 
(2) 
(3) 
(4) 
01. 
Commissioner 
Inland Revenue 
(Zone-I), Corporate 
RTO, Lahore. 
…. 
…. 
02. 
Commissioner 
Inland Revenue 
(Zone-II), Corporate 
RTO, Lahore. 
…. 
…. 
03. 
Commissioner 
Inland Revenue 
(Zone-III), 
Corporate RTO, 
Lahore. 
The Commissioner 
Inland Revenue shall 
exercise powers and 
perform functions as 
conferred under: 
 
(a) 
Income Tax 
Ordinance, 2001 
and Rules made 
there under; 
(b) The Sales Tax Act, 
1990 and Rules 
made there under; 
(c) 
The Federal Excise 
Act, 2005 and Rules 
made there under; 
(d) Section 7 of the 
Finance Act, 1989 
(Act No. V of 1989) 
as amended from 
time to time 
(e) 
Workers Welfare 
Fund Ordinance, 
1971.  
1. 
All cases or classes of 
cases persons or classes of 
persons of corporate sector 
falling within the limits of 
civil Districts of Lahore, 
Kasur, Okara, 
Sheikhupura & Nankana 
Sahib of the Province of 
Punjab other than the 
cases assigned to LTU 
Lahore RTO-II, Lahore or 
any other zone of 
Corporate RTO, Lahore 
whose names begin with 
alphabet ‘R’ ‘S’ ‘T’ ‘U’ ‘V’ ‘W’ 
‘X’ ‘Y’ & ‘Z’. 
2. 
 All cases of Directors of 
companies as specified in 
paragraph 1 above.  
3. 
Monitoring and 
Enforcement of taxpayers 
under the Provisions of the 
laws and rules (specified in 
Column 3 of the table) in 
respect of all withholding 
agents existing in the 
jurisdiction of Zone-III of 
Corporate RTO, Lahore.  
 
4. 
All cases of statutory 
agents/representatives 
8 
CP.398-L OF 2018, etc. 
 
assessable under sections 
172 and 173 of the Income 
Tax Ordinance, 2001 as 
specified in paragraphs 1, 
2 & 3 above.  
5. 
Cases or classes of cases 
or persons or classes of 
persons or areas 
specifically assigned by 
FBR/Chief Commissioner 
from time to time. 
  
04-08 
Commissioner 
Inland Revenue in 
5 other Zones of 
Corporate RTO, 
Lahore 
.... 
….” 
 
 
 
 
 
 
 
 
(emphasis supplied) 
 
 
 
 
 
“Notification-II 
“Commissioner Inland Revenue 
Zone-III, Regional Tax  
Office-II, Lahore. 
No.01/III 
Dated: 01.08.2016  
ORDER  
 
Subject:- 
JURISDICTION OF OFFICERS OF INLAND REVENUE, OTHER 
 
 
THAN THE ADDITIONAL COMMISSIONERS, IN RESPECT OF 
 
 
 ZONE-III, REGIONAL TAX OFFICE-II, LAHORE.  
 
 
In pursuance of Federal Board of Revenue’s notification 
bearing No.57(2)Jurisdiction/2016/95896-R dated 21st July, 2016 
and in exercise of the powers conferred under sub-section (1) of 
section 210 of Income Tax Ordinance, 2001, sub-section (3) of section 
30 of the Sales Tax Act, 1990, sub-section (1B) of section 29 of the 
Federal Excise, Act, 2005, the Commissioner Inland Revenue, Zone-
III, Regional Tax Officer-II, Lahore is pleased to direct that the Officers 
of Inland Revenue specified in column (2) of the Table-1 below, shall 
exercise the powers and perform the functions, under the said Laws, 
as specified in column (3) of the Table-I below, except the powers and 
functions mentioned in Table-II below, in respect of the persons of 
classes of persons of areas (excluding cases or classes of cases or 
persons or classes of persons for the areas assigned to any other 
officer of Inland Revenue, Regional Tax Office-II, Lahore) as specified 
in column (4) of the Table below.    
2. 
This order shall take effect from 01.08.2016. 
 
 
    TABLE 
S.No. 
Officer of Inland 
Revenue 
Powers & Functions 
Jurisdiction 
(1) 
(2) 
(3) 
(4) 
1. 
Officer of Inland 
Revenue Unit-01 
The Inland Revenue 
Officer shall exercise 
powers and perform 
functions as conferred 
under: 
 
(a) 
Income Tax 
Ordinance, 2001 and 
Rules made there 
under; 
(b) The Sales Tax Act, 
1990 and Rules 
1. 
All cases or classes of 
cases persons or classes of 
persons of non-corporate 
sector other than the 
cases assigned to LTU 
Lahore, Corporate RTO, 
Lahore or any other Zone 
of RTO-II, Lahore falling 
within the territorial 
jurisdiction of the Wahga 
Town of the Civil District 
of Lahore of the Province 
9 
CP.398-L OF 2018, etc. 
 
made there under; 
(c) 
The Federal Excise 
Act, 2005 and Rules 
made there under; 
(d) Section 7 of the 
Finance Act; 1989 
(Act No. V of 1989) 
as amended from 
time to time 
(e) 
Workers Welfare 
Fund Ordinance, 
1971.  
of the Punjab and under: 
a) 
Wahga Town UCs/ 
Areas (Bhaseen, 
Munawan, Nihala); 
2)    All Cases or classes of 
cases, persons of non-
corporate sector falling 
within the limits of the 
civil district of Lahore of 
the Province of Punjab, 
other than the cases 
assigned to LTU, Lahore, 
Corporate RTO, Lahore of 
any other Zone of RTO-II, 
Lahore which are engaged 
in the following businesses 
in the following categories: 
a) 
Non Residents; 
3. 
All cases of individuals, 
members of AOP as 
specified in paragraph 1 & 
2 above.  
4) 
All cases of statutory 
agents /representatives 
assessable under Section 
172 and 173 of the Income 
Tax Ordinance, 2001 as 
specified in paragraphs 1, 
2 & 3 above.  
5) 
Cases or classes of cases 
or persons or classes of 
persons or areas 
specifically assigned by 
FBR/Chief Commissioner 
from time to time. 
  
02-12 
Officer of Inland 
Revenue Unit 02-
12 
… 
…” 
 
 
 
 
 
 
 
            (emphasis supplied) 
 
 
4. 
 
We have heard the erudite arguments of the 
learned counsel for the parties whose names are recorded in 
the title of this judgment, and have carefully perused the 
impugned judgment along with the available record. The 
substantive findings of the learned High Court are considered 
in our opinion that follows.  
5.  
 
To our minds, the main controversy in these 
petitions has arisen from the interpretation assigned to 
Section 30 of the Act, specifically sub-sections (1) and (3), by 
the learned High Court. Therefore, it is reproduced below for 
reference: 
10 
CP.398-L OF 2018, etc. 
 
“30. Appointment of Authorities.—  
(1) 
For the purposes of this Act, the Board 
may, appoint in relation to any area, person or 
class of persons, any person to be:  
(a) a Chief Commissioner Inland Revenue;  
(b) a Commissioner Inland Revenue;  
(c) a Commissioner Inland Revenue (Appeals);  
(d) an Additional Commissioner Inland Revenue;  
(e) a Deputy Commissioner Inland Revenue;  
(f) an Assistant Commissioner Inland Revenue; 
(g) an Inland Revenue Officer;  
(h) a Superintendent Inland Revenue;  
(i) an Inland Revenue Audit Officer; 
(ia) an Inspector Inland Revenue; and  
(j) an officer of Inland Revenue with any other 
designation.   
(2) 
The Chief Commissioner Inland Revenue 
and Commissioner Inland Revenue (Appeals) 
shall 
be 
subordinate 
to 
the 
Board 
and 
Commissioner 
Inland 
Revenue 
shall 
be 
subordinate to the Chief Commissioner Inland 
Revenue. 
(2A) 
The Chief Commissioners Inland Revenue 
shall perform their functions in respect of such 
persons or classes of persons of such areas as the 
Board may direct.  
(2B) 
The Commissioners Inland Revenue shall 
perform their functions in respect of such 
persons or classes of persons or such areas as 
the Chief Commissioner, to whom they are 
subordinate, may direct. 
(3)  Additional Commissioner Inland Revenue, 
Deputy Commissioners Inland Revenue, District 
Taxation 
Officer 
Inland 
Revenue, 
Assistant 
Commissioner Inland Revenue, Assistant Director 
Inland Revenue, Superintendent Inland Revenue, 
Inland Revenue Audit Officer, Inland Revenue 
Officer, Inspector Inland Revenue, and Officer of 
Inland Revenue with any other designation shall 
be subordinate to the Commissioner Inland 
Revenue and shall perform their functions in 
respect of such persons or classes of persons or 
such areas as the Commissioners, to whom they 
are subordinate, may direct;  …” 
 
6.  
 
From a close reading of Section 30 ibid, it becomes 
clear that the said provision vests the FBR with the exclusive 
11 
CP.398-L OF 2018, etc. 
 
power to appoint OIRs while also conferring a concurrent 
power on the FBR and CIRs to delineate the territorial (area) 
and personal (persons or classes of persons) jurisdiction of 
OIRs. Such powers are granted to the FBR by virtue of 
Section 30(1) of the Act and to the CIRs by Section 30(3) ibid. 
These powers of the FBR and CIRs are recognised by the 
learned High Court in the impugned judgment.  
7.  
 
It is plain then that the primary purpose of 
Section 30 ibid is to ensure a smooth and efficient working of 
the OIRs operating under the Act. It does not vest the FBR or 
the CIRs with any authority to confer functions and powers 
on the OIRs as they deem fit. In fact, the powers and duties of 
the OIRs have been fixed by Section 31 of the Act itself which 
is produced below: 
“31. Powers.-- An officer of Inland Revenue 
appointed under Section 30 shall exercise such 
powers and discharge such duties as are 
conferred or imposed on him under this Act; and 
he shall also be competent to exercise all powers 
and discharge all duties conferred or imposed 
upon any officer subordinate to him:  
Provided 
that, 
notwithstanding 
anything 
contained in this Act or the rules, the Board may, 
by general or special order, impose such 
limitations or conditions on the exercise of such 
powers and discharge of such duties as it deems 
fit.” 
(emphasis supplied) 
 
8.  
 
Accordingly, the scheme of the Act is that only 
FBR is competent to appoint OIRs in a graded hierarchy of 
eleven 
different 
posts 
and 
to 
fix 
their 
jurisdictional 
12 
CP.398-L OF 2018, etc. 
 
parameters. Similarly, under the concurrent power [Section 
30(3)], the CIRs have the authority to fix the jurisdictional 
parameters of OIRs who are subordinate to them in rank. 
However, the powers and duties of such OIRs are, pursuant 
to Section 31 ibid, specified and fixed by the Act and include 
the powers and duties of their subordinate officers. 
Significantly, Section 2(18) of the Act has defined all officers 
appointed by the FBR under Section 30(1) of the Act as OIRs: 
“2. Definitions.– In this Act, unless there is 
anything repugnant in the subject or context, -- 
… 
(18) “officer of Inland Revenue” means an 
officer appointed under Section 30.” 
 
9.  
 
To reiterate, on a plain reading of Section 2(18), 
Section 30 and Section 31 of the Act, what becomes clear is 
that all OIRs appointed by the FBR can only exercise the 
powers and discharge the duties vested in them by the Act. 
These include the powers and duties of their subordinate 
officers. Accordingly, after designating the posts of OIRs 
including the respective delineation of their territorial and 
personal jurisdiction by the FBR and the CIRs, the appointed 
OIRs perform and exercise the functions, powers or duties 
vested in them by the Act. Neither the FBR nor the CIR have 
authority under the Act to select or limit the functions, 
powers and duties that may be exercised by their subordinate 
OIRs.  
10.   
In the above background, the question arises 
whether the disputed show cause notices were issued by the 
13 
CP.398-L OF 2018, etc. 
 
OIRs under Section 11(3) of the Act in the valid exercise of 
their powers. It would be appropriate at this stage to 
reproduce Section 11 ibid: 
“11. Assessment of Tax and recovery of tax not 
levied or short-levied or erroneously refunded. 
–  
(1) 
Where a person who is required to file a 
tax return fails to file the return for a tax 
period by the due date or pays an amount 
which, for some miscalculation is less than 
the amount of tax actually payable, an 
officer of Inland Revenue shall, after a 
notice to show cause to such person, make 
an order for assessment of tax, including 
imposition 
of 
penalty 
and 
default 
surcharge in accordance with sections 33 
and 34: 
Provided that where a person required to 
file a tax return files the return after the 
due date and pays the amount of tax 
payable in accordance with the tax return 
alongwith default surcharge and penalty, 
the notice to show cause and the order of 
assessment shall abate.  
(2) 
Where a person has not paid the tax due 
on supplies made by him or has made 
short payment or has claimed input tax 
credit or refund which is not admissible 
under this Act  for reasons other than 
those specified in sub-section (1), an officer 
of Inland Revenue shall, after a notice to 
show cause to such person, make an order 
for assessment of tax actually payable by 
that person or determine the amount of tax 
credit 
or 
tax 
refund 
which 
he 
has 
unlawfully claimed and shall impose a 
penalty and charge default surcharge in 
accordance with sections 33 and 34.  
(3) 
Where by reason of some collusion or a 
deliberate act any tax or charge has not 
been levied or made or has been short-
levied or has been erroneously refunded, 
the person liable to pay any amount of tax 
or charge or the amount of refund 
erroneously made shall be served with a 
notice requiring him to show cause for 
payment of the amount specified in the 
notice. 
(4) 
… 
(4A) 
… 
(5) 
No order under this section shall be made 
by an officer of Inland Revenue unless a 
notice to show cause is given within five 
years, of the relevant date, to the person in 
14 
CP.398-L OF 2018, etc. 
 
default specifying the grounds on which it 
is intended to proceed against him and the 
officer of Sales Tax shall take into 
consideration the representation made by 
such person and provide him with an 
opportunity of being heard: 
Provided that order under this section 
shall be made within on hundred and 
twenty days of issuance of show cause 
notice or within such extended period as 
the Commissioner may, for reasons to be 
recorded in writing, fix provided that such 
extended period shall in no case exceed 
ninety days: 
Provided further that any period during 
which the proceedings are adjourned on 
account of a stay order or Alternative 
Dispute Resolution proceedings or the time 
taken 
through 
adjournment 
by 
the 
petitioner not exceeding sixty days shall be 
excluded from the computation of the 
period specified in the first proviso. … ” 
 
 
 
(emphasis supplied) 
 
It may be noticed that, while the Act confers multiple powers 
on OIRs, the provisions of Section 11 ibid vests powers on 
such officers specifically in two respects, namely, the 
assessment and recovery of tax. Thus all OIRs of different 
grades appointed under Section 30(1) of the Act possess the 
power to issue show cause notices under Section 11 ibid. 
Consequently, the impugned show cause notices were issued 
by the OIRs competently under Section 11(3) ibid in aid of 
proceedings commenced for recovery of tax. 
11. 
 
In the light of the above discussion, the basic 
issue requiring determination concerns the legal effect of the 
Notification-I issued by the FBR. The learned High Court in 
the impugned judgment has observed that by issuing 
Notification-I, the FBR has specifically ordered only CIRs to 
15 
CP.398-L OF 2018, etc. 
 
exercise the powers conferred by the Act, including the 
issuance of show cause notices to taxpayers under Section 
11(3). Therefore, by issuing Notification-II the CIR has 
erroneously sub-delegated these powers to his subordinate 
OIRs. As a result, the notices issued to the respondent 
taxpayers are null and void because these were issued by an 
unauthorised statutory authority. The relevant portion from 
the impugned judgment is produced below: 
8. … The tenor of Notification-I and Notification-II 
also shows that FBR intended for the Chief 
Commissioners and Commissioners of Inland 
Revenue to perform all administrative functions 
and coordination as given in the Column-4 of the 
Table in those notifications. Therefore, to that 
extent the Commissioner’s power to confer those 
functions on officers subordinate to him stood 
taken away and his power to do so in respect of 
the 
subject 
matter 
of 
Notification-I 
and 
Notification-II has been curtailed. This effectively 
means that in respect of the persons or classes of 
persons or cases or classes of cases as specified 
in Notification-I only the Commissioner of Inland 
Revenue mentioned in these Notifications will 
exercise the power and those functions cannot be 
delegated by those Commissioners of Inland 
Revenue. This is the most appropriate purposive 
interpretation which could be placed upon a 
holistic consideration of the Notifications I & II 
and the orders made by the Commissioners 
Inland Revenue. Unless this is done it will be 
tantamount to undermining the authority and the 
intent of the FBR and will throw into complete 
disarray the hierarchycal structure of the FBR. 
This is also evident from the use of the term 
“shall” in the Notification-I by which it has been 
specifically stated that the Commissioners of 
Inland Revenue shall exercise the powers and 
functions as specified in column 3 of Notification-
I. It is reiterated that if the Notification-I had not 
been issued by FBR, there was no impediment in 
the way of the Commissioner Inland Revenue to 
prescribe functions to be performed by officers of 
Inland Revenue  subordinate to him in case sub-
section(3) of section 30 of the Act, 1990. However, 
since a notification indeed has been issued by 
FBR for the exercise of powers under Section 30 
of the Act, the ineluctable conclusion is that FBR 
intended those powers to be exercised by the 
Commissioners 
of 
Inland 
Revenue 
to 
the 
exclusion of all other officers of Inland Revenue 
16 
CP.398-L OF 2018, etc. 
 
and that intent of FBR cannot be set at naught by 
the respective Commissioners Inland Revenue by 
further delegating those powers. …” 
(emphasis supplied) 
 
12.   
To fortify his finding, the learned Single Judge also 
quoted para-17 of a judgment by the Islamabad High Court 
reported as Zaver Petroleum Corporation Ltd. Vs. Federal 
Board of Revenue (2016 PTD 2332) which opines as follows:  
“17: It is, therefore, obvious from the above 
definitions that the three expressions are distinct 
and separate. The power or jurisdiction conferred 
on an officer of Inland Revenue precedes the 
performance of functions. The conferment of 
power or jurisdiction is a pre-condition for the 
performance of functions. By no stretch of the 
imagination does subsection (3) of section 30 
empower the Commissioner to confer power or 
jurisdiction. However, a Commissioner pursuant 
to subsection (3) can assign persons or areas in 
respect of the officers specified therein for the 
purpose of the performance of functions with 
regard to the scope of the power and jurisdiction 
already conferred on such officers. Such officers, 
in order to perform their respective functions, 
have to be vested with power or jurisdiction. In 
the instant case the learned counsel appearing on 
behalf of the Department have not been able to 
show any provision of the Act of 1990 which 
empowers the Commissioner to issue the order 
dated 23-01-2014 and further delegate the 
powers and jurisdiction conferred upon him or 
her by the Board pursuant to the order dated 21-
01-2014. The reliance of the Commissioners on 
the notification dated 01.07.2010 is misplaced as 
the 
same 
does 
not 
confer 
the 
power 
of 
adjudication under section 11 of the Act of 1990.” 
 
13.   
It may be observed that while both High Courts 
have arrived at the same conclusion, they have done so for 
reasons that are not entirely consistent. The judgment passed 
by the Lahore High Court held that the presence of 
Notification-I in the field created a bar against the issuance of 
Notification-II by the CIR. This is because in Column (3) of 
Notification-I the FBR delegated its powers and functions to 
17 
CP.398-L OF 2018, etc. 
 
CIRs, therefore, these functions and powers could not be sub-
delegated by the CIR to his subordinate OIRs. However, it was 
observed by the learned High Court that if Notification-I had 
not been in force, then the CIR had the authority under 
Section 30(3) of the Act to issue Notification-II prescribing 
functions of his subordinate OIRs subject to the limits of 
territorial and personal jurisdiction.  
14.   
In our considered view, the said finding is flawed. 
It has wrongly been assumed that simply because the FBR in 
exercise of its authority under Section 30(1) of the Act has 
assigned territorial and personal jurisdiction to CIRs for the 
exercise of their functions and powers under the Act, the 
latter were prevented from exercising their statutory power 
under Section 30(3) of the Act. The impugned judgment does 
not give any reasons for such a reading of Section 30(1) and 
(3) of the Act. In fact, on a perusal of Section 30(3) it becomes 
clear that the said provision operates independently of 
Section 30(1) of the Act. Nowhere does Section 30(3) restrain 
the CIRs from delineating the territorial and personal 
jurisdiction of their subordinate OIRs. The conferment of 
power under Section 30(3) on the CIRs is meant to efficiently 
organise the team of officers subordinate to them. In the 
present case this includes the fixing of territorial and 
personal limits of each of the twelve subordinate OIRs in 
Zone-III.  
18 
CP.398-L OF 2018, etc. 
 
15. 
 
By disallowing distribution of functions by the 
CIR, the impugned judgment expects all such functions to be 
performed by the CIR himself. Apart from rendering the 
subordinate 
OIRs 
redundant, 
the 
other 
immediate 
consequence of the impugned finding is that the CIR is 
disabled from exercising his administrative and supervisory 
functions under the Act. For instance under Section 45A(4) of 
the Act, the CIR can call for and examine the record of any 
proceedings under the Act or Rules pending before his 
subordinate OIRs to examine its legality or propriety. 
However, if the CIR is personally performing all the functions 
under Section 11 of the Act (as would be the case if the 
interpretation of the impugned judgment is adopted), then he 
will be prevented from exercising his supervisory power under 
Section 45A(4) of the Act. This is because the CIR cannot 
possibly supervise himself. Similarly under Section 25(2) of 
the Act, the CIR can authorise an OIR to conduct an  
audit. However, if the view of the learned High Court is 
accepted then there is no competent statutory authority 
specified in the Act to authorise the conduct of an audit 
under Section 25(2) ibid. The same analysis applies to Section 
47 of the Act which provides for a reference to be filed by a 
subordinate OIR before the High Court on the authorisation 
of the CIR. Upon a careful evaluation, the finding of the 
learned High Court for the CIR to perform all functions of the 
OIRs under the Act is erroneous.  
19 
CP.398-L OF 2018, etc. 
 
16.   
It may also be observed that the impugned 
judgment assumes that by specifying the limits of the 
territorial and personal jurisdiction of CIRs in Notification-I, 
the FBR has assigned its own powers and functions to the 
CIRs. The distribution and assignment of functions is 
undertaken by the FBR in the exercise of its statutory power 
under Section 30(1) of the Act which provision does not 
contemplate the delegation of any of the FBR’s own powers. 
We have already observed in para-8 (supra) that the officers 
that may be appointed in eleven different grades by the FBR 
under Section 30(1) are all OIRs under the definition given in 
Section 2(18) of the Act. Hence the FBR is the competent 
authority for appointment of OIRs and for specifying their 
jurisdictional limits under Section 30(1) ibid. But the FBR is 
itself neither included in the category of such officers nor 
thereby becomes one. Since the FBR is not an OIR it does not 
possess the powers of assessment and recovery of tax vested 
in OIRs by Section 11 of the Act. If it does not possess these 
powers then it cannot delegate such powers. There is a well-
settled principle of Law: “nemo dat quod non habet” (no one 
can give what he does not have). There is no reason why the 
same rule should not apply to the delegation of functions and 
powers. Indeed, Jowitt’s Dictionary of English Law (5th 
Edn) has defined delegation to mean: 
“Delegation: Entrusting another with a power to 
act in the place of those who depute him.” 
 
20 
CP.398-L OF 2018, etc. 
 
Accordingly, the FBR does not derive its power of assessment 
or recovery of tax from Section 11 of the Act. Equally, the Act 
does not provide for the delegation of FBR’s powers to CIRs 
nor does Notification-I expressly or impliedly delegate any 
powers of the FBR to the CIRs.  As there has not been any 
delegation of its powers by FBR to CIRs, therefore, the finding 
of sub-delegation in the impugned judgment is merely an 
illusion. Consequently, the said finding in the impugned 
judgment is faulty.  
17.   
In so far as the impugned judgment has quoted 
from the Islamabad High Court in the Zaver Petroleum case 
(supra), we may briefly consider that view. It is apparent from 
the quoted excerpt that the said decision treats the 
performance of a function of an office to be different from the 
exercise of a power and duty vested in such office. Therefore, 
it has been deemed necessary that conferment of power and 
jurisdiction upon a statutory authority must precede the 
assignment of functions to such an authority. The learned 
Judge has relied to a great extent on this distinction between 
functions and powers to quash the disputed show cause 
notices. There is no cavil with the proposition that to exercise 
the functions of an office a statutory functionary must 
possess the relevant powers. However, what was perhaps not 
highlighted to the learned Court was that the exercise of 
powers forms part of the performance of the functions of an 
office. Therefore, when functions of an office are allocated by 
21 
CP.398-L OF 2018, etc. 
 
a competent instrument, the powers appurtenant thereto 
under the law stand vested in the appointee for exercise 
thereof.   
18.   
On the point that exercise of powers by a statutory 
functionary form part of the functions of his office, reference 
is made to the following definitions: 
“Corpus Juris Secundum – Volume 37. Page 
1397: Function: it is not always clear what is 
meant by the use of this elastic and indefinite 
word. It is derived from a word which signifies to 
perform, and, when relating to an office, has 
reference to the powers and duties vested in the 
office by the authority creating it.  
Stroud’s 
Judicial 
Dictionary 
– 
9th 
Edn.: 
Function: includes a power to do anything that is 
calculated to facilitate, or is conducive or 
incidental to, the exercise of a function.” 
(emphasis supplied) 
 
This Court in the case of Nazar Hussain Vs. State (PLD 2010 
SC 1021) has also interpreted the expression ‘functions’ to 
include the exercise of powers: 
“11: The powers/actions of the President under 
Article 45 of the Constitution are part of his 
“functions” and are to be exercised in accordance 
with the advice of the Cabinet or the Prime 
Minister.”  
19.   
There is also a more recent judgment of this Court 
reported as Zahid Javed Vs. Tahir Riaz (PLD 2016 SC 637) 
which has considered the expression ‘functions’ but in a 
different context. The question in that case was whether the 
quasi-judicial power of the Chancellor of the University 
(Governor of the Province) was exercisable independently or 
on the binding advice of the Chief Minister/Cabinet under 
22 
CP.398-L OF 2018, etc. 
 
Article 105(1) of the Constitution. It was held that such quasi-
judicial power could only be exercised independently by the 
Chancellor and not on the advice of the Executive. It was 
further observed that powers, functions and duties were 
analogous albeit that in the context of exercise of quasi-
judicial power, these could neither be delegated nor be 
exercised on the instructions of a third party. The relevant 
para is produced below: 
“37.  … In the foregoing paras, we have discussed 
that the term “Quasi Judicial Power” refers to 
powers which cannot be delegated and are to be 
exercised by the Persona Designata mentioned in 
the statute. Such powers, functions or duties can 
neither be delegated to any other person or 
authority 
nor 
can 
be 
exercised 
on 
the 
recommendation of any other authority or person. 
The powers, functions and duties provided under 
the scheme of the Act are to be performed or 
discharged by the person or authority designated 
by the statute and none other. …” 
(emphasis supplied) 
The above quoted excerpt is consistent with the ratio laid 
down in the Nazar Hussain case (supra) since both 
judgments hold that unless otherwise specified the exercise of 
powers form part of the functions of an office. This is also the 
opinion of the impugned judgment which negates the view 
that powers and functions of a statutory office are 
independent and removed from one another. Consequently, 
the impugned judgment has relied on an incompatible reason 
as the basis for its finding.  
20.   
Therefore, in the light of our discussion that there 
could not have been any delegation of the power of issuance 
of show cause notice in relation to assessment and recovery 
23 
CP.398-L OF 2018, etc. 
 
of tax by the FBR, which is actually conferred upon the OIRs 
by Section 11 of the Act, it is plain that the exercise of such 
powers by the OIRs forms a part of their functions under the 
Act. Accordingly, the opinion that Notification-I is the only 
source of vesting of powers in OIRs is incorrect. This view 
overlooks the effect of Section 31 of the Act and the proper 
meaning of the term ‘functions’ used in Section 30(2A) to (3) 
ibid. The impugned judgment has therefore failed to correctly 
appreciate the law discussed above. As a result, it is set 
aside. Accordingly, all these connected petitions are converted 
into appeals and allowed.    
 
 
JUDGE 
 
 
 
Islamabad, 
20.11.2018. 
Irshad Hussain/Meher LC 
 
JUDGE 
 
 
 
 
APPROVED FOR REPORTING.  
 
