2026 S C M R 833

 2026 S C M R 833

[Supreme Court of Pakistan]

Present: Yahya Afridi, CJ, Muhammad Shafi Siddiqui and Miangul

Hassan Aurangzeb, JJ

HASEEB WAQAS SUGAR MILL LIMITED and another ---Appellants

Versus

GOVERNMENT OF PAKISTAN through Secretary Finance and others

---Respondents

Civil Appeals Nos. 1388 to 1392 of 2017 and C.M.As. Nos. 1917-L to

1919-L, 964-L and 966-L of 2015, decided on 9th September, 2025.

Civil Appeals Nos. 1388 to 1392 of 2017

(On appeal from the judgment/order dated 12.02.2015 passed by the

Lahore High Court, Lahore in S.T.Rs. Nos. 116, 127 of 2007, 14 of 2008,

21 of 2009 and 185 of 2011).

And

C.M.As. Nos. 1917-L to 1919-L, 964-L and 966-L of 2015

(Stay Applications).

Sales Tax Act (VII of 1990)---

----S.47---Income Tax Ordinance (XLIX of 2001), S.133---Question

raised before High Court for the first time --- Reference jurisdiction of

the High Court---Scope---Whether a question(as one of limitation in

the present case), if not raised in the lower fora, could be raised and

argued before High Court in Reference jurisdiction---Held: The scope

of reference is now extended to the extent of an appeal, which is

continuation of main lis and in consequence thereof such principles

considering the statutory frame of reference jurisdiction are also

attracted---The law allows all questions arising out of the order to be

referred and not just questions argued or raised before the tribunal --

-The question of limitation is always considered as an integral part of

main lis and can never be isolated, be it special/appellate or regular

plenary jurisdiction, etc.---Limitation ought to have been decided as it

is always betrothed with the litigation---Limitation is attached with

litigation in such a way that it becomes court's duty to look into it as a

priority, on its own---It is not the case of the respondents /Department

that the orders were not passed beyond the period mandated under

the law but that the question of limitation was never raised in the

lower fora so cannot be agitated in the reference jurisdiction---Thus,

it is not only those questions which have been pleaded and raised

before the lower fora which could be agitated in the reference

jurisdiction but would also include those which arise out of the order

of the Tribunal---The order of the Tribunal talks about passing of

order-in-original and thus its validity, in terms of timeframe as

contoured by relevant statute, is to be adjudged and should have

been adjudged, which indeed arises out of the order---There is nothing in the referred provision of the reference jurisdiction to

prevent the appellants from raising such question of law which can

be made out and seen from the contents of the order, impugned in

reference jurisdiction---Therefore, the High Court erred in the special

jurisdiction under Section 47 of the Sales Tax Act, 1990 (which is pari

materia to Section 133 of the Income Tax Ordinance, 2001 ) by not

allowing the appellants to raise the questions of law that could be

seen flowing and arising out of the order---Supreme Court set-aside

the impugned judgment/orders---Appeals were allowed.

Messrs Squibb Pakistan Pvt. Ltd v. Commissioner of Income Tax

2017 SCMR 1006 and Commissioner of Inland Revenue v. Messrs Rafeh

Limited PLD 2020 SC 518 ref.

Hisham Ahmed Khan, Advocate Supreme Court and Ijaz Ahmad

Awan, Advocate Supreme Court (Through Video-link from Lahore) for

Appellants (in all cases).

Ch. M. Zafar Iqbal, Advocate Supreme Court and Dr. Ishtiaq Ahmad

Khan, Director-General, Law, FBR for Respondents.

Date of hearing: 9th September, 2025.

JUDGMENT

MUHAMMAD SHAFI SIDDIQUI, J.---The primary question that came

for consideration before the High Court in the referred Sale Tax

Reference (S.T.R. No. 14 of 2008) is reproduced hereunder:

Whether the adjudication vide Order-in-Original involved is

hopelessly Time Barred and this prime fact which is also a

paramount question of law has been taken care of/adjudicated

upon by the foras below? .

The follow up question which was decided is:

Whether such question, if not raised in the lower fora, could be

raised and argued before High Court in reference jurisdiction.

2. This common question of law was decided in all connected civil

appeals, therefore, we propose to decide this bunch wherein leave was

granted on 01.11.2017, by a common order.

3. The impugned judgment concluded the above question in terms of

its paragraph 15, whereby it was held that no doubt the Court

(reference jurisdiction) exercises a special jurisdiction under section

47 of the Sales Tax Act, 1990 (hereinafter referred to as the Act )

however that jurisdiction merely extends to decide the question of law,

which arises out of the order and not otherwise. The court, in its order

restricted itself not to go into any question of law raised for the first

time before it. In paragraph 16 of the impugned judgment, it concludes

that the reference applications do not give rise to a question of law to

arise from the orders of the appellate tribunal and thus the references

were dismissed . 4. We have heard the learned counsel for the parties and perused

the material available on record. The reasons that prevailed with the

High Court was of a special jurisdiction being exercised under section

47 of the Act which, according to the judgment could only be extended

to the question of law that arises out of the order. Perhaps the view in

the impugned order was that it is restricted to question raised before

lower fora and decided and that new question of law (even if arises

out of order) cannot be framed and that in terms of paragraph 16

(referred above) reference application devoid of such order.

5. In our understanding this concept/principle is completely alien, as

the order give rise to a question and not reference application.

6. As to the scope of reference jurisdiction under the relevant

statute, the matter came up for consideration with reference to Income

Tax Ordinance, 2001. There is no cavil to the proposition that the scope

of reference is now extended to the extent of an appeal, which is

continuation of main lis and in consequence thereof such principles,

considering the statutory frame of reference jurisdiction are also

attracted. In terms paragraphs 49 and 50 of the Messrs Squibb

Pakistan Pvt. Ltd v. Commissioner of Income Tax (2017 SCMR 1006),

this Court has held that:

49. An independent interpretation of section 133 of the Ordinance,

2001, as it stands today, on the plain language of the law,

liberated from the burden or benefit of earlier judgments, would

make the position very clear. Subsection (1) confers a right on

any person or the Commissioner aggrieved by a final order of

the Appellate Tribunal to file an application before the High

Court along with a statement of the case stating any questions of

law arising out of the Tribunal s order. There is a direct right to

approach the High Court in a similar manner as in appeals,

revisions, reviews etc. The order being challenged is the final

order but the challenge is limited to questions of law only. The

statement must set out the facts, the Tribunal s determination

and the questions of law which arise out of its order in terms of

subsection (3). The questions of law which may be referred are

only those which arise out of the order of the Tribunal. On the

plain language of the law, this would include any question which

can be made out from the order of the Tribunal. There is nothing

in the scheme of the section to impute any extraordinary

limitations on the type of questions which may be posed. The

facts as stated in the Tribunal s order have to be taken as

recorded and any question which can be made out from those

facts may be raised in an application under section 133 ibid,

regardless of whether it was previously urged or not. There is

absolutely no reason for confining the questions which may be

referred to only those which were argued before the Tribunal on

the hypothesis that this is an advisory jurisdiction as that is not

what the language of the law contemplates. The law, as it stands,

allows all questions arising out of the order to be referred and

not just questions argued or raised before the Tribunal. 50. Section 133 ibid clearly states that upon hearing a case, the High

Court is obligated to decide the question of law raised by the

reference and pass judgment thereon and the Tribunal s order

automatically stands modified by the order of the High Court.

This is an extremely significant aspect as it is the essence of an

appellate order that it per se modifies the order of the lower

forum, or, in other words, merges into it. As pointed out above,

this particular aspect of section 133 ibid was introduced for the

first time by way of the 2005 amendment and was not present in

section 66 of the Act, 1922 during the brief period between 1971

and 1974 when the law was similar to the present one. It is

therefore clear beyond any doubt that the remedy under section

133 ibid is appellate in nature and must be construed and

applied as such. The language of the law must be given effect to,

rather than unnecessarily restricting the scope of the

jurisdiction on the basis of judgments from an era when the law

and circumstances were completely different. The civilized

world, including our own country, has been moving towards

greater rights for citizens over the last century to the extent that

the privilege of a fair trial has now become a constitutional

right. In these circumstances, it is not appropriate to restrict the

scope of a legal remedy available to citizens on the basis of old

decision, especially when the language of the law is clearly

pointing in the opposite direction.

The question of limitation is always considered as an integral part of

main lis and can never be isolated, be it special/appellate or regular

plenary jurisdiction etc. Limitation ought to have been decided as it is

always betrothed with the litigation. It is attached with litigation in

such a way that it becomes court s duty to look into it as a priority, on

its own.

7. The matter of treating the reference as an appeal came for

consideration in another case of Messrs Rafeh Limited

1 which to a

large extent reiterated the principles laid down in the case of Squibb

Pakistan Pvt. Ltd. It is not the case of the respondents that the orders

in all cases, were not passed beyond the period mandated under the

law. The only contention was that the question of limitation was never

raised in the lower fora hence cannot be agitated in the reference

jurisdiction, which question was set at rest in the light of the aforesaid

judgments of Squibb Pakistan Pvt. Ltd. and Messrs Rafeh Limited.

8. It is thus not only those questions which have been pleaded and

raised before the lower fora which could be agitated in the reference

jurisdiction but would also include those which arise out of the order

of the Tribunal. The order of the Tribunal talks about passing of order-

in-original and thus its validity, in terms of timeframe as contoured by

relevant statute is to be adjudged and should have been adjudged,

which indeed arises out of the order. There is thus nothing in the

referred provision of the reference jurisdiction to prevent the

appellants from raising such question of law which can be made out and seen from the contents of the order, impugned in reference

jurisdiction. The conclusion of paragraph 49 of the Squibb case

judgment has an overriding effect and that is the law, as it stands

which allows all questions arising out of the order to be referred and

not just questions argued or raised before the Tribunal.

9. Thus, the learned High Court erred in the special jurisdiction

under section 47 (which is pari materia to section 133 of the Income

Tax Ordinance, 2001) by not allowing the appellants to raise the

questions of law that could be seen flowing and arising out of the

order.

10. Therefore, the instant bunch of civil appeals are allowed and the

impugned judgment/orders are set aside. The listed CMAs are disposed

of.

MQ/H-6/SC Appeals allowed.