SC blocks retrospective tax penalties
SC also dismissed the appeal filed by the tax department
The Supreme Court has ruled against the imposition of retrospective tax penalties, stating that new financial liabilities cannot be applied to past tax matters under subsequent laws. The five-member bench resolved a legal inconsistency in previous rulings and affirmed that a tax penalty is not just procedural, but an additional financial obligation that can only be imposed with clear statutory authority.
The court dismissed the tax authorities' attempt to enforce new penalties on assessments from June 30, 2002, emphasizing that a later law cannot retrospectively create financial liabilities that did not exist when the original assessment was made. This ruling upholds the taxpayers' position and dismisses the tax department's appeal, confirming that tax laws cannot be applied in reverse to impose liabilities absent when the original tax assessment was issued.
The judgment was penned by Justice Aqeel Ahmed Abbasi, who was part of the larger five-member bench.
Written by urgent.news from The Express Tribune - Pakistan's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
