{
  "id": 12032907,
  "title": "Disputed amount under protest not admission of guilt: LHC",
  "url": "https://urgent.news/2026/10/05/disputed-amount-under-protest-not-admission-of-guilt-lhc",
  "topic": "world",
  "section": "World",
  "published": "2026-10-05T00:09:06.000Z",
  "source": {
    "name": "Business Recorder",
    "slug": "business-recorder",
    "url": "https://www.brecorder.com/news/40442673/disputed-amount-under-protest-not-admission-of-guilt-lhc"
  },
  "original_language": "en",
  "account": "The Lahore High Court (LHC) has ruled that paying a disputed amount under protest does not equate to admitting guilt in the eyes of the Federal Board of Revenue (FBR). The court dismissed the Department's Sales Tax Reference and upheld the order made by the Federal Tax Ombudsman (FTO) in favor of the taxpayer. Waheed Shahzad Butt, the taxpayer's tax lawyer, explained that the LHC's divisional bench made both rulings in a single judgment.\n\nThe case stemmed from an FBR's Directorate General of Intelligence and Investigation investigation into a possible scam involving misuse of registration numbers of registered persons. The taxpayer was summoned under Section 37 and made a payment under protest. An Order-in-Original then requested the same amount, plus a 100 percent penalty and default surcharge. The commissioner (Appeals) and the appellate tribunal inland revenue (ATIR) removed the penalty and surcharge. The FTO suggested a refund of the deposited amount under protest and the annulment of the order.\n\nThe court held that the payment under protest \"cannot, by itself, be treated as an admission of guilt.\" It also stated that such a payment cannot be considered a confession or admission of the elements of an offence without supporting evidence. A taxpayer can pay to prevent coercive consequences while retaining the right to challenge liability. Paying does not equate to confessing to a penal offence. The department must prove the elements of the offence independently. No evidence indicated that the taxpayer knowingly or fraudulently took part in the alleged scheme.\n\nThe court noted that liability cannot be imposed based on assumptions, and that output tax is the supplier's responsibility. The default surcharge under Section 34 is mandatory and does not require intent (mens rea). However, the department could not prove the underlying statutory default or the computation, so the surcharge could not be upheld. The LHC ordered this decision. Waheed Butt also emphasized that the FTO's order to refund the amount paid under protest was a significant victory.",
  "summary": "ISLAMABAD: The Lahore High Court (LHC) has ruled that payment of a disputed amount under protest cannot, by itself, be treated as an admission of guilt before the Federal Board of Revenue (FBR). It dismissed the Department’s Sales Tax Reference and confirmed the order passed by the Federal Tax Ombudsman (FTO) in favour of the taxpayer. Tax lawyer Waheed Shahzad Butt, who had represented the…",
  "key_points": [
    "Lahore High Court rules payment under protest doesn't admit guilt.",
    "FBR investigation into possible scam dismissed.",
    "Taxpayer can challenge liability while paying to avoid consequences."
  ],
  "editors_take": "The Lahore High Court's ruling clarifies that paying a disputed amount under protest does not imply guilt, allowing taxpayers to make payments to avoid penalties while still challenging their liability.",
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}