Two recent Supreme Court decisions, arising from entirely different facts, converge on a single point worth attention from anyone conducting tax litigation. Legal discipline is not optional at any stage of a case, and its absence carries consequences no later argument can undo.
In the first, the Court restored a tax office's original order disallowing an input tax adjustment under Sections 3, 8(1)(ca), 8A, and 73 of the Sales Tax Act 1990, setting aside contrary findings from both the High Court and the Appellate Tribunal Inland Revenue. What makes this ruling significant is the reasoning. The lower forums had treated certain points as effectively conceded during argument, and had treated the matter as involving only questions of fact rather than law. The Supreme Court rejected both premises. It held that a concession made by counsel on a legal question can never bind a court, because there is no estoppel against a statute, a principle that exists precisely to prevent a party's tax liability turning on an advocate's slip rather than the correct legal position. The Court further held that these sections raised genuine questions of law, meaning the case should never have been disposed of as a pure factual dispute.
The second decision cuts the opposite way, against the department rather than the taxpayer, turning on an equally fundamental principle, limitation. FBR's own tax reference was dismissed after the Supreme Court found it filed outside the statutory ninety day period under Section 47 of the Sales Tax Act. The reference had originally been filed with five days still remaining, was returned by the High Court for removal of minor objections, and was re filed a full month later despite only three days granted for compliance. No explanation for the delay was offered. The result was loss of a multi billion rupee revenue claim, not on merits, but purely on procedure.
Read together, these rulings say something practitioners on both sides should internalise. Courts will not rescue a case from a conceded legal point simply because the underlying statute favours a different reading, and will not excuse a missed limitation period simply because the amount is large or the delay looks administrative rather than deliberate. The Sales Tax Act's architecture, from substantive sections like 3, 8, and 73 to procedural provisions like Section 47, is treated as equally binding regardless of which party benefits from strict enforcement.
For anyone conducting tax litigation, the lesson is straightforward. Guard every legal concession as carefully as the substantive argument itself, since it cannot be walked back later. And treat every limitation deadline as immovable, since neither the size of the claim nor institutional identity offers protection once it has passed.
Muhammad Rehan Sarwar
Advocate High Court,
The Nomologists Law Firm
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