I. BACKGROUND (BG)
 

1. This refers to the related Important TLQCs in trail, blue, italic and double line viz (a) 2636 of ------ about PST SCNs held via PRA invalid by LHC (b) 3010 of ------- about SSTR for Hotels, Internet, Manpower, Franchise, EP, etc

2. We also refer to several Other TLQC including (a) 2874 of ----------- about Input Tax Adjustment on Hoteling & Vehicle – ATIR-MA (b) 2853 of ------------ about Punjab Sales Tax Act, 2012 and KCV (c) 2812 of ----------- about Punjab Finance Act 2024 Gazetted

II. EXECUTIVE SUMMARY

1. The case involves an intra-court appeal (ICA) filed by the Punjab Revenue Authority (PRA) against -------------- Hotels and ------------and others.

2. The dispute centers on the imposition of Punjab Sales Tax on Services—particularly whether services provided by the hotel and property group fall within the taxable ambit under the Punjab Sales Tax on Services Act, 2012 (PSTA).

3. The High Court examined jurisdictional issues, the applicability of tax on composite or bundled services, and earlier precedents keeping in view section 39 of PSTA.

4. The judgment dismissed the PRA’s appeal, upholding the earlier decision in favor of -------Hotels, meaning that the tax demand raised by PRA was not sustainable.

III. DETAILS

A . Case Law

1. Reference & Brief Facts

1. Further to KQU 3642 of ----------, being and important matter, we would inform you about  ------------------------------------ (Attachment 3343.1 unreported order, found from reliable resources recently) in ensuing paragraph, with emphasis ours in bold & Underline for quick reading.

2. Through this single order, LHC decided the titled Intra Court Appeal -----------------------Attachment 3343.1 as a common question of law is involved in all these appeals.

2. Learned Counsel Appellant Taxpayer / Submission

Learned counsel for the appellant submits that in view of the amendment in Section 39(1) of the Punjab Sales Tax on Services Act, 2012 with retrospective effect from 1.7.12 made through Punjab Finance Act, 2024 (PFA), all these appeals have become infructuous. Further submits that the appellant will issue Fresh Notices to the Respondents in the light of the aforesaid amendment.

3. Learned Counsel Respondents / PRA Submission

Learned counsels for the Respondents have raised objection that these appeals have been filed by incompetent persons as such the same are liable to be dismissed. Further submits that as Section 39(1) of the Punjab Sales Tax on Services Act, 2012 has been amended as such these appeals have become infructuous.

4. LHC Submissions

In view of the statement of Learned counsel for the appellants, all these appeals are hereby disposed of being infructuous in terms of Section 39(1) of the PSTA. However, the appellant-authority can issue Fresh notices to the respondents as per law.

B. Kasbati & Co - Section 39 of PSTA & Punjab Finance Act 2024

Section 39 of PSTA showing deletion by Punjab Finance Act 2024 in track is reproduced below in Italic:

39. Appointment of authorities.– (1) For purposes of this Act and the rules, the Authority may, in the prescribed manner and by notification in the official Gazette, appoint in relation to any area or cases specified in the notification, any person to be a–

(a) Commissioner;

(b) Commissioner (Appeals);

(c) Additional Commissioner; 

(d) Deputy Commissioner;

(e) Assistant Commissioner;

(f) Audit Officer;

(ff) Audit-cum-Risk Compliance Officer;

(fff) Enforcement Officer;

(g) Inspector; or

(h) An officer of the Authority with any other designation.

(2) to (7) ..........

(8)  All jurisdictional and competency issues arising under this Act or the rules shall be decided by the Authority in such manner as it thinks fit.

C. Kasbati & Co Views

The above amendment proposed was to counter earlier judgment of the Lahore High Court order in case of 29.5.25  Nishat Hotels & Properties Ltd Vs Punjab, etc in WP 16217 of 2020 (TLQC 2636 of 9.2.24 in trail refers). However, effectively LHC has given in Taxpayer favour.

III. FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

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