LHC restrains FBR from making further tax recovery from PASSCO

The Lahore High Court has barred the Federal Board of Revenue from pursuing additional tax collection against the Pakistan Agricultural Storage and Services Corporation, according to Business Recorder. The interim order also lets the state-owned entity keep operating its bank accounts until the next hearing, set for October 15, 2026.

PASSCO's counsel, Ch. Anwaar-ul-Haq Arif, told the bench that the corporation had challenged a June 22, 2026 assessment order before the Commissioner (Appeals), which dismissed the appeal on September 14, 2026. Because it is government-owned, PASSCO could pursue alternative dispute resolution through Section 134A of the Income Tax Ordinance, 2001, and it filed that petition on September 25, 2026. Counsel also noted that collection is treated as suspended after the ADR Committee is formed under Section 134A(7).

Counsel argued that the tax department had authorised recovery under Section 140 before the ADR petition was lodged, and part of the disputed sum was taken from PASSCO's bank accounts on the same day a recovery notice was issued. The petitioner says this clashes with a Supreme Court ruling in the Pakistan LNG case, where same-day collection under Section 140 was found unlawful. Welcoming the order, Counsel Arif said disputes between state bodies should be settled through dialogue rather than forced recovery, and he described the ruling as protecting public resources.