PESHAWAR: A Peshawar High Court bench through a stay order on Tuesday temporarily stopped Federal Board of Revenue (FBR) from acting on its recent order whereby several taxation related matters of around 200 industrial units of Khyber Pakhtunkhwa were transferred from Peshawar Regional Tax Office (RTO) to Large Taxpayer Unit (LTU) Islamabad.

The bench of Justice Qaiser Rashid Khan and Justice Ijaz Anwar issued notices to FBR chairman, federal revenue secretary and RTO chief commissioner, directing them to file replies within a fortnight to five identical petitions filed by several industrial units including Alpha Pipe Industries and others.

The bench fixed September 10 for next hearing with the direction that FBR should not operate on the impugned order issued on August 5 through which the jurisdiction of the petitioners over income tax, sales tax, federal excise, etc was transferred to LTU Islamabad from Peshawar RTO.

Court issues notices to FBR chairman, federal revenue secretary and RTO chief commissioner

Advocates Ishaq Ali Qazi and Qazi Ghulam Dastgir appeared for petitioners and stated that the Chief (IR-Formation) of FBR had issued the impugned jurisdiction order on August 5 and directed that the same should take effect from August 10.

They stated that through the impugned order the jurisdictions of chief commissioner and commissioner Inland Revenue were revised and the jurisdiction of different industrial units registered in KP was assigned to commissioner LTU Islamabad.

They stated that the jurisdiction related to income tax, sales tax, federal excise, etc. of a large number of industries including that of the petitioners were transferred to LTU and after August 10 their cases for the purpose of assessment and refunds etc would be processed there instead of RTO Peshawar.

The counsels contended that there was no justification provided in the impugned internal jurisdiction order of FBR that for what purpose and on what basis their jurisdiction was changed from RTO to LTU.

They said that the impugned order was discriminatory treatment between industries as industries or units of the same nature in other parts of the country were presently being assessed in their respective RTOs.

They argued that Sales Tax Act clearly gave right of selecting jurisdiction to the taxpayer. Furthermore, they stated many units operating in the sector throughout the country and if only few units were handpicked and shifted to LTU it would be broad discrimination.

The counsels said that government and tax collection authority were meant to facilitate the taxpayers instead of creating obstacles in the smooth running of their business activities.

Senior advocate Abdul Lateef Afridi, who was present in the courtroom, contended that such acts gave birth to sense of deprivation.

He stated that the province was already hit hard by terrorism and in such like situation asking the industrial units to approach LTU at Islamabad was an injustice.

Published in Dawn, August 26th, 2020