ISLAMABAD: Islamabad High Court (IHC) Chief Justice Athar Minallah on Friday suspended the Federal Board of Revenue’s (FBR) notification to the National Bank of Pakistan (NBP), asking it to recover tax from the district administration’s accounts which it had defaulted on.

The capital administration, through Advocate Danyal Hassan, had filed a petition with the IHC against the notice.

The FBR’s regional tax office on Dec 22 had issued a notice to the NBP for recovery of Rs2.38 billion in tax from the accounts of the Islamabad Capital Territory (ICT)administration after it failed to pay the dues.

It stated that the administration had defaulted on over Rs2.38 billion in tax.

The notice asked the bank management to “remit or send the money to the commissioner inland revenue, withholding zone, regional tax office, Islamabad, through pay order/demand draft or through banking transfer or cheque for payment to the government, treasury under income tax head of account.”

The FBR warned the bank management that “in case of failure to comply with, the amount shall be recovered from you [the bank]”.

The district administration’s counsel argued that the liabilities had not been determined in accordance with law and the notice was issued without any lawful authority.

He told IHC Chief Justice Athar Minallah that if the accounts of the ICT administration were forfeited it would not be able to disburse salaries to its Christian workers on the occasion of Christmas.

Justice Minallah therefore suspended the FBR’s notification for a fortnight and adjourned the hearing.

It may be mentioned that the district administration collects revenue under various heads and a major chunk comes from excise and taxation and sale, purchase and transfer of properties.

In some recent cases, big housing societies and real estate developers deliberately kept the mutation of purchased land incomplete to avoid payment of taxes.

In addition to the incomplete mutation of over 1,200 kanals near Koral since January this year, transfer of 889 kanals in village Phulgaran could not be completed since 2019.

As a result, the additional deputy commissioner (revenue) issued instructions that the patwari of each revenue estate was responsible for collecting taxes and applicable fee at the time of registration of properties or should file a report in case of non-deposit of the fee.

Published in Dawn, December 25th, 2021