The Islamabad High Court (IHC) on Tuesday issued an injunction on the government’s decision to block the mobile phone SIMs of non-tax filers.

On Friday, telecom operators agreed to initiate the manual blocking process in small batches of non-filers, ending the week-long standoff over the implementation of the tax machinery drive to broaden the tax base.

The understanding was reached after the Federal Board of Revenue (FBR) held crucial meetings with the Pakistan Telecommunication Authority (PTA) and telecom operators to implement Income Tax General Order No. 1, issued under Section 114 B of the Income Tax Ordinance 2001.

On April 30, the FBR released a comprehensive list of 506,671 individuals who failed to file their tax returns for 2023. As a penalty, their mobile phone SIMs will be promptly blocked. However, telecom providers objected to the decision and delayed its execution, which was made under an act of parliament.

An official announcement issued by the FBR said that after several deliberations, the telecom operators have agreed to initiate the manual blocking process in small batches until their systems are fully equipped to automate it.

IHC Chief Justice Aamer Farooq heard the petition of private telecom operator Zong.

During the hearing, the petitioner’s lawyer Salman Akram Raja argued that the Constitutional amendment done in this regard was in violation of the basic right of freedom of business granted in Article 18.

“There can be no legislation contrary to the fundamental rights given in the Constitution,” he said.

The government cannot get the power to block people’s mobile phone SIMs by amending the law, Advocate Raja contested.

He noted that if more than 500,000 SIMs were blocked, there will be a loss of Rs1 billion annually.

The IHC sought a response from respondents by May 27.

Initially on May 4, PTA had refused the FBR’s demand to block the mobile phone SIMs, saying its execution did not fall within its jurisdiction and thus the order would have “no legal binding effect” since it was inconsistent with the applicable legal framework.

Then on May 7, telecom companies had collectively forwarded their concerns to the Ministry of IT that the FBR’s decision to block SIMs of non-filers was made in undue haste and will adversely impact telecom customers.

The letter by the cellular mobile operators (CMOs) said that they were obligated to provide uninterrupted services to their customers except in the circumstances mentioned in the Telecom Act and applicable regulations; there are no instances wherein CMOs can disconnect or block the service of any customer.