ISLAMABAD: The office of the Attorney General for Pakistan (AGP) has identified deficiencies in the Federal Board of Revenue’s legal department that result in the filing of a large number of petitions with superior courts for a stay against tax recovery due to non-adherence to legal procedures for taxpayers.

This matter has been brought to the surface in a letter, the second in a week from the attorney general’s office (AGP). This comes after Prime Minister Shehbaz Sharif’s directive to expedite the hearing of cases related to a staggering Rs2 trillion stuck in courts as the top tax authorities failed to meet their targets in the past two months.

The issue gained traction when FBR Chairman Zubair Tiwana briefed the prime minister about an amount of Rs2.383tr stuck in court cases. Prime Minister Shehbaz met Chief Justice of Pakistan Qazi Faez Isa after the briefing and requested that tax cases be expedited.

The stay petitions are filed primarily because taxpayers’ appeals are not heard or entertained before the Commissioner (Appeals), and the department withdraws funds from taxpayers’ accounts shortly after the passing of an order-in-order (OIO) without serving such order on the taxpayer.

The AGP office also attached a four-page letter dated May 8 from an assistant attorney general (AAG) in Karachi requesting that an exercise be conducted to identify such cases and a compliance report submitted as the case is scheduled for hearing on May 20 before the Sindh High Court (SHC).

The AAG stated in his letter that the SHC had repeatedly expressed its annoyance over the FBR’s failure to devote a comprehensive mechanism to handle similar situations, a mechanism that allows taxpayers to seek legal redress before coercive measures are reported for recovery. Taxpayers take advantage of this scenario by approaching the High Court with requests for interim orders because they have no other option.

This not only aggravates the burden on high courts but also costs time, energy and money because substantial amounts are paid under the head of `professional fees’ to counsel in these types of petitions, which are filed in large numbers daily.

The AAG further claimed that the court had instructed the FBR’s legal department to assist the court in the matter because the bench was hearing many petitions on the same subject. The case was scheduled for May 6 and a report was presented on behalf of Member (legal), but it did not address the issue identified by the court in its previous decision.

The AAG requested that a proper mechanism be developed and notified to this effect.

FBR wants special benches

Meanwhile, the FBR has sent letters to high court registrars requesting that special benches be established to expedite the adjudication of tax-related matters. The special benches will have two judges from the highest courts.

Published in Dawn, May 15th, 2024