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KARACHI The Islamabad High Court (IHC) has suspended all the administrative measures recently taken by the Federal Board of Revenue (FBR) which effected merger of sales tax, federal excise duty with income tax, creation and re-designation of posts and putting direct taxes under the control of member Inland Revenue.
In an order issued on May 5, 2009, the IHC suspended all the notifications issued by the FBR in this regard.
The counsel of the petitioners contended that re-distribution of functions among the services groups of FBR or creation of new occupational groups was not within the powers of the board and it is exclusive domain of the Establishment division.
In a petition filed by Dr Muhammad Zubair Yousfani and other officers of the Customs and Excise group against the Federation of Pakistan and others prayed before the court that the respondents with malafide intentions have snatched the excise and sales tax assessment and collection functions from the group and have given the same to the Income Tax group.
Besides, the FBR has handed over the administration of direct taxes, sales tax and federal excise duty after their merger and integration into a single body of Inland Revenue to a new position, which has been created recently under the head of 'Member Inland Revenue.'
All these changes and creation of new posts such as member Inland Revenue, re-designation of posts and merger of taxes were effected by the FBR by issuing simple notifications.
The counsel of the petitioners further prayed that under the Federal Board of Revenue Act 2007, the board does have the powers to re-designate posts, but it cannot assign functions of one service group to another.
It was also prayed that the petitioners being officers of federal excise group, after having been selected through the CSS exams, have acquired vested right to serve in the customs, sales tax and federal excise departments. Therefore, appointment of the officers of Income Tax group for administrating federal excise and sales tax would tantamount to gross infringement of these rights.
The counsel of the petitioners maintained that no legislative amendment had been made by the parliament to this effect, the purported appointment of member Inland Revenue by the respondents, without first creating the 'Inland Revenue Service,' as required by the Civil Servants Act, 1973 read with Civil Servants (appointment, promotion and transfer) Rules, 1973, Occupational Groups a nd Services Rules, 1990 and the FBR Act, 2007, is blatantly unlawful, void and a naked aggression against the sovereignty of the parliament.
The petitioner's counsel also complained that the FBR instead of readdressing the grievances of the petitioners had removed all those officers from their respective offices, who raised voice against these illegal and malafide intentions of the respondents.
