Pending case of a fertiliser co: IHC asks FBR to submit its cost of litigation

ISLAMABAD: Islamabad High Court (IHC) has directed the Federal Board of Revenue (FBR) to submit its cost of litigation in a pending case of a fertiliser company, on the issue of super tax imposed under Section 4C of the Income Tax Ordinance, 2001.

On the issue of cost of litigation, the FBR has also issued directions to the Chief Commissioner Inland Revenue, Large Taxpayer Office (LTO), the Corporate Tax Office (CTO), and Regional Tax Office (RTO), Islamabad.

According to the FBR’s instructions to the field formation, the chief commissioners should visit the website of the IHC to ascertain taxpayers falling under their respective jurisdiction whose cases are fixed before IHC.

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The case has now fixed for October 18, 2023.

When contacted, tax lawyer Waheed Shahzad Butt told this correspondent that the matter of cost of litigation on the part of the FBR has been pending since long.

According to the FBR’s data, the litigation to the tune of Rs2.3 trillion is pending in courts.

While earlier a stricture has been passed by the highest quasi judicial forum of Pakistan (president) against the FBR field formations, which states, it is surprising that such simple matters are not dealt with expeditiously by the FBR. If any doubt (FBR) remained after their first visit, they could have physically revisited the place again. More effort has been spent contesting this issue rather than solving it. It is not only bad for the image of FBR and all tax authorities and increases public resentment of such processes. Please send a report and reasons why this miscarriage happened, justice was delayed and why time has been wasted of this highest forum, the President’s directions added.

He stated that the litigation involves costs of various types including opportunity cost, legal remuneration and man-hours spent on preparing appeals and defending cases before various appellate fora, both on the part of the department, as well as, the taxpayer including working hours utilised by the officer of Inland Revenue, CIR, Add-CIR, CCIR, CIR-Appeals, FTO, ATIR, High Courts and Supreme Court, Waheed Butt added. The order of the IHC stated that the petitioner companies are aggrieved of the retrospective increase of the rates of super tax for the tax year 2023 and onwards with retrospective application.

The petitioners referred to a judgement of the IHC in a writ petition (4027-2022) that retrospective revision of the rates of the income tax was invalid.

Copyright Business Recorder, 2023