Bank accounts attachment: LHC tells AGP to give an update on action against FBR officials

ISLAMABAD: Lahore High Court (LHC) has directed the attorney general for Pakistan (AGP) to update on disciplinary action taken against the Federal Board of Revenue officials, who are illegally taking the extreme coercive measure of sealing bank accounts of business community.

In this regard, the LHC has issued an order in matter of M/s GMB Steel Furnace and Re-rolling Mills (writ petition number 68336 of 2023).

The LHC has also directed the FBR chairman to submit a report on the policy and legal position on recovering the amount by taking ultimate coercive measures of sealing accounts and recovering amounts therefrom.

The AGP shall also assist the court on the legal proposition. If in the FBR’s opinion, the impugned action is not in accordance with law and economic policy, then the court should be assisted whether any disciplinary action is taken against the officers who are using such coercive measures which apparently are detrimental to the economic activities of this country, the LHC directed the AGP.

The FBR has directed the Inland Revenue (lR)-Operations Wing to chalk out the policy and legal position for taking extreme coercive measures of sealing of bank accounts of taxpayers for recovery purposes.

The FBR will submit its enforcement policy before the LHC by November 8, 2023.

According to the FBR’s instructions to the Member IR (Operations), refer to the subject noted above and find herewith Lahore High Court’s order dated October 18, 2023, in W.P.No.68336 of 2023. The case has been re-listed for November 8, 2023.

In the LHC, the counsel for the respondents (tax department) has apprised that the accounts of the petitioner have been de-sealed. It is admitted position that the impugned action of recovery under section 140 of the Income Tax Ordinance, 2001 has been taken within the available limitation to file an appeal.

However, the counsel for the respondents (Inland Revenue officers) submitted that sufficient time to approach the Appellate Tribunal Inland Revenue (“Appellate Tribunal”) was given. It is also apprised that the petitioner (steel mill) has approached the appellate tribunal where interim relief has been granted.

The counsel for the respondents, representing the officer who made recovery, submits that there is no express prohibition in law for the recovery.

Conversely, the counsel fix the petitioner (steel re-rolling mill) submitted that the time was not sufficient from the date of service. The grant of interim relief by the Appellate Tribunal itself shows that the petitioner had a good prima facie case. Therefore, the amount recovered is liable to be returned.

The counsel for the respondents, confronted that there is no direct judgment on the point whether impugned recovery cannot be affected during the period available for appeal.

For determination of the above noted legal question, learned counsel for the respondents requested for some time to further prepare and argue.

Meanwhile, the FBR chairman shall submit a report within 15 days with his signatures on the policy and legal position, in his opinion, on recovering the amount by taking ultimate coercive measures of sealing accounts and recovering amounts therefrom, the LHC order added.

Copyright Business Recorder, 2023