ISLAMABAD: The Attorney General for Pakistan (AGP) told the Supreme Court that immediate steps will be taken soon to make the Policy Board of the Federal Board of Revenue (FBR) fully functional.
AGP Mansoor Usman Awan also submitted that the legal questions, raised in order dated 14.03.2024, will be fully addressed in the upcoming Finance Act. He stated that as far the establishment of the Policy Board is concerned, immediate steps will be taken and it is expected that the Policy Board will be fully functional shortly.
During the proceeding, the Court noticed that the Policy Board envisaged under Section 6 of the Act has not been given effect to. Further, Section 14 of the Act provides for collection and maintenance of data bank which has also not been fully established because in a number of cases before us FBR is not in a position to apprise the Court whether the FBR has filed appeal against its earlier orders and whether the issue before the Court today stands resolved in earlier round of litigation. Such a data can expedite tax cases and can be of assistance to the courts and needs to be developed accordingly.
Rs3.2trn cases stuck in courts: ‘Loopholes’ mar FBR’s legal operation: AGP
A three-judge bench, headed by Justice Syed Mansoor Ali Shah and comprising Justice Athar Minallah and Justice Irfan Saadat Khan heard the petitions which challenged the notification dated 05.08.2020 issued under Section 209 of the Income Tax Ordinance, 2001 by virtue of which Chief Commissioner Inland Revenue, Karachi was conferred the jurisdiction over LTU based in Quetta. Similarly, the Chief Commissioner LTU, Islamabad was given jurisdiction over LTU cases of Peshawar. The result of this was that LTU cases in Quetta and Peshawar stood transferred to Karachi and Islamabad respectively.
As the Court was informed that the said notification was withdrawn vide orders passed by the Board dated 12th and 13th March 2024. The bench, therefore, disposed of petitions as they have borne fruit, but adjourned the case to 2nd week of July to consider the legal questions which were raised during the proceeding on 14-03-2024.
Number of legal questions raised, included;
The scope and extent of delegation of the powers of the FBR under Section 8 of the Federal Board of Revenue Act, 2007 especially when the said delegation overrides the provisions of other tax laws.
Whether Commission Inland Revenue (Legal) LTU, Karachi was authorized and could maintain a petition before us instead of the FBR?
Whether the Regional Tax Office, Quetta and Chief IR (Formation), FBR who have arrayed as proforma respondents engage a separate counsel when FBR is already being represented through a counsel?
During the course of hearing of this case we sent for the Member (Legal) and Member (Operations) FBR to assist the Court; one of the Members engaged a counsel before this Court. The question is whether Members of the FBR can engage independent counsel for representation before us (SC) when FBR is already represented through a counsel before us.
The Court on March 14 had directed the AGP to attend the questions on next date. The attorney general appearing before the Court on April 23, argued that Section 8 of the Federal Board of Revenue Act, 2007, which deals with functions and powers of the Board needs a revisit and reexamination so as to clarify whether the “delegation” in the said provision applies to the powers vested in the Board relating to all the fiscal laws, which do not provide for any such delegation in their respective laws; second, the delegation under Section 8 of the Act has to be subject to such conditions “as it deem necessary” and no such conditions have been spelled out in the delegation notification.
AGP Mansoor frankly conceded that delegation of the powers of the Board under Section 8 to any “government agency” or to “an employee” of the FBR appears to be beyond the scope of the law and needs reconsideration.
The case is adjourned until 2nd week of July.
Copyright Business Recorder, 2024
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