The Federal Board of Revenue (FBR) allegedly interferes with the quasi-judicial functions of the Commissioners of Appeal Inland Revenue. A report published in an English daily, not in this newspaper, on September 28, 2021 states: and the overall quality of orders-in-original by the office of the domestic revenue officer. The report, if correct, shows a flagrant violation on the part of FBR. It may be noted that in the presence of binding Supreme Court judgments that no interference should be made in the affairs of the tax appeal authorities can lead to serious consequences for those who render them.
The most undesirable aspect of the saga is that FBR wants to show higher collection from claims created in billions (report says 3 trillion rupees). According to the report, appeals commissioners are now asked to “give the reasons for the number of orders for which a substantial amount (tax) is being removed, as well as the reasons for the removal”. In other words, they are intimidated because they give relief when it is due. The report further states: “The instructions came after a sharp increase in taxation orders by the RBF against taxpayers and, according to legal experts, many of these orders had no judicial basis. FBR spokesperson Dr Asad Tahir Jappa did not answer questions on the legal basis for subordinating Commissioners’ appeals to a chief commissioner ”.
Interestingly, when a query was sent to the FBR president, official spokesperson, and IRS legal member to verify the veracity of the above, it was labeled “incorrect” by the appeals officer. commissioners. According to him: “No instructions were given to CIR Appeals to report on performance to training in the field. The grounds for deletion are recorded in the appeal order. FBR does not interfere with the judicial functions of CIR appeals. The legal wing deals with administrative matters. The author of the story before writing should have at least obtained first-hand information from an IRC appeals office ”. The story scribe made it clear that the official spokesperson chose not to respond. He filed a story after “due diligence” and produced alleged evidence. It’s up to FBR to refute it.
The crux of the matter is that appellate authorities, in law and in principle, should be independent in the true sense of the word. The Honorable Supreme Court of Pakistan elaborated on this principle in Government of Baluchistan v Azizullah Memon PLD 1993 SC 31 stating that “the separation of the judiciary from the executive is the cornerstone of the independence of the judiciary”. The right of access to justice for all is a well recognized inviolable right enshrined in the Constitution of the Islamic Republic of Pakistan [“the Constitution”]. This right requires that every citizen be treated in accordance with the law. All citizens have the right to a fair and proper trial and the right to an impartial court or tribunal. — PLD 1982 SC 146.
Instead of making the appeals commissioner independent, the government further strangled the tax appeals system down to court level. This is an open parody of justice and a flagrant violation of Articles 4, 10A and 189 of the Constitution, as highlighted in Subverting Tax Tribunaux, Business Recorder, January 24, 2020.
It is common knowledge that the office of Member Legal has hampered the independence of the First Appeal Forum. It was reported in “Commissioners (Appeals): FBR Withdraws Instructions, Business Recorder, February 27, 2021. He asked Commissioners (Appeals)” to use investigative powers under tax laws (income tax, sales tax and DEF) to avoid unnecessary cancellation with instructions ”. He was later withdrawn under pressure from tax bars. The foregoing has confirmed that Member Legal had interfered in the past with the quasi-judicial functions of its subordinate officers and its claim to only issue administrative instructions is not correct. The issue is one of the rule of law, so no one in the RBF, even the legal member, should call meetings of appeals commissioners to discuss their judicial duties. Any domestic revenue commissioner, if dissatisfied, can appeal against the order of any appeals commissioner, as can taxpayers.
The root of the problem is the independence of the tax appeal system. By keeping the appeals of the Commissioner / Collector under the administrative control of the RBF, the government violates Article 189 of the Constitution as drafted by the Supreme Court in Shahid Pervaiz v. Ejaz Ahmad and others 2017 SCMR 206 [page 254, para 105] as below:
“Under Article 189 this Court is the court of last resort and the laws declared or the principles enunciated by it are binding on all the courts and subordinate authorities in Pakistan, as stated in Farhat Azeem v. Waheed Rasul (PLD 2000 SC 18). We have also held that the decisions of this Court establishing the proposition in law are binding laws on all, whether or not they were parties to the M / s Star Diamond Company v. Union of India (PTCL 1988 FC 229). We also felt that even a Supreme Court decision for which no grounds are given would be binding on the courts of the land Sardar Ali v. Conservator of Forests (1987 PLC (CS). ”
The non-application of the dictum set out in the Government of Balochistan v Azizullah Memon case according to which “the separation of the judiciary and the executive is the cornerstone of the independence of the judiciary” attracts contempt of court proceedings. It is a great tragedy that none of Pakistan’s governments, military or civilian, has ever followed the guidelines of the honorable Supreme Court quoted above. In the given Pakistani political environment, it is imperative that all judicial and quasi-judicial authorities working in the tax appeal system be regulated and supervised by the High Court under whose territorial jurisdiction they work. This is the only way to ensure the independence of the judiciary in its true substance and in accordance with constitutional requirements. [Article 203].
It is time for the Supreme Court to take tough steps to implement its order separating the judiciary from the executive. The application for suo muto action under section 184 (3) by the Federation of Chambers of Commerce and Industry of Pakistan for the implementation of the Government of Balochistan against Azizullah Memon PLD 1993 SC 31 is already pending before the august Supreme Court.
The All Pakistan Tax Bar Association is also expected to file a section 184 (3) petition. It is its duty as a supreme body to protect the constitutional rights of all citizens, especially law-abiding taxpayers who are needlessly harassed by tax officials for their own interests.
(Huzaima’s writers, lawyers and partners, Ikram & Ijaz, are adjunct professors at Lahore University of Management Sciences (LUMS), members of the advisory board and visiting principal researchers of the Pakistan Institute of Economics of development (PIDE))
Copyright Business Recorder, 2021