Over Rs 1 trillion stuck in tax-related litigations

A huge amount of Rs 1,142 billion is stuck in tax-related litigations between the Federal Board of Revenue (FBR) and courts/appellate forums. Sources told Business Recorder Tuesday that a substantial amount of revenue has been stuck in litigations between FBR and courts including Supreme Court of Pakistan, High Courts, Appellate Tribunal Inland Revenue, Customs Tribunals and Commissioners Inland Revenue Appeals.

According to the sources, an amount of Rs 60 billion has been stuck in the litigation at Supreme Court of Pakistan. The tax-related cases involving revenue of Rs 387 billion have to be decided at the level of high courts.

An amount of Rs 458 billion is stuck in cases pending with the Appellate Tribunal Inland Revenue, sources maintained.

Commissioners Inland Revenue Appeals have to decide cases involving revenue of Rs 237 billion, sources added.

The data revealed that the highest amount of tax is stuck up at the level of Appellate Tribunal Inland Revenue.

When contacted, a tax expert suggested that the FBR should work out an effective strategy for early disposal of cases, where courts have granted stay over six months, by invoking the Article 186 of the Constitution and applying for early fixation of cases in higher courts.

Under the Article 186 (Advisory Jurisdiction) of the Constitution, if, at any time, the President considers that it is desirable to obtain the opinion of the Supreme Court on any question of law which he considers of public importance, he may refer the question to the Supreme Court for consideration. The Supreme Court shall consider a question so referred and report its opinion on the question to the President.

The introduction of proper mechanism for monitoring of cases attracting section 124A through inclusion is IRIS module/maintenance of manual registers was of immense importance, the tax expert suggested.

The FBR is facing challenges in this respect including high volume of litigation, sub-optimal quality of departmental orders, weak representation in courts and lack of coordination among field formations and lawyers. Some initiatives in this respect encompassed increase in fee structure for panel advocates, establishment of litigation coordination cells, appointment of coordinators, delisting of advocates based on performance and preparation of case folders for potential revenue cases. Other proposals included implementation of tracking and monitoring software, strengthening officers of DG Law and Director Law, development of an in-house legal team, delineation of minimum criteria for appointment of panel advocates, establishment of a litigation research cell within the FBR and introduction of monitoring pro forma for panel advocates. The FBR has decided that priority should be accorded by the Member (Legal) to major issues acting as an impediment to effective management of litigation cases.