LAHORE:

The Lahore High Court (LHC) was informed on Monday that a hefty amount of Rs2 trillion was help up in litigation at the Appellate Tribunal Inland Revenue (ATIR) over the past several years.

The law ministry said in its reply to a petition against the Tax Laws (Amendment) Act that the cases were stuck for a variety of reasons, including arbitrary constitution of benches, inadequate number of benches, delay in fixation of cases and disposal of the appeals.

LHC Justice Jawad Hassan took up the petition in which certain modifications to the appellate procedure provided under the Income Tax Ordinance (ITO) had been challenged. The judge summoned the relevant Federal Board of Revenue (FBR) official on March 25 to explain the amendments.

During the proceedings, Justice Hassan noted that the ITO prescribed procedure of pecuniary jurisdiction in appeals. However, he added: “Through the impugned amendment one forum of appeal has been taken away.”

According to the judge, a significant number of cases filed in this court were instituted by the FBR primarily on the grounds of lack of reference to the relevant provisions of law, absence of a proper hearing, issuance of orders in a slipshod manner and failure to apply judicious mind.

Due to these deficiencies, this court was frequently compelled to remand cases back to the commissioners (appeals) for fresh adjudication in accordance with the law, Justice Hassan said. “This situation is consuming the valuable time of this court, leading to an increase in the backlog of tax references, thereby adversely affecting the hearing and disposal of other cases,” he added.

The judge mentioned that the FBR faced no financial barrier in filing tax references, because it was exempted from paying any court fees, whereas an ordinary litigant was required to pay Rs50,000 per reference.

“This results in a clear discrimination against the citizens of Pakistan, depriving them of equal access to justice, which will infringe the fundamental rights of the public guaranteed under Articles 4, 10-A and 37(d) of the Constitution,” Justice Hassan remarked.

Justice Hassan further remarked that the latest amendments to the ITO placed an extraordinary burden on this court, as currently, there was only one division bench for tax references at Bahawalpur, one at Multan, two at Rawalpindi, and three at the principal seat in Lahore.

“This court has repeatedly emphasised that the orders passed by the commissioners (appeals) are often sketchy, lacking reasoning and suffer from serious deficiencies, which ultimately result in litigation before this court,” Justice Hassan observed.

The defending, however, defended the amendment, saying that the impugned provisions had been inserted to discourage unnecessary or frivolous appeals, which would help streamline the process and reduce burden