FBR Working to Reduce Rs. 2.3 Trillion Tax Claims Stuck in Litigations

In order to reduce the Rs. 2.3 trillion tax revenue claims stuck in litigations in superior courts, the Federal Board of Revenue (FBR) has decided to approach trade bodies, including chambers of commerce all across the country to utilize the Alternate Dispute Resolution (ADR) option to the optimum level.

According to a document of the FBR to end litigation of Rs. 2.3 trillion in courts, the Customs Wing of FBR is putting special emphasis on availing the Alternate Dispute Resolution (ADR) mechanism under Section 195C of the Customs Act, 1969, for quick and amicable disposable of pending litigation cases.

In this regard, the field formations have been directed to identify cases that are suitable for disposal through ADRCs. The Customs Wing is in the process of reaching out to trade bodies, including chambers of commerce all across the country to utilize the ADRC option to the optimum level. The Customs Operation wing has already set up ADRCs in five cases, with three more in the pipeline and efforts are being made to maximize the use of this mechanism for quick and early disposal of pending litigation cases.

In order to discourage frivolous litigation all Chief Collectors/ Director Generals have been asked to forward the recommendation for filing of Appeals/SCRAs after satisfying themselves with the legality/propriety involved in the questions of law being framed to the Board.

In order to discourage the filing of Appeals/ References on frivolous grounds, the field formations have been directed that only sound and specific questions of law, if they so exist, should be raised rather than general questions of law/grounds for filing appeals/references.

FBR Chairman along with Member (Legal-IR) held back-to-back meetings with Chief Justice Lahore High Court and then with Chief Justice Islamabad High Court recently. They were apprised of the efforts that FBR is making to liquidate its pendency and both Chief Justices were requested for their kind support.

After the meetings, FBR has appointed CCIR, LTO Lahore as focal person for all cases that relate to Lahore field formations and also of cities around Lahore like Multan, Faisalabad, Sialkot, Gujranwala. Similarly, CCIR, LTO Islamabad has been appointed as the focal person to liaise and coordinate with the Islamabad High Court and relevant field formations which are in Islamabad and Rawalpindi. Both focal persons have been strictly advised to focus on priority cases and at the same time ensure that courts are properly briefed and assisted. In addition, they have to ensure that frivolous litigation should not take place.

Member (Legal-IR) also had productive interaction with the Supreme Court of Pakistan Registrar and Secretary Ministry of Law & Justice. The registrar was requested for early fixation of revenue cases involving substantial revenue and where a stay has been granted by the Supreme Court of Pakistan and High Courts. Standing instructions have already been issued to the relevant Field Formations to file applications for early fixation of cases pending before various courts. Similarly, Secretary Law & Justice was requested to provide FBR lists of pendency that exist at the Appellate Tribunal Fora. The moment this list is received it will be shared with all field formations urging them to apply for an early hearing of these cases at the Appellate Fora.

The Supreme Court of Pakistan has also prioritized the disposal of revenue cases by constituting three benches where revenue cases are fixed on a daily basis. Multiple benches have also been hearing tax litigation cases in the Sindh High Court, Lahore High Court and Islamabad High Court for the disposal of revenue cases on a priority basis.

In order to ensure better coordination with the respective registrar offices of the Supreme Court of Pakistan and High Courts, in facilitating early fixation of cases and provision of proper assistance to the courts, ten regional committees across Pakistan have already been notified and are steadfastly working.

The FBR said that the pending cases are disposed of by the courts on a daily basis which are replaced by fresh appeals filed by both the department and taxpayers in accordance with the prescribed legal requirements. However, the department and the courts have been making concerted efforts to ensure early disposal of pending cases as evident by the number of cases disposed of by various courts during 2022.

As per FBR’s standing instructions, a well-versed officer from the relevant field formation along with the legal counsel attends the proceedings before the relevant court to ensure the provision of assistance to the courts as well as to ensure representation from the department on the due date. An officer from the FBR also attends the proceedings at the principal seat of the Supreme Court of Pakistan to monitor the performance of the legal counsels and the departmental representatives.

The FBR’s Legal Wing-Customs has directed all the field formations to refrain from frivolous litigation and before filing a reference before the High Courts and Supreme Court of Pakistan, an in-depth analysis of the cases be carried out and only potential cases, where strong grounds of appeal exist are put to further litigation at such higher legal fora.

The FBR’s Legal Wing-Customs had sought reports from all field formations of Pakistan Customs regarding cases pending with the Supreme Court wherein the department has lost its case at three fora below so that such cases may be reviewed in consultation with the concerned field formations and counsels of the department.

The Legal Wing-Customs has actively contributed to the development and rolling-out of the IRIS-LMS (Litigation Management System) for streamlining/automation of FBR’s litigation processes and data management, which is now ready for countrywide rollout in Customs’ and IRS’ formations.

The IRIS-LMS will not only expedite the litigation process but will be able to generate reports for assessing the progress in cases on real-time basis The system will also enable the senior management of FBR to directly monitor progress in significant cases, involving policy issues or substantial revenue.

In order to keep monitoring pending cases in different fora for early disposal all field formations have been directed to furnish daily progress reports of cases fixed for hearing in the Supreme Court and High Courts. All field formations have been directed not to seek adjournment in matters fixed for hearing and to brief the respective counsels in anticipation. The Chief Collectors of Customs are required to furnish case wise certificate in this regard, certifying that the counsel has been briefed and no adjournment would be sought, to avoid unnecessary delays.

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