FBR Weighs Up Option to Seal Bank Accounts of Taxpayers for Recovery Purposes

The Federal Board of Revenue (FBR) has directed the Inland Revenue (IR)-Operations Wing to chalk out the policy and legal position for taking extreme coercive measures of sealing of bank accounts of taxpayers for recovery purposes.

The FBR will submit its enforcement policy before the Lahore High Court (LHC) by November 8, 2023.

According to the FBR’s instructions to the Member IR (Operations), kindly refer to the subject noted above and find herewith Lahore High Court’s order dated October 18, 2023, in W.P.No.6833612023. The case has been re-listed for November 8, 2023.

Meanwhile, the FBR shall submit a report within 15 days on the policy and legal position, in his opinion, on recovering the amount by taking ultimate coercive measures of sealing bank accounts and recovering amounts therefrom.

The Attorney General for Pakistan shall also assist the court on the legal proposition. If in FBR’s opinion, the impugned action is not in accordance with law and economic policy, then the court should be assisted whether any disciplinary action is taken against the officers who are using such coercive measures which apparently are detrimental to the economic activities of this country.

In the LHC, the counsel for the respondents (tax department) has apprised that the accounts of the petitioner have been de-sealed. It is admitted position that the impugned action of recovery under section 140 of the Income Tax Ordinance, 2001 has been taken within the available limitation to file an appeal. However, learned counsel for the respondents (Inland Revenue officers) submitted that sufficient time to approach the Appellate Tribunal Inland Revenue (Appellate Tribunal) was given. It is also apprised that the petitioner has approached the Appellate Tribunal where interim relief has been granted.

Learned counsel for the respondents, representing the officer who made recovery, submits that there is no express prohibition in law for the recovery.

Conversely, learned counsel fixed the petitioner (steel re-rolling mill) and submitted that the time was not sufficient from the date of service. The grant of interim relief by the Appellate Tribunal itself shows that the petitioner had a good prima facie case. Therefore, the amount recovered is liable to be returned.

The counsel for the respondents confronted that there is no direct judgment on the point of whether impugned recovery cannot be affected during the period available for appeal.

For the determination of the above-noted legal question, learned counsel for the respondents requested some time to further prepare and argue.

Meanwhile, Chairman FBR shall submit a report within fifteen days with his signatures on the policy and legal position, in his opinion, on recovering the amount by taking ultimate coercive measures of sealing accounts and recovering amounts therefrom, LHC order added.

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