The Ministry of Finance through the Federal Board of Revenue (FBR) spends millions of rupees for improving tax recovery system and appoints commissioners, assistant commissioners and tax lawyers, but they do not defend its cases before the commissioners or tribunals which causes losses of millions of rupees to the national exchequer.
There is similar situation in the Appellate Tribunal of the Inland Revenue (ATIR) Karachi branch and despite a number of letters sent to the FBR chairman and the Finance Ministry by the tribunal, hundreds of government cases against tax evaders and companies are pending and waiting for the government’s representative, the FBR’s expert versions and point of view.
Similarly, most of the decisions of the Inland Revenue commissioner against the taxpayers are passed without following the rules of law. It means the CIR has passed several orders against the taxpayers without hearing them which is against the law.
A source in the tribunal said, “We have a number of cases pending in the tribunal but the FBR did not send their representatives to follow their cases and often tax evading companies win the cases because of the government’s inexperienced officials or DRs representing the FBR as they have no knowledge about the law nor do they follow it properly.”
The ATIR is a powerful tribunal set up by the federal government to resolve Income Tax, Federal Excise Duty (FED) and Withholding Tax disputes and the government has appointed Muhammad Jawed Zakaria as Judicial Member and Farzana Jabeen as Accountant Member.
“The non-serious attitude of the FBR and the Finance Ministry is causing delay in decisions and loss worth billions of rupees in revenue,” the source said. The government, through Large Tax-Payer Units (LTUs), challenged the decision of the Inland Revenue commissioner in the tribunal but they do not follow it properly due to incompetence and inexperienced representatives.
Through the letters sent to higher authorities of the FBR, the tribunal said, “Sometimes the department representatives do not attend the court’s proceedings to assist the court and put forth departmental view points. It is more disturbing when this happens in an appeal filed by the department. It is common in every case that the DRs appear before the court without a record of the case or sometimes they are busy in other courts and do not appear in other cases.”
The source said the despite the writing of the letters to the higher authorities, the government or the FBR department do not take effective measures and no serious attention has been given to the tribunals by the ranking authorities.
One of the judges of a tribunal said, “The DRs while appearing and addressing the courts do not maintain the necessary decorum and their conduct does not indicate the due respect for the court.”
This tribunal had suggested several times that a separate DRs legal wing should be created in the FBR and they should be trained according to international law and best practices so that they can fight the government’s cases properly.
In different judgments, the tribunal has asked to the FBR member (legal), member (Admin) and the chief CIR and other officials to take action and issue directions to all the CIRs (A) to issue notices to the DCIR in each and every case for obtaining comments or view points and taking strict disciplinary action against them. Despite all the letters and the warnings, the FBR authorities have not shown any indication that they intend to comply.