2025 PLP 860 (PTD)

JAWAD HASSAN, J.

Pursuant to the order dated 03.09.2024, this Court, while issuing notices to the Respondents, including the Attorney General for Pakistan, directed them to file their reports and parawise comments in response to the legal questions raised in this Petition. On the said date, it was noted by this Court that through this Petition the amendment brought in the Income Tax Ordinance, 2001 (the "Ordinance") through the Tax Laws (Amendment) Act, 2024 (the "Act"), wherein certain modifications have been made to the appellate procedure provided under the Ordinance, has been challenged. It was also noted that the Ordinance prescribes the procedure of pecuniary jurisdiction in Appeals; firstly, before the Commissioner (Appeals), then before the Appellate Tribunal and thereafter a remedy can be availed before this Court in terms of Section 133 of the Ordinance by filing a Tax Reference. However, through the impugned amendment one forum of appeal has been taken away.

2. It is astonishing that the Respondent No.2/Ministry of Law and Justice in its reply mentioned that "over the years, and for various reasons, including arbitrary constitution of benches, inadequate number of benches, delay in fixation of cases and dispose of appeals, a substantial amount of revenue, to the tune of Rs.2 trillion, is held up in litigation before the ATIR. The object of reducing the number of appeals is to simplify and expedite the appeal process, reducing administrative burdens and it will also lead to significant cost saving. The impugned provisions have been inserted with aim to discourage unnecessary or frivolous appeal, which will help streamline the process and reduce burden."

3. It is pertinent to mention here that in the cases of Chenab Flour and General Mills and others v. Federation of Pakistan through Secretary Revenue Division and others (PLD 2021 Lahore 343) and Ramzan Sugar Mills Limited v. Federal Board of Revenue and others (2021 PTD 1321) this Court has already declared the Federal Board of Revenue (the "FBR") as a Regulatory Body to deal with all the tax related affairs by holding that "the FBR is Regulator of all fiscal laws in the country and being a Regulator, it vests with the main goal of tax collection in the country". But now the impugned amendment has placed an extraordinary burden on this Court, as currently, there is only one Division Bench for Tax References at Bahawalpur, one at Multan, two at Rawalpindi, and three at the Principal Seat. This Court has repeatedly emphasized 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. A significant number of cases are filed before this Court are instituted by the FBR primarily on the grounds of: (i) lack of reference to the relevant provisions of law, (ii) absence of a proper hearing, (iii) issuance of orders in a slipshod manner, and (iv) failure to apply judicious mind. Due to these deficiencies, this Court is frequently compelled to remand cases back to the Commissioners (Appeals) for fresh adjudication in accordance with the law. 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. Moreover, it is pertinent to highlight that FBR faces no financial barrier in filing Tax References, as it is exempt from paying court fees, whereas an ordinary litigant is required to pay Rs. 50,000 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 public guaranteed under Articles 4, 10-A and 37(d) of the Constitution.

4. It is also important to mention here that in the judgment reported as Shaheen Merchant v. Federation of Pakistan/National Tariff Commission and others (2021 PTD 2126) this Court has discussed in detail the role of an Appellate Tribunal established under a specific law and/or an adjudicating forum created with the mandate to decide the appeal/matter within a specific timeframe. In the said case, this Court has also elaborated the scope of Article 37(d) of the Constitution, which states in equivocal terms that it is the utmost duty of the State to ensure inexpensive and expeditious justice while the impugned amendment of taking away jurisdiction of one appellate forum hits the mandate of this Article.

5. In order to strengthen the appointment of (Muhammad Akram) Member Judicial, Appellate Tribunal Inland Revenue ("ATIR") this Court has already passed the judgment reported as Rizwan Ali Sayal v. Federation of Pakistan and others (PLD 2024 Lahore 54 = 2024 PTD 32 (Rawalpindi Bench).

6. The foregoing circumstances unequivocally demonstrate that the amendment in question is clogging the arteries of judicial system, obstructing the dispensation of justice and causing undue delays in other cases. Therefore, this Court intends to decide this case like the judgment reported as "Service Global Footwear Limited and another v. Federation of Pakistan and others" (PLD 2023 Lahore 471) because Doctrine of Textualism envisages a method of statutory interpretation that a statute should be interpreted according to its plain meaning and not according to the intent of the legislature, the statutory purpose or the legislative history.

7. In view of above, before passing any further orders, Dr. Ishtiaq A. Khan, Director General, FBR, is directed to appear before this Court with a detailed reply explaining the background, rationale, policy, objectives and reasons for introducing such amendment. He shall also clarify how this amendment is causing delay in the administration of justice by this Court, affecting the rights of the public.

8. Re-list on 25.03.2025. MQ/M-48/L Petition re-listed.