ISLAMABAD: Islamabad High Court (IHC) has restrained the Federal Tax Ombudsman (FTO) from taking action against a banking company till the next date of hearing, i.e., October 19, 2023.

The IHC, while hearing a constitutional petition, has suspended the order passed by the FTO and stopped the FTO to act on his order under challenge before the IHC allegedly issued in breach of Section 23 of the FTO Ordinance, 2000.

The counsel for the petitioner states that the petitioner is a banking company and the FTO has no jurisdiction to inquire into the affairs of the petitioner.

Unlawful tax recovery: FTO summons FBR officials

IHC order stated that the petitioner is aggrieved by order passed by the FTO. The learned counsel for the petitioner states that the FTO has no jurisdiction to inquire into the affairs of the petitioner.

He further states that the petitioner had provided certain information sought by the FTO in a complaint filed by citizens against the Revenue Division and based on such statement the FTO has ordered an inquiry into the affairs of the petitioner, which is beyond its jurisdiction and such instruction is also in breach of Section 23.

When contacted, a lawyer informed that barring provisions contained in Article 29 of FTO Ordinance, would apply, where FTO’s order was within the four corners of law defining his jurisdiction.

Where there was any lack of jurisdiction, provisions contained in Article 199 of the Constitution would be attracted. Where the Ombudsman travels beyond powers vested in him under the law, then his orders would be open to challenge before the High Court. Performance of quasi-judicial functions by itself does not convert an Authority/ Ombudsman into Court.

In order to constitute a Court in stricto senso, it should have power to give a decision or a definite judgment, which has finality and authoritativeness. Article 29 is a sub-constitutional legislation and cannot control or regulate the powers of the constitutional court under the Constitution.

Reliance may be placed on a full bench judgment in Arshad Mehmood v. Commissioner (2014 PLD 21), which has been upheld by the Supreme Court; therefore, any reliance on Section 18 of Reforms Act or Article 29 is misconceived.

The episode, prima facie, attracts Section 5 of the Reforms Act, 2013 which provides for removal of Ombudsman.

Earlier Lahore High Court has referred the case of an Ombudsman before the Supreme Judicial Council, for removal in terms of Section 5 of the Act, 2013 in Salim Javed Baig vs. Federal Ombudsman, etc.

Let notices be issued to the respondents for October 19, 2023, who will file report and para-wise comments within a period of ten days. Meanwhile, the respondents will not act on the impugned order till the next date of hearing: IHC order added.

Copyright Business Recorder, 2023


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Obaid Oct 10, 2023 10:10pm
Good decision, it was a common feeling that FTO is over stretching it's boundaries.
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