LAHORE: The Lahore High Court (LHC) termed the action of a taxation officer against an active taxpayer without following a due procedure a robbery and directed the Federal Board of Revenue (FBR) to issue a notification to all the taxation officers warning them of disciplinary proceedings over the abuse of power and infringing fundamental rights.
The court held that till the time it is incorporated in the rules, the commissioner should not invoke the provisions of section 140 without seeking prior approval from FBR.
The court passed this order on a petition of Sardar Waseem Ilyas, who approached the court against withdrawal of an amount by FBR invoking Section 140 of the Income Tax Ordinance, 2001, from his account.
The court said that every notice should have the necessary information of the proceedings and material, based on which the coercive measure for recovery of demand is to be taken. The court said the provisions of section 140 should be invoked when the commissioner believes that the taxpayer may run away with the demand which will become irrecoverable forever.
The court said recovery under section 140, without complying with the command of Articles 10A and 19A of the Constitution and that too by ignoring the statutory procedure and law laid down in binding judgments, is misconduct, proceedable under the service laws.
The court observed the protection under Section 227 of the Ordinance of 2001 is only for actions in good faith and FBR under its subsection (2) can always recommend disciplinary proceedings for infringing fundamental rights or for non-compliance of judgments by superior courts, the court added.
The court said the taxation officers were reprimanded in some cases for such reckless recovery but the pursuit to achieve the targets is the apparent reason for non-compliance.
The court said in this case also, notice under section 140 of the Ordinance of 2001, does not disclose any detail of creating or shifting the demand enforceable against the petitioner. The court was also not satisfied with the explanation submitted by the Commissioner Inland Revenue and held this court is not convinced with the explanation.
The court observed that forceful withdrawal of an amount from personal and business accounts, in the absence of due process, is an infringement of fundamental rights under Article 23 of the Constitution, besides negatively impacting the taxpayer’s business and business activities in general.
Copyright Business Recorder, 2024
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