Rs3.2trn cases stuck in courts: ‘Loopholes’ mar FBR’s legal operation: AGP

ISLAMABAD: The Attorney General of Pakistan (AGP) has detected serious loopholes in the legal working of the Federal Board of Revenue (FBR) while handling disputed tax matters and cases pending in courts to the tune of Rs3.2 trillion. The Attorney General of Pakistan office has pinpointed difficulties in the FBR working creating hurdles in efforts of disposing of cases in higher courts. The office has also raised serious concerns over the FBR’s system of pursuing cases in courts and also conveyed the relevant report of the Additional Attorney General, Karachi to the FBR.

According to a communication of AGP to the chairman FBR, in bunch of cases where identical petitions are filed by different parties, the field formations/departments engage different counsels and having absolutely no coordination with each other.

This situation leads to complete chaos and as a result, matters keep on lingering and adjourning cases for one reason or the other for no fault of the bench. In addition, such a situation not just annoys the bench at the time of hearing but it also burdens the exchequer with an additional fee for different counsels so engaged separately in each identical case.

It is therefore suggested that the FBR may accordingly be advised to engage one senior/competent counsel in similar/connected matters and comments filed only in lead petition to be adopted in all other similar/connected petitions, as only legal points to be adjudicated so that these are decided expeditiously, Attorney General’s office said.

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There are frequent petitions being filed, where matter pertains to two or more ministries, ie, there are some cases where matter relates to ministries of Finance/Revenue, Commerce and Industries and in such cases propriety demands that there is no conflicting stance in the comments filed by each ministry.

However, the Attorney General office has come across a number of petitions where there are conflicting comments filed by two or more ministries and such situation not only just often annoys the bench but it also creates difficulties for this office while rendering the assistance to the bench. One of such bunch was fixed in CP No 6267/2019 and other connected matters (involving revenue of over a billion rupees), wherein conflicting comments have been filed by the Ministry of Industries and Production through EDB and by the Revenue Division through its filed formation. Resultantly bench was annoyed and directed this office to seek appropriate instructions from both the ministries to this effect.

It is advised that in these types of petitions, where two or more ministries/divisions are involved actively, comments may be filed through the AG office only, so that if there is any conflict in their comments, it is resolved and comments of both are amended and aligned accordingly before these are filed in court.

It is therefore requested that FBR may accordingly be advised to direct all panel counsels to provide a copy of comments to the AG office in each and every case, prior to filing the same in court so that this office is able to assist the court effectively and cases shall be decided expeditiously.

It has been observed that there are a number of cases, being filed regularly (i.e. cases against recovery pending appeal), where there is no need for an engagement of formal counsel and to spend hefty amounts on account of professional fees paid to the panel advocate so engaged, rather such matters can easily be disposed of with the assistance of the Attorney General Office/department’s representative, stated the Attorney General’s office.

In these matters, it is suggested that departments/field formations may be directed to designate their duly instructed representative to coordinate with MAG/DAG present in Court and provide assistance to him and who in turn can very easily get such matters disposed of accordingly. So that the national exchequer could be saved.

The Attorney General’s office further stated that the FBR invariably file their comments directly in the court, without providing a copy to the office of the Attorney General and in such a situation, the AAG/DAG present in the matter becomes absolutely clueless and unable even to assist the court, especially on factual issues. It is therefore requested that FBR may accordingly be advised to direct all panel counsels to provide a copy of comments to the AG office in each and every case, prior to filing the same in court so that the office is able to assist the court effectively and cases be decided expeditiously.

It is advised that in these type of petitions where two or more ministries/divisions are involved actively, comments may be filed through the AG office only so that if there is any conflict in their comments, it is resolved and comments of both are amended and aligned accordingly before these are filed in court.

In a number of cases, despite of having been served with notices, none appears for the FBR/field formations and as a result not only the bench is annoyed but as a result final disposal of matters is also delayed. Even in some cases (where despite service none appears to assist the court) stay orders are also passed. Even on 24.04.2024 in cases listed at serial 23 (ITRA No. 99/24) and at serial18 & 19 (SCRA 1619/2023 & other connected matters) of the main list, before the bench specifically constituted for fiscal matters despite the service of notice, none appeared for the department and the learned bench.

In this regard, it is suggested that FBR may be advised to direct all its filed formations/departments to depute officers of not less than the rank of BS-18 officer, to be present in court on regular basis and in a way their presence would not only ensure timely response to the cases filed, but would also save revenue because with the assistance of such officer most of the petitions would not even require engagement of formal panel counsels and rather can get those cases easily disposed of through AAG/DAG presenting Court.

The Attorney General office also shared its observation with regards to the matters decided under hierarchy especially in matters under Customs Act, 1959.These matters are being mishandled/mismanaged and thereby causing huge revenue losses to the exchequer merely on some technicalities. It has been observed that when matter proceeded under hierarchy is decided against the revenue especially at the level of Appellate Tribunal, the department act loosely and mostly causes delay in filing of the Reference Application(s) and even when these are filed, yet no efforts are made to move urgency for months and obtain stay against the order passed by Tribunal. Such situation is often exploited by the importer/taxpayer who, rather act promptly and file their petition before High Court for compliance of order of the Tribunal and thereby courts are left with no option but to direct for compliance of the orders passed by Tribunal in accordance with law.

It is advised that in order to pre-empt such compliance petitions, the field formations/departments may be directed to file SCRAS forthwith (without waiting for the final day) and therewith also move urgent and stay applications, seeking suspension of the impugned orders passed Tribunal, it added.

Copyright Business Recorder, 2024