ISLAMABAD: The Islamabad High Court (IHC) has slapped a Rs100,000 fine on Commissioner Inland Revenue, Islamabad while dismissing department income tax reference, which has been termed as harassment, abuse of authority, and frivolous litigation against a UAE-based company working in Pakistan.
The IHC came down hard on the Islamabad Tax Office for filing frivolous, repetitive and baseless appeals, declaring the conduct a mockery of law and a naked attempt to strangle lawful tax refunds through manufactured litigation.
Calling the case a textbook example of “fraud on the statute”, Waheed Shahzad Butt, the counsel for the foreign company, informed that this is not incompetence this is deliberate fraud and institutional mala fide.
READ MORE: IHC findings: LTBA-PILC demands removal of IR Commissioner
The tax office knowingly filed dead appeals only to block refunds.
It is a scam run under the cover of law, driven by extraneous motives.”
Waheed Butt further warned that such actions are economic sabotage, when foreign investors are dragged into futile court battles despite clear law it sends a dangerous message to the World that Pakistan’s tax machinery is hostile, arbitrary, and lawless.
IHC order has exposed how tax officers misuse courts as a tool of harassment, drain public resources, and harass compliant taxpayers.
The foreign company believes that the ruling has ripped the mask off a systemic practice where lawful refunds are held hostage, files are weaponized, and justice is delayed by design. The judgment reinforces a powerful message. Courts will no longer tolerate tax officers playing judge, executioner, and extortionist, all at once: Waheed added.
IHC order states “In this out rightly frivolous and tax reference application, the inaptitude of the department has been purported to be masked under numerous questions of law. The reference is palpably an attempt to prevent the inquiry directed by the Tribunal into conduct that bordered on negligence, if not misuse of power.
We cannot ignore the possibility that the motivation for filing this reference application was to stall that inquiry. We fail to see what question of law arises for us to answer.
This reference is plainly frivolous and motivated to curb the inquiry ordered by the Tribunal and an abuse of the process of this court, IHC ordered.
Copyright Business Recorder, 2026
Comments