‘Peer ranking system’: FBR yet to file comments before LHC in response to plea

ISLAMABAD: The Federal Board of Revenue (FBR) has failed to file its written comments before the Lahore High Court (LHC) in a high-profile constitutional petition challenging the legality of its reward distribution scheme commonly described as the peer ranking system.

The petition, filed by tax lawyer Waheed Shahzad Butt, raises grave constitutional and legal concerns regarding the alleged distribution of public money without lawful authority, transparent criteria, or adequate parliamentary oversight.

Earlier, LHC had earlier issued notices to an extensive array of respondents, including the Principal Secretary to the Prime Minister, Chairman FBR, Members of the FBR Policy Board, Federal Ministers, Heads of Parliamentary Finance Committees, Auditor General of Pakistan, and the DG FIA). All respondents were directed to submit written replies addressing the serious allegations levelled in the petition. FBR’s continued silence in the face of this judicial directive raises troubling questions about institutional accountability.

The constitutional petition calls into question the FBR’s peer ranking reward scheme, under which monetary rewards are reportedly disbursed among tax officials based on a ranking mechanism determined by their peers.

The petitioner contends that such disbursements drawn from the public exchequer lack the statutory basis, transparent criteria, and lawful authority required under the Constitution of Pakistan and applicable fiscal statutes. The petition further argues that the scheme operates outside the purview of approved parliamentary appropriations and structured accountability mechanisms.

This legal challenge emerges against a broader backdrop of governance concerns within the FBR. Analysts and legal commentators have repeatedly flagged that senior appointments in the revenue authority have been made through Section 10 of the Civil Servants Act, 1973, a general transfer provision rather than through the merit-based, institutionalised process prescribed under Section 3 of the FBR Act, 2007. Critics argue that this practice not only undermines institutional integrity but also shields appointments from structured Parliamentary and judicial scrutiny.

The constitutional dimension of this petition is particularly significant in light of the Supreme Court’s binding ruling in PLD 2016 SC 808, which held that executive authority over fiscal matters and senior bureaucratic appointments must be exercised collectively by the Cabinet rather than through unilateral administrative fiat.

The outcome of this petition is being closely watched by legal practitioners, civil society, and fiscal accountability watchdogs. Observers note that if the Court finds the reward scheme to be constitutionally infirm, it would have far-reaching implications for how the FBR structures its internal incentive mechanisms and disburses public funds. The involvement of the Auditor General and DG-FIA as formal respondents further underscores the multi-institutional dimension of the accountability questions at stake.

The petition, filed by Advocate Waheed Shahzad through senior lawyer Muhammad Azhar Siddique, invokes Article 199 and challenges the legality, transparency, and constitutional validity of IR Reward Rules and the Customs Reward Rules and contends that these rules have allegedly facilitated an “unbridled and unconstitutional distribution of millions from the public exchequer” in the form of rewards to senior FBR officers.

Copyright Business Recorder, 2026