ISLAMABAD: The Corporate Tax Office (CTO) Islamabad has refused to follow an unchallenged order of Federal Tax Ombudsman (FTO) Zafar-ul-Haq Hijazi, undermining Pakistan’s Alternative Dispute Resolution Committee (ADRC) framework, violating government’s commitment of out-of-court tax dispute resolution.
The disputed tax demand which the ADRC process was designed to resolve has been covertly recovered through the deliberate denial of lawful refunds owed to the aggrieved taxpayer, exposing a deeply entrenched culture of impunity within FBR’s field formations.
The FTO exists to shield taxpayers from precisely this kind of administrative excess.
According to the allegations of the taxpayer, the CTO, Refund officer has allegedly adjusted lawful income tax refunds covering Tax Years 2018 through 2021 against a sales tax demand that is disputed, legally unenforceable, and actively pending resolution before an ADRC forum through an order passed by FTO Zafar Hijazi. This single act of institutional recklessness has simultaneously violated four binding legal obligations, a Supreme Court judgment, an Islamabad High Court ruling, an FBR’s own policy Circular, and a direct order of the FTO. When contacted the Director of the company Shehryar Ansari said that this is not bureaucratic negligence, but a deliberate move.
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The FTO passed a binding, enforceable orders separately under income tax and sales tax regime but CTO ignored all contemptuously, and without explanation. The Supreme Court in 2025 SCP 267 categorically prohibits FBR officers from arbitrarily recovering without due legal process. CTO orders stand in open defiance of that constitutional mandate. A demand pending before an ADRC is legally unenforceable during those proceedings. Adjusting a refund against such a demand is void ab initio a legal nullity. CTO did it anyway.
He accused that the case is bigger than one company’s refund.
It is a direct violation of two of Pakistan’s most critical tax reform pillars. PM Shehbaz Sharif’s ADRC mechanism rests on one non-negotiable premise that when a dispute enters the ADRC forum, coercive State action stops. The moment FBR’s own officers adjust refunds against demands pending before ADRC, they give a negative message to every taxpayer in Pakistan.
Every investor, every business, every taxpayer watching this case now knows that ADRC protection means nothing if a Refund Zone officer can simply override it with a Section 170(4) order, Ansari added.
The Chairman FBR, Member IR-Legal, and Member IR-Operations have all been formally requested in the said case. The question arises how many more taxpayers without Supreme Court representation have silently absorbed this same institutional violence, Shehryar added.
Copyright Business Recorder, 2026
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