SC rejects FBR’s appeals, upholds Tribunal’s decision granting HQ allowance to time-scale employees
ISLAMABAD: The Supreme Court has dismissed the Federal Board of Revenue (FBR) petitions challenging the grant of FBR Headquarters Allowance to its employees on the basis of the time scale of BS-17.
A three-member bench, headed by Chief Justice of Pakistan Yahya Afridi, on Tuesday heard petitions filed by 40 employees seeking the FBR Headquarters Allowance on the basis of time-scale promotion. The bench upheld the verdict of the Federal Service Tribunal.
The Tribunal, on 26-02-26, through a consolidated judgment, set aside the impugned U.O/clarification dated 17.11.2023 of the Finance Division regarding grant of FBR HQs Allowance, 2023 being in deviation from the Prime Minister’s office letter dated 11.10.2023.
It declared that the respondents (FBR employees) are eligible for the grant of the FBR-HQ Allowance as sanctioned for BS-17 to BS-22 officers posted in the FBR-HQ, Islamabad, on the basis that they have been awarded time scale BS-17 which entitles them for the grant of pay and allowances of BS-17 despite that he being an officer of BS-16 and despite the said allowance extended only to the regular officers of BS-17 and above stationed in the FBR HQs.
During the proceedings, Afnan Karim Kundi, representing the FBR, argued that the consolidated judgment dated 26.02.2026 passed by the Federal Service Tribunal, Islamabad, does not align with the law applicable to the case and the facts discernible from the record.
He contended that the Tribunal erred in law by holding that the Finance Division “has deviated from the summary approved by the Prime Minister by inserting paragraph “D” on its own initiative”.
Speaking during the hearing, counsel for the FBR said that executive allowance was given to the Board employees. “Headquarters allowance cannot be given to time scale employees,” he added.
The Chief Justice questioned whether the Prime Minister had given approval for the timescale allowance. Justice Miangul Hassan Aurangzeb, a member of the bench, asked the counsel to produce the allowance’s summary so that the bench could get to the truth. The counsel then provided a copy of the summary.
FBR’s lawyer said that the allowance was meant for grade-17 employees, while the petitioners in the case were not grade-17 officers.
The chief justice replied that there was nothing in the summary that could support the lawyer’s assertion. The grant of time-scale to BPS-01 to BPS-16 officers was formulated vide O.M. F.No.9(7)R-1/2014-233/2022 dated 28.05.2022 pursuant to Government’s Policy for Grant of Time-Scale to Civil Servants of BPS-1 to BPS-16.
CJP Afridi then asked the FBR counsel to contact the relevant authority if the department wanted to separate the time-scale employees from the rest.
Kundi stated that the Tribunal was not authorised to hear the case under review. He requested the Court to issue a notice to the Finance Division. However, the bench did not entertain his request.
The FBR petition raised questions: “whether a civil servant posted at FBR Headquarters, Islamabad holding substantive/presumptive payscale of BPS-16 who is only granted higher “timescale” of BS-17 would be entitled to the payment of FBR HQ Allowance at 140 percent of Basic Pay which is specifically and exclusively admissible to the “officers of BS-17 and above” at FBR Headquarters, Islamabad as per the Finance Division’s U.O. No. F.14(1)R-3/2012-478, dated 17.11.2023, read with the Prime Minister’s approval contained in letter dated 11.10.2023?
“Whether the phrase “officers of BS-17 and above” employed in the Prime Minister’s approval of FBR HQ Allowance contained in letter dated 11.10.2023 includes someone whose substantive pay-scale is BS-16 but has only been granted higher timescale of BS-17 under the Time Scale Policy?
“Whether the Tribunal erred in declaring the requirement of “substantive payscale” contained in Finance Division’s U.O. No. F.14(1)R-3/2012-478, dated 17.11.2023, as without lawful authority, being in excess of the Prime Minister’s approval conveyed vide letter dated 11.10.2023?
“Whether the Finance Division’s U.O. No. F.14(1)R-3/2012-478, dated 17.11.2023 has rightly interpreted the Prime Minister’s approval contained in letter dated 11.10.2023 to be confined to officers holding “substantive payscale” of BS-17 and above, since grant of timescale of BS-17 does not make the incumbent of a BS-16 post an “officer of BS-17” as envisaged in the Prime Minister’s approval?”
Copyright Business Recorder, 2026