PM suspends taxman for negligence in court case

Prime Minister’s Office says Shehbaz takes notice of wilful delay

ISLAMABAD:

Prime Minister Shehbaz Sharif suspended a senior taxman on Tuesday on a complaint from judiciary of seeking an adjournment in a tax case, which showed his commitment to resolve the disputed tax matters but caused resentment in the tax machinery.

The prime minister suspended the senior officer in a court case where no revenue was involved. The matter pertained to a stay order taken by a company from the Islamabad High Court (IHC) in February last year against the Federal Board of Revenue’s (FBR) decision to open its books.

A notification issued by the FBR said that Yousif Hyder Shaikh (IRS/BS-21) presently posted as Chief Commissioner-IR, Large Taxpayers Office, Islamabad, had been placed under suspension, with immediate effect, for a period of 120 days.

It added that the action had been taken by the competent authority in exercise of powers under the Civil Servants Efficiency and Discipline Rules. In place of Shaikh, Ishtiaq Ahmed Khan is appointed as the new chief commissioner of the Large Tax Office.

In a press statement, the Prime Minister’s Office said that Shehbaz had taken notice of the wilful delay in tax cases and ordered for suspension of the chief commissioner, Inland Revenue, Islamabad, and other relevant officials. The prime minister also asked for initiating an inquiry.

However, a senior officer at the FBR headquarters said that the prime minister’s action was disproportionate, because the adjournment in the court case was sought by the lawyer despite the FBR’s chief commissioner instructions to pursue all pending court cases.

Moreover, the matter was related to a commissioner, Sajida Kausar, but the action had been taken against the chief commissioner without first ascertaining the facts. Kausar had recently been posted after she remained without a position for a longer period.

The company involved in the case was picked by the FBR last year for the sales tax and federal excise duty audit. However, the company filed a petition in the IHC and obtained stay order against the audit notice.

In March 2023, the company had sought an adjournment in the case and it was fixed for hearing only in February this year after a gap of almost one year. However, the case was again adjourned in February due to the “paucity of time by the court on that date”, according to a report of the FBR.

After the government’s decision to expedite the pending court cases, the FBR had asked its lawyers to seek expeditious fixing of cases, particularly where the high courts had granted stay orders to the taxpayers without first hearing the FBR.

The chief justice of Pakistan had also instructed the judiciary not to delay decisions in the tax cases. It is estimated that over Rs3 trillion is disputed and the cases are pending at four judicial forums, including the Supreme Court of Pakistan.

On April 1, the FBR instructed its lawyer in the case, Muhammad Bin Majid, to file a miscellaneous petition to get the stay order vacated in the light of the directions passed by the chief justice of Pakistan to expedite the resolution of disputed tax cases.

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The case was taken up by the court on April 17. However Bin Majid sought a short adjournment on the grounds that the court office had provided the relevant documents a week before the hearing.

“Learned counsel for the petitioner is ready to make his submissions. The Court is ready to hear the submissions. Respondents no.2 to 4 however are not ready, despite their complaint to the learned Attorney General’s office that the Government’s revenue is stuck due to pending litigation and the Attorney General writing to the Hon’ble Chief Justice to expedite the pending tax litigation,” according to the order issueds by Justice Ejaz Ishaq Khan.

“Let it be noted for the record that this petition was admitted on 03.02.2023 but over a year later learned counsel turns up for respondent’s no.2 to 4 stating that FBR has instructed him only recently and he needs time to prepare his brief,” according to the short court order.

During a recent interaction with the apex court judges, the prime minister had sought the Judiciary’s help for expeditious disposal of tax cases. The prime minister observed that the national exchequer had been suffering due to the pendency of such cases involving billions of rupees tax matters.

After the IHC issued the order about the FBR lawyer’s decision to seek adjournment, the FBR had sought an explanation from Bin Majid.

The lawyer explained that he appeared in the case for the first time and informed that court that he had only recently obtained the complete record of the case from the court office in the previous week and would require a short adjournment to render detailed assistance in the case, according to FBR documents.

In his explanation, the lawyer told the FBR field office that he obtained the complete record of the case from the court on April 12th. The lawyer handles over 100 cases of the FBR in various high courts. The FBR has withdrawn the power of attorney from Majid and appointed Osama Shahid as new lawyer on the case.