IHC lifts stay order in ZTBL tax case

Clears way for FBR to recover billions of rupees from bank

ISLAMABAD:

The Islamabad High Court (IHC) has vacated its stay order in a case involving the Zarai Taraqiati Bank Limited (ZTBL), paving the way for the Federal Board of Revenue (FBR) to recover billions of rupees in taxes.

The court on Saturday set aside the stay that an IHC single bench had granted against FBR's tax recovery notice issued on March 12, 2026, observing that such petitions have become ineffective following the enforcement of the Tax Amendment Act 2026.

A division bench comprising Justice Arbab Muhammad Tahir and Justice Khadim Hussain Soomro ruled that the writ petition filed by ZTBL stands disposed of in accordance with the law.

The court held that with the promulgation of the new law, all petitions of a similar nature are automatically terminated, leaving no room for further proceedings.

In its judgment, the court noted that the amended law contains clear provisions, under which no further hearing can be conducted in such matters. Consequently, the stay order issued on March 17, 2026, on the bank's request has also been withdrawn.

ZTBL had approached the high court after the promulgation of the Tax Amendment Act 2026, challenging the FBR's recovery notice and seeking interim relief. The court had earlier granted a stay order, temporarily halting the recovery process.

Subsequently, the FBR filed an application seeking dismissal of the stay order, arguing that the amended law renders such petitions non-maintainable. The court accepted the FBR's stance and vacated the stay.

The judgment stated that ZTBL may approach the relevant forum in accordance with the law if it so chooses; however, no further proceedings can continue before the IHC in this matter.

With the stay order now lifted, the FBR has been cleared to proceed with the recovery of billions of rupees from ZTBL.

ZTBL - Agricultural Development Bank - is a Pakistani state-owned agricultural development bank headquartered in Islamabad.

Founded in 1961 as ADBP, the bank was renamed in 2002 as Zarai Taraqiati Bank Limited and was subsequently incorporated as a public limited company in 2002 under Companies Ordinance 1984.