Tax reform optics stir debate

Judges–FBR huddle raises questions over AGP's exclusion

ISLAMABAD:

Senior lawyers have raised serious concerns over a recent meeting between judges and government officials on tax-related issues held last week.

Chief Justice of Pakistan Yahya Afridi, in his capacity as chairman of the National Judicial (Policy Making) Committee (NJPMC), chaired a high-level consultative meeting on April 16 at the Supreme Court of Pakistan.

The meeting focused on measures aimed at improving efficiency, strengthening coordination, and ensuring timely resolution of tax litigation—an area considered crucial for fiscal governance and economic stability.

The meeting was attended by Justice Miangul Hassan Aurangzeb, Prime Minister's Task Force on Tax Litigation Framework Chairman Shad Muhammad Khan, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial, and senior FBR officials.

Judges nominated from the high courts, along with registrars of high courts, also participated. However, no representative from the Attorney General for Pakistan (AGP) office was present, raising further questions among lawyers about how judicial engagement with FBR officials took place in the absence of the country's chief legal officer.

Since the passage of the 26th Constitutional Amendment, members of the legal fraternity have expressed unease over what they describe as increasing executive influence over the judiciary. Tax lawyers, in particular, argue that higher courts provide limited relief in disputes involving FBR orders.

Against this backdrop, the optics of superior court judges meeting government officials, including the FBR chairman, have unsettled some lawyers, who fear it may create an impression that the judiciary and executive are aligned on revenue collection matters, especially while numerous cases remain pending before the courts.

They argue that judges should avoid any perception that the judiciary and executive are "on the same page" in fiscal or revenue-related issues.

Former Additional Attorney General Waqar Rana said the government is constitutionally represented by the AGP, who could have effectively conveyed institutional challenges in tax litigation. He added that while such consultative meetings have taken place in previous judicial tenures as well, questions of impartiality and fairness remain central.

He further noted that excluding representatives of industry and business communities could raise concerns about judicial independence. However, he also stated that such concerns are not new within Pakistan's constitutional and judicial framework.

Another senior lawyer questioned the nature of the consultative process, arguing that the FBR itself is a major litigant. "In such a scenario, who represents the taxpayers, especially those affected by alleged misuse of authority by tax officials?" he asked.

He further argued that if tax laws were implemented fairly, litigation would significantly reduce. "Has such widespread tax litigation been seen in jurisdictions where the rule of law is genuinely upheld?" he added.

He also suggested that the chief justice should primarily focus on adjudicating pending cases, leaving reform and policy matters to appropriate legislative and institutional forums.

A former senior law officer stated that judges' primary role is to adjudicate cases and deliver judgments. He noted that one judge brought from the Islamabad High Court as a tax expert has delivered only a few judgments so far, while another judge has disposed of hundreds of tax references in recent months—mostly through brief orders remanding cases for rehearing, without substantial rulings on legal questions.

He added that earlier judicial traditions would have frowned upon meetings between the Chief Justice and major litigants such as the FBR. He also questioned the absence of representation from the proposed Federal Constitutional Court (FCC), which is expected to hear a large portion of pending tax cases.

He further observed that the FCC has so far delivered limited tax jurisprudence, with reasons in key judgments still awaited. He argued that if reforms for faster tax dispute resolution were under discussion, representation from the Tax Bar should also have been included.

According to him, data on departmental success rates in litigation would reveal that a significant portion of cases originate from flawed or unjust administrative orders. He concluded that reform should remain the domain of the Law Commission and Parliament.

However, Hafiz Ahsaan Ahmad Khokhar Advocate, who is also a member of the Prime Minister's Task Force on Revamping Legal Wings of the FBR, supported the meeting, calling it a positive and timely step toward improving tax litigation management and fiscal governance.

He emphasized the need for continued reform initiatives and adoption of international best practices for early resolution of tax disputes, while ensuring they remain within legal boundaries and judicial prudence.

He stressed stronger institutional coordination for prioritizing and expediting high-stakes cases involving significant legal and revenue implications. He also recommended extending similar coordination mechanisms to other government departments facing heavy litigation, to ensure structured case management and timely adjudication.

According to him, the tax litigation system continues to face systemic challenges within the FBR, including inconsistent interpretation of tax laws, weak legal scrutiny at the assessment stage, and unnecessary appeals despite settled Supreme Court judgments.

He also highlighted the absence of a unified litigation policy across field formations and appellate bodies. He further noted that the state often continues litigation without proper cost-benefit analysis, leading to avoidable burden on courts, wastage of public resources, and prolonged uncertainty for taxpayers and investors.

He concluded that while the reform process is encouraging, its success depends on effective implementation.