FBR bars commissioners from granting stay orders

Says it creates hurdles in achieving revenue targets.

ISLAMABAD: In a clear violation of law, the federal tax authorities have barred its justice department from granting stay orders against tax demands, mostly arbitrarily created by taxmen either to achieve their targets or sometimes harass taxpayers.

The move has created panic among the Commissioners Appeals, who are Grade-20 officers and acting as the first-tier justice dispensation wing of the Federal Board of Revenue (FBR).

The tax practitioners and the taxpayers, who have now been left at the mercy of taxmen, are also equally worried.



During a recent visit to Karachi, FBR Chairman Tariq Bajwa summoned the Commissioners Appeals and asked them not to grant any kind of stay orders against tax demands raised by the FBR officials, said a senior FBR official.

He reportedly said the stay orders were creating hurdles in achieving the tax targets.

He told the commissioners that if the demands were unjustified, the taxpayers could subsequently seek justice from high courts but the commissioners should not grant them any stay orders.

The Commissioner Appeals is the first level where the FBR’s tax-related orders can be challenged. If any party is not satisfied with the Commissioner Appeals judgment, it can go to the Appellate Tribunal. Against the decisions of the Appellate Tribunal, the party can go to high courts and the Supreme Court – a process that is time-consuming and highly costly.

“A few years back, the FBR created a Rs270 million unjustified sales tax demand against me and only the high court gave me relief, but that cost me Rs40 million,” said Khyber-Pakhtunkhwa Chamber of Commerce and Industry President Fuwad Ishaq.

The Karachi Tax Bar Association (KTBA) has already taken up the FBR chairman’s orders and sought an explanation from him through a letter. The letter states that the FBR does not have the authority to pass any directions to the Commissioner Appeals.

According to Clause 214(2) of the Income Tax Ordinance 2001, “no orders, instructions or directions shall be given by the board that will interfere with the discretion of the Commissioner Appeals in the exercise of his appellate function.”

Under the law, the Commissioner Appeals’ proceedings are treated as judicial proceedings and the tax bar vowed to defend the independence of judiciary.

Talking to The Express Tribune, Bajwa denied that he asked the commissioners to stop granting stay orders. “I have only asked them to proceed strictly in accordance with the law,” he said.

Instead of finding new taxpayers, the FBR is harassing the existing ones, said Karachi Chamber of Commerce and Industry President Iftikhar Vohra.

Speaking at the platform of a parliamentary committee, Vohra alleged that in Karachi, the FBR’s officers were settling the tax demands after taking bribes ranging from Rs50,000 to Rs300,000.

Sources said that the need to issue unlawful directions arose when the Commissioners Appeals started giving stay orders on demands created by a group of taxmen to harass the taxpayers.

Published in The Express Tribune, April 24^th,  2015.

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