PTBA seeks CJP’s attention on key tax matters

KARACHI: The Pakistan Tax Bar Association (PTBA) has brought to the attention of the Chief Justice of Pakistan (CJP) several critical issues concerning procedures, constitutional limitations and judicial practices in tax and other revenue matters.

In a letter addressed to the CJP, the tax body outlined the issues that need urgent attention and cases that should be prioritised. These include the 4B super tax, which was challenged through Civil Petition No1529/2020 filed before the Supreme Court, the 4C super tax challenged via Civil Petition No3401-L of 2023 against a Lahore High Court order, and Civil Petition No3825-K of 2023 against the High Court of Sindh before the Supreme Court.

The levy of Section 7E was challenged through Civil Petition No 1442-K/2022 before the Supreme Court, and the capital value tax (CVT) under Section 8 was challenged through Civil Petition No57/2023.

The PTBA emphasised that with the recent steps taken by the Supreme Court to automate the judicial system, it would be beneficial for revenue matters (tax and customs) that have attained finality in terms of law and legal interpretation to be made accessible to all courts and tribunals via an integrated platform. By sharing this vital information, courts and tribunals would be able to expedite cases with similar issues, potentially disposing of them at the ‘katcha peshi’ (pre-admissible hearing) stage, thus significantly reducing the backlog of tax and revenue cases.

Furthermore, the PTBA proposed that if any constitutional matter is sub judice before the Supreme Court with an interim order, other high courts (or the constitutional bench of such high courts) should be instructed to pause similar proceedings until the Supreme Court’s decision to ensure consistency in the law. The PTBA also requested that interim orders granted in constitutional matters should operate in rem, providing relief to taxpayers.

In addition, the PTBA called for clarification of the territorial jurisdiction of the Islamabad High Court in tax, corporate and other revenue matters to avoid duplication of proceedings before other high courts and to uphold the integrity of their territorial jurisdictions.

The tax body urged the CJP to ensure that tax and other revenue matters are disposed of in accordance with the time limitations set under Article 199(4A) of the constitution. It pointed out that the new Tax Laws Amendment Act, 2024, redefines appellate remedies under the income tax and sales tax laws. Under the new law, orders of the commissioner appeals in cases involving demands less than Rs20 million can now only be challenged in a reference before the high courts, accompanied by mandatory payment of 30 per cent of the disputed amount to seek a stay, along with a Rs50,000 reference fee.

The PTBA expressed concerns that these changes would place an additional burden on the high courts, potentially infringing on taxpayers’ fundamental rights to an expeditious and impartial hearing, while also limiting the courts’ inherent power to grant stays at their discretion.