SHC rules out civil court’s jurisdiction on tax matter

KARACHI: The Supreme High Court (SHC) ruled that a civil court doesn’t have an authority to decide a tax dispute, giving an opportunity to the officials to speed up recovery of outstanding taxes. 

“A Civil Court… has not been conferred with any jurisdiction under the Constitution or any other law to entertain or decide a dispute relating to determination and assessment of duty and taxes under special taxation laws… therefore, cannot be treated as a Civil Court of ultimate jurisdiction for the purposes of deciding any controversy arising or relatable to the aforesaid taxing statutes,” read an order by a division bench of the SHC last week.

Federal Board of Revenue, following the order, directed tax departments to speed up disposal of court cases, especially in civil suits, an official said on Tuesday. The official at Large Taxpayers Unit, Karachi the tax officials would use SHC order as a reference with regards to pending civil suits.

Tax official said a large number of cases have been filed as civil suits in various courts as billions of rupees of national exchequer are stuck. “The interpretation of the SHC will help in speedy disposal of cases that are in the civil courts,” the official added.

Tax consultant Asif Kasbati said pending suits relating to the tax matters may be rejected by the higher court following the judgment and even stays will also be vacated.  “This will lead to freezing of bank accounts /recovery measures by the tax departments very soon,” he added.