In a recent move that has stirred considerable controversy, the Lahore Tax Bar Association (LTBA) has strongly opposed the government’s proposal to dismantle the primary Appellate Forum of Commissioner Appeals, arguing that such a decision could significantly disrupt the enforcement of critical fiscal laws and unfairly affect taxpayers’ rights across the country.
The Appellate Forum of Commissioner Appeals currently functions as the initial fact-finding body in taxation disputes, playing a pivotal role under several crucial legislations such as the Income Tax Ordinance, 2001, the Sales Tax Act, 1990, and the Federal Excise Act, 2005.
This body’s potential dissolution is viewed by many experts and professionals within the field as a threat to the integrity and transparency of the tax adjudication process.
In a comprehensive letter addressed to the Finance Minister, the Lahore Tax Bar detailed its concerns regarding the proposal, which aims to streamline tax dispute resolutions by eliminating the first appellate layer and making the Appellate Tribunal Inland Revenue the sole fact-finding authority. The LTBA warns that this could lead to an overburdened Tribunal, currently already dealing with a staggering backlog of over 70,000 pending appeals.
The Association has highlighted the critical role that the First Appellate Forum plays in mitigating the Tribunal’s caseload. Data shows that approximately 70% of disputes are resolved at this initial stage, preventing further appeals. Without this filtering mechanism, there is a risk that even more cases will reach the already congested higher courts, potentially leading to longer delays in justice.
Moreover, the LTBA raises concerns about the implications for the rule of law and natural justice. Removing the First Appellate Forum could severely limit the opportunities for taxpayers to seek redress or review of departmental decisions, concentrating too much authority in a single tribunal and leaving little room for error correction.
The LTBA’s stance is bolstered by references to international norms and practices in neighboring countries, where maintaining a preliminary departmental appellate authority is deemed essential for effective tax dispute resolution. The Association argues that the proposed elimination of this forum not only conflicts with established practices but also undermines fundamental rights safeguarded by the rule of law.
As part of their recommendations, the LTBA is not only urging the government to reconsider its decision but is also proposing practical reforms to improve the efficiency and effectiveness of the First Appellate Forum. These include setting specific timeframes for the resolution of appeals to reduce backlogs and ensure timely justice.
The LTBA’s call for action underscores a broader concern about the potential for increased judicial strain and delayed resolutions that could arise from the proposed restructuring. Tax professionals and stakeholders across the spectrum are keenly observing developments, as the government’s decision could have far-reaching implications for tax administration and justice in Pakistan.
The debate over the proposal continues as various sectors of society, including legal experts, business communities, and taxpayer associations, weigh in on the potential impacts. The LTBA remains at the forefront, advocating for a balanced approach that respects taxpayer rights while seeking efficiency in the tax dispute resolution process.
