In a bid to ensure effective implementation and enforcement of tax-related regulations, Section 72 of the Sales Tax Act, 1990, mandates that officers of Inland Revenue and other individuals engaged in the execution of the Act must adhere to the orders, instructions, and directions issued by the Federal Board of Revenue (FBR).
The provision, updated up to June 30, 2021, through the Finance Act, 2021, emphasizes the importance of alignment with FBR directives while acknowledging the need to preserve the discretionary powers of Inland Revenue officers in certain quasi-judicial functions.
The specific text of Section 72 is outlined as follows:
72. Officers of Sales Tax to follow Board’s orders, etc.— All officers of Inland Revenue and other persons employed in the execution of this Act shall observe and follow the orders, instructions, and directions of the Board: Provided that no such orders, instructions, or directions shall be given so as to interfere with the discretion of [officers of Inland Revenue in the exercise of their quasi-judicial functions.
Key components and implications of Section 72 include:
1. Binding Nature of FBR’s Orders: The section establishes a legal obligation for all officers of Inland Revenue and other individuals involved in the execution of the Sales Tax Act, 1990, to observe and follow the orders, instructions, and directions issued by the Federal Board of Revenue. This ensures a uniform and coordinated approach in the execution of tax-related matters.
2. Preservation of Quasi-Judicial Discretion: While emphasizing adherence to FBR directives, the provision incorporates a proviso to safeguard the discretionary powers of officers of Inland Revenue in the exercise of their quasi-judicial functions. This nuanced approach allows for the necessary flexibility in decision-making processes that involve quasi-judicial functions.
3. Effective Implementation of Tax Regulations: By requiring officers and individuals to comply with FBR’s orders, the provision aims to streamline the execution of the Sales Tax Act, 1990. This alignment with FBR directives is crucial for the effective implementation of tax regulations and the achievement of broader fiscal objectives.
4. Balance between Centralized Directives and Local Discretion: Section 72 strikes a balance between centralized directives from the FBR and the need to preserve local discretion, especially in quasi-judicial functions. This ensures that the execution of the Sales Tax Act remains responsive to both overarching national policies and specific circumstances at the local level.
The inclusion of Section 72 in the Sales Tax Act, 1990, reflects a commitment to maintaining consistency and coherence in the administration of tax laws. It recognizes the hierarchical structure within the tax administration, where centralized directives from the FBR play a pivotal role in guiding officers in the field.
Stakeholders in the taxation sector are encouraged to familiarize themselves with the provisions of Section 72, as it sets the framework for the conduct of officers of Inland Revenue and individuals engaged in the execution of the Sales Tax Act. It underscores the collaborative relationship between local officers and the FBR to ensure effective tax governance while respecting the discretionary functions integral to quasi-judicial decision-making.
