ByThe directive came in a case where the SHC set aside an order dated July 31, 2024, issued by the Commissioner (Appeals-VI), Karachi, under Section 129(1) of the Income Tax Ordinance, 2001. The matter involved a dispute over the applicable turnover tax rate, with the applicant contending for 0.2% on a product classified as “Fast Moving Consumer Goods,” against the assessing officer’s determination of 1%.
The SHC noted that the assessing officer and Commissioner (Appeals) failed to provide reasoned and speaking orders addressing the legal and factual aspects of the case. The applicant’s detailed reply to a show-cause notice under Section 122(9) of the Ordinance was dismissed without adequate reasoning, prompting the court to remand the matter to the original authority for fresh adjudication.
The court also highlighted the challenges arising from amendments in the Finance Act 2024, which allowed direct reference applications under Section 133 of the Ordinance to the High Court. Instead of reducing litigation, the change has increased the workload on courts due to poorly reasoned orders issued by tax authorities.
The SHC expressed concern over the routine issuance of “slipshod” orders by tax officers, including Commissioners (Appeals), which merely reproduce arguments without detailed analysis. Such practices have led to increased remands and protracted legal proceedings, causing delays for litigants and inefficiencies in the judicial process.
To address the issue, the SHC called on the FBR to ensure its officers are adequately trained to draft orders that are well-reasoned and in compliance with the law. This, the court noted, would facilitate swift resolution of tax disputes and reduce the burden on the judiciary.
