• Throws out FBR appeal in 2023-24 tax matter
• Orders scrutiny of cases by vetting panels before moving courts
• Regrets precious judicial time being spent on settled issues at cost of other cases
ISLAMABAD: The Supreme Court on Monday frowned upon the tendency of approaching appellate courts by government departments in a mechanical way by filing frivolous petitions on settled principles.
In a six-page judgement on a tax matter, a three-member SC bench observed that the state is expected to act responsibly as a fair litigant and not as a compulsive appellant/petitioner and directed the Federal Board of Revenue (FBR) chairman to determine whether the questions of law sought to be agitated before the court has already stand settled by superior court judgements.
Authored by Justice Miangul Hassan Aurangzeb, a member of the bench headed by Justice Naeem Akhtar Afghan, the judgement declared it imperative for the FBR chairman to consider constituting committees to vet each reference before filing it in a court of law.
To address the problem, according to the judgement, these committees should have the mandate to timely examine each case and function with the highest degree of independence. The committees may include a retired judge of the superior judiciary, an experienced tax practitioner and a senior serving or retired officer of the FBR with distinguished record and impeccable credentials.
The ruling came on an appeal of Assistant Commissioner, Inland Revenue Unit-III Zone-Cantt, Regional Tax Office, Rawalpindi, against the March 10, 2025 decision of the Lahore High Court (LHC) in favour of a private taxpayer.
The dispute originated when a notice was issued by the RTO, Rawalpindi, to one Umer Tariq Khan on Nov 15, 2023, alleging inadmissible input of Rs4 million tax. The order imposing the tax liability was passed on March 20, 2024, beyond the 120-day period stipulated under Section 11(5) of the Sales Tax Act, 1990.
The taxpayer challenged the order before the LHC, which while relying on an earlier precedent in Inland Revenue Commissioner vs. POF Welfare Packages SC judgements ruled that “time limit was mandatory”. The FBR then filed an appeal before the SC, which rejected it.
The SC judgement noted that government departments have tendency to file appeals/petitions mechanically, particularly when the outcome was foreseeable in light of settled law, but that had already been deprecated by the apex court in a number of judgements.
The bench made it clear that the courts possessed both constitutional authority and jurisprudential tools to address the problem of repeated appeals or petitions by government departments on settled questions of law. It explained the courts could dismiss such appeals/petitions in limine (rejecting pleas at a very initial stage even before issuing notice to respondents), sought identification of the officer for authorising the appeals/petitions, and even impose costs. With this explanation, the court emphasised on “internal accountability” by government departments and “careful legal scrutiny” before filing appeals/petitions.
“Had such scrutiny taken place before the filing of the instant petition, it would have been realised that the primary question of law sought to be agitated by the petitioners already stands authoritatively settled by a number of SC judgements,” the judgement explained.
‘Serious institutional harm’
When the government departments routinely file appeals/petitions, often up to the high courts and the SC on questions of law that have already been authoritatively settled, it noted, the practice results in “serious institutional harm” such as piling up of other cases with courts spending scarce judicial time revisiting the settled issues at the cost of undecided legal and constitutional questions, criminal appeals involving personal liberty, and civil disputes pending for years. This whole exercise undermines the constitutional mandate of speedy justice, it observed.
In the present petition, the department did not take the ground that the delay in passing of the ‘Order-in-Original’ was due to the frequent adjournments taken by the respondents. The department attempted to introduce this ground by filing an application wherein it was pleaded inter alia that the taxpayer had sought multiple adjournments from Nov 27, 2023 to Jan 4, 2024 in the proceedings before the assessment officer.
However, the department did not bother to file a copy of the order sheet of the proceedings before the assessment officer, the judgement regretted, adding this assertion of the department was belied before the high court.
When the state itself disregards binding precedents, it sends the wrong signals to subordinate courts, tribunals, and litigants. Such appeals/petitions result in unavoidable litigation costs, consumption of public funds for counsel, court fees and administrative processing, the judgement regretted.
Published in Dawn, February 3rd, 2026
