ISLAMABAD: The Supreme Court of Pakistan has ruled that the Federal Board of Revenue (FBR) must ensure the dignity of taxpayers during the tax recovery process. The ruling, issued by a three-judge bench led by Justice Munib Akhtar, dismissed the FBR’s petition challenging a high court order. It emphasized that any notice issued by the FBR seeking recovery on the same date as its issuance would undermine the legal safeguards meant to protect taxpayers.
Justice Ayesha Malik authored the nine-page judgment, stressing that the requirement of a notice before tax recovery is not merely a statutory requirement but also a constitutional one, rooted in the guarantees of due process, a fair trial, and the right to dignity as outlined in Pakistan’s Constitution.
The judgment addressed two key questions: whether the FBR could demand immediate payment when a notice is issued, or if it should specify a future date for compliance. The court ruled that Section 140 of the Income Tax Ordinance does not permit immediate coercive recovery without a specified due date. It clarified that any party holding money on behalf of the taxpayer must be issued a notice with a clear deadline for payment.
Justice Shahid Waheed, in his additional note, highlighted the intersection of tax law and taxpayer rights. He questioned whether the traditional authoritative approach to tax collection was justifiable, suggesting that it often prioritizes recovery over the protection of taxpayers’ fundamental rights. He urged a more balanced approach, one that respects the dignity of the taxpayer while ensuring efficient tax recovery.
Reflecting on the spirit of tax law, Justice Waheed likened the ideal tax collection process to that of a honeybee gathering nectar—conducted with care and without harm. He emphasized that the tax collection process should be respectful, transparent, and in strict accordance with legal protocols. Furthermore, he underscored that the right to dignity is foundational, from which all other rights derive, and should be preserved throughout the recovery process.
The ruling ultimately calls for a balance between enforcing tax obligations and upholding the dignity and rights of taxpayers, ensuring that recovery efforts are both effective and respectful.
