Court dismisses over 60 petitions filed by tobacco companies, rules on FBR measures to curb tax evasion
Peshawar High Court. PHOTO PPI
The Peshawar High Court has dismissed over 60 petitions filed by various tobacco manufacturing companies challenging the mandatory installation of CCTV cameras and e-invoicing systems in their units.
A two-member PHC bench comprising Justice Syed Arshad Ali and Justice Faheem Wali on Wednesday ruled that the changes introduced by the Federal Board of Revenue (FBR) to the sales tax rules were legal, falling within the authority of the tax body, and aimed at ensuring transparency and preventing large-scale tax evasion.
During the hearing, lawyers representing the petitioner companies argued that the FBR had made installation of CCTV surveillance mandatory and required all outgoing consignments to be reported to the FBR through e-invoices.
They argued that such conditions were imposed without appropriate amendments to the rules and the FBR had no power to enforce these measures. The lawyers said no country in the world imposes such monitoring on industrial units and warned that the policy would harm investments in the tobacco sector.
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Opposing the petitions, FBR lawyer Aamir Javed urged the court to dismiss the challenges, saying the FBR had full authority to amend the sales tax rules.
He informed the bench that these requirements were added after the amendment to the Sales Tax Rules, 2006, with the sole objective of preserving over Rs 200 billion in tax revenue which the FBR said was being lost due to tax evasion by several factories.
He added that even a member of the FBR has the power to frame rules and the introduction of CCTV cameras and e-invoicing would bring transparency, strengthen the surveillance system and improve tax compliance.
The lawyer said the amendments were adopted after due legislative process and stakeholder consultation, and do not impose any undue burden on manufacturers, who are only required to pay taxes already imposed by law.
After hearing the arguments, the court dismissed all the petitions and upheld the FBR’s measures, declaring the conditions of installation of CCTV and e-invoicing legally valid and in compliance with law.
