Islamabad:
The Supreme Court has judged that the Federal Board of Return (FBR) should preserve the dignity of taxpayers while taking tax collection measures.
A nine pages judgment written by judge Ayesha Malik, rejecting the request of FBR against an order of the High Court, noted that a notice which requests the resumption on the same date that his issue will be worth the very objective of set a date and would make the tasting legal. “Yet another aspect which is important is the constitutional subsidy of article 140 of the ordinance.”
The decision observed that the requirement of opinion before the recovery is not simply legal but reflects the wider guarantees of the regular procedure and the fair trial under article 10a of the Constitution, as well as the right to dignity under article 14.
The courts have constantly argued that even in tax matters, recovery must be carried out in a manner that respects the dignity and legal guarantees of the individual. Therefore, even when the law authorizes coercive recovery, it must be carried out in a way that preserves the dignity of the taxpayer.
The judgment was rendered by a bench of three judges of the Supreme Court, led by the judge Munib Akhtar, who examined two basic questions: if an FBR commissioner may require an immediate payment on the same day that a notice is issued under article 140 of the tax order, or if the order requires a future date of compliance.
The FBR position was that the immediate recovery is authorized under article 140, without obligation to issue a subsequent opinion or provide a specific payment date.
However, the judgment has judged that article 140 does not allow immediate coercive recovery in the absence of a due date. When interpreted in context, the provision requires that any party holding money in the name of the taxpayer has issued an opinion which clearly specifies a deadline for responsibility for responsibility.
In his additional note, judge Shahid Waheed said that a substantial question before the bench was the intersection of tax law and taxpayers’ rights.
“In a legal framework which marries fundamental rights, such as the right to a fair trial, access to justice, the right to dignity and the regular procedure,” he noted.
He asked a critical question: if there is a justifiable reason to maintain a culture of domination authoritative in tax collection?
“This survey calls into question the existing standards which often prioritize the resumption of taxes above the rights and protections guaranteed to taxpayers, potentially undermining the very essence of justice. It also invites an in-depth examination of the delicate balance which must be maintained between the effective rights of tax debts, such as mandated by law and imperative to protect the rights of those imposed.”
Judge Waheed has also thought about the spirit of articles 137, 138 and 140, compare the ideal recovery process to that of a bee: “When you plunge into the provisions of sections 137, 138 and 140 of the taxpayer with dignity and respect, (b) strict membership in established legal protocols and procedures, and (c) the supply of transparent directives. “”
Describing the procedural route, he noted: “How is it like this? This becomes clearer when we decompose the stages involved in the taxation of the tax, which are made up of three phases. The first phase implies the declaration of tax liability, indicating the taxpayer’s financial obligations.”
Subsequently, the second phase includes the evaluation process, detailing the exact sum that the taxpayer is legally obliged to pay. “Finally, if the taxpayer does not fulfill this obligation voluntarily, the third phase introduces the recovery methods to be used.”
Stressing the primacy of dignity, he stressed: “The right to dignity is the most central of all fundamental rights, because it is the source from which all the other rights are derived. The order aims to find a balance between the tax resumption and the maintenance of the dignity of the taxpayers. The recovery process carried out in these cases has despised this balance.”
Judge Waheed also observed: “The fact of not verifying whether the” amount to be paid “had been classified as” due tax “before declaring the taxpayer (respondent) as a failure – and subsequently issuing a direct payment notice to the person who has money in the name of the taxpayer (respondent) – Amount to discredit.
He warned against oppressive collection practices. “No legal standard can justify the culture of domination authoritative in the resumption of taxes, because it fundamentally undermines the fundamental principles of justice. This creates an imbalance between the need for effective tax resumption and the protection of taxpayers’ rights.”
