PTA Wins Rs. 1.37 Billion Tax Case Against FBR

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) secured a significant legal victory against the Federal Board of Revenue (FBR) concerning the unauthorized deduction of Rs. 1.37 billion in advance tax. The Islamabad High Court (IHC), under Justice Babar Sattar’s jurisdiction, ruled in favor of PTA and directed the FBR to address PTA’s refund request within two months.

The dispute originated in 2018 when FBR withdrew Rs. 1.37 billion from PTA’s bank account as an advance tax without prior notification. According to the Income Tax Ordinance, such deductions require prior notice, making FBR’s action legally questionable.

Justice Babar Sattar ruled that the FBR’s actions violated due process and PTA’s fundamental rights. The court highlighted that the absence of proper notification rendered the deduction illegal.

Following the unauthorized deduction, PTA sought reimbursement for the excess tax. However, the Commissioner of Inland Revenue failed to respond within the timeframe required by law, escalating the issue further.

IHC’s Directives

The court issued the following orders:

1. Fine on Commissioner of Inland Revenue: The IHC imposed a Rs. 100,000 fine on the Commissioner for failing to act within the legal timeframe. This amount must be paid to the PTA within 30 days.
2. Refund and Resolution: FBR was instructed to process the refund and resolve the matter within the specified deadline.

Justice Sattar emphasized the importance of adhering to legal procedures and ensuring taxpayers are notified before any deductions. He urged the FBR to implement necessary measures to prevent such incidents in the future.