ISLAMABAD: The Cabinet Division of the Government of Pakistan has filed a reply in the Islamabad High Court (IHC) against a petition filed by the Inland Revenue Service (IRS) challenging the notification for the constitution of a high-powered Implementation and Asset Distribution Committee (I&ADC) for restructuring the Federal Board of Revenue (FBR).

The Cabinet Division has raised objections that the IHC suspended the notification without hearing their point of view and that the petitioner has not come to the court with clean hands and has made frivolous litigation to create hurdles on FBR reforms that have been acknowledged and approved by international agencies like the World Bank and the IMF.

The Cabinet Division has argued that the proposed restructuring plan of FBR does not infringe any of the fundamental or constitutional rights of the petitioner and does not fall within the constitutional jurisdiction of the court under Article 199 of the Constitution of Pakistan. It has also contended that the petitioner does not have any cause of action and locus standi to file the petition as there is a consensus among the various stakeholders including the Government of Pakistan, International Donor Agencies and trade bodies and Chambers of Commerce that there is a dire need of broad-based reforms in FBR.

The Cabinet Division has further stated that the restructuring plan is urgent due to extreme financial difficulties being faced by the country and to avoid external default and to increase the Tax to GDP ratio to enable Pakistan to finance its fiscal deficit. It has claimed that the financial crisis and debt distress has mounted and no government in Pakistan, caretaker or elected, can afford to delay the corrective measures and the urgent steps taken by the Caretaker Cabinet are in the right direction and for the larger interest of the country and public.

The Cabinet Division has also asserted that the Caretaker Government has lawful mandate to undertake preparatory work for FBR restructuring as it is being carried out on the directives of Special Investment Facilitation Committee (SIFC) which has overriding effect over any law for the time being in force including the Election Act, 2017. It has added that the notification issued by the Government of Pakistan constituting a Committee for deliberating and making preparatory legal, financial and administrative framework for implementing the proposed restructuring plan is totally within the bounds of law as the Committee and Sub Committees will prepare requisite documentation for the next government and these are not for immediate implementation by the Caretaker Government but to take steps for follow up actions required for the Restructuring Plan.

The IHC has adjourned the hearing of the case till the next date. The IRS had approached the court against the notification alleging that it was issued by the Caretaker Government in violation of its constitutional mandate and that it would adversely affect the rights and interests of the IRS officers and employees.

An official said the restructuring plan was aimed at creating a separate Federal Board of Customs which would expose the corruption and inefficiency of the IRS as most of the IRS revenue is collected at the import stage by the Customs.