Filing unnecessary cases: SC hints at contempt proceedings against FBR

ISLAMABAD: The Supreme Court SC) on Monday hinted at initiating contempt of court proceedings against the concerned officials of the Federal Board of Revenue (FBR) for filing unnecessary cases in courts and sought explanation from its Member Legal.

A three-member bench of the apex court headed by Justice Umar Ata Bandial and comprising Justice Muneeb Akhtar and Justice Mazhar Alam Khan Miankhel heard the appeal, filed by FBR against the order passed by the learned Islamabad High Court (IHC).

The court observed that if it is not satisfied of the explanation than it would decide as to whether contempt of court proceedings may be initiated against the concerned officials of the FBR or take any other legal action.

As per details of the case, the FBR had issued notice to the management of Islamabad Club for payment of Special Excise Duty, however, the Club had challenged the FBR notice before Islamabad High Court which had set aside the said notice. The IHC held that as per SROs, Special Excise Duty is applicable only on the food production units while hotels and restaurants do not fall in the food production units. Meanwhile, the FBR moved the Supreme Court against the order of the Islamabad High Court. During the course of proceedings on Monday, counsel for the FBR while appearing before the court submitted that the learned high court had mis-interpreted the Act of Special Excise Duty and totally ignored Section 3 of the said Act which qualifies imposition of Special Excise Duty on hotels and restaurants.

Justice Muneeb Akhtar, a member of the bench, however, pointed out that the instant case falls under Section 3 (a) of the Special Excise Duty which clarifies that hotels and restaurants do not fall into food production units. "In this respect the FBR had also sought the opinion of the Ministry of Law which had also clarified that the Special Excise Duty cannot be imposed on hotels and restaurants”, Justice Muneeb added.

The judge further observed that even FBR’s own office memorandum is also in field which was issued on July 25, 2009 but despite that it challenged the order of Islamabad High Court and wasted the time of the Supreme Court. The court, while upholding the order of Islamabad High Court, dismissed the petition of FBR. On court’s query, Secretary Legal Section of FBR came to the rostrum and submitted that Member Legal is responsible for finalising the tax matter related cases and then file appeals in higher courts. At this, Justice Muneeb questioned as to whether Member Legal does not know that his own office memorandum is in field on the said legal point.

Justice Umar Ata Bandial asked the official to give explanation in this regard and after that they will look into the matter and decide as to whether a contempt proceeding or any other legal action may be proceeded against the responsible. Later, the court dismissed the appeal of FBR with direction to submit its explanation in the chamber regarding the questions raised during the course of hearing in the matter.