LHC Questions Rs2 Trillion Tax Case Backlog, Summons FBR Representative

The Lahore High Court (LHC) was informed that Rs2 trillion worth of tax cases remain stuck in litigation at the Appellate Tribunal Inland Revenue (ATIR) due to bench shortages, delays in case scheduling, and irregular formations. The issue surfaced during a hearing on a petition challenging the Tax Laws (Amendment) Act, where the law ministry acknowledged the backlog.

Presiding over the case, Justice Jawad Hassan noted that recent amendments had effectively eliminated a level of appeal, raising concerns about access to justice. He summoned a Federal Board of Revenue (FBR) representative on March 25 for an explanation regarding the changes.

The judge pointed out that many tax cases at the LHC originated from procedural flaws within the FBR, such as inadequate legal references, improper hearings, and poorly issued decisions. These issues often forced the court to remand cases, further increasing the backlog of pending tax references.

Justice Hassan also highlighted a disparity in access to justice, noting that while FBR faced no financial constraints in filing appeals, ordinary litigants had to pay Rs50,000 per reference. He suggested that this practice could violate constitutional rights under Articles 4, 10-A, and 37(d).

The amendments had placed additional pressure on the LHC, which has limited tax reference benches—one in Bahawalpur, one in Multan, two in Rawalpindi, and three at the principal seat in Lahore. He also criticized commissioners (appeals) for issuing poorly structured and weakly reasoned decisions, fueling excessive litigation.

While government representatives defended the amendments as an effort to reduce unnecessary appeals and streamline tax dispute resolution, the court warned that such reforms must not compromise due process and judicial fairness.