A quieter but arguably more consequential legal battle than any single tax dispute is unfolding before the Islamabad High Court, concerning not what taxpayers owe, but who has authority to review how FBR treats them.
FBR and the Revenue Division have petitioned the Court to set aside presidential orders and, more fundamentally, to declare void an entire set of suo motu proceedings the Federal Tax Ombudsman initiated between 2022 and 2023. The department's argument rests on Section 9 of the Federal Tax Ombudsman Ordinance, 2000. Section 9(1) grants the Ombudsman authority to act on its own motion against maladministration. Section 9(2), however, bars entering matters of tax assessment, determination of liability, or adjudication where statutory remedies such as appeal or revision already exist under the Income Tax Ordinance. FBR argues the disputed proceedings crossed that line, reaching into audit mechanisms, withholding compliance, and digital tax systems under cover of maladministration, making the framework ultra vires and void from the outset.
There is a further layer worth noting. During earlier proceedings on this jurisdictional question, the department also argued that a presidential order had simultaneously acknowledged the Section 9(2) bar while describing it as not absolute, a position FBR's counsel called internally inconsistent. The underlying principle is familiar in statutory interpretation. Where the legislature has expressly excluded a forum's jurisdiction over a defined category of matters, no executive authority, including the President acting on a representation, can dilute or partially reopen that exclusion through interpretation alone.
This case matters beyond its immediate parties. If the Court narrows the Ombudsman's suo motu authority strictly to procedural maladministration, taxpayers lose a forum that has, in recent months, proven willing to order faster refunds, protect confidentiality, and build safeguards against arbitrary enforcement. If the Court affirms a broader reading capable of reaching substantive tax questions, FBR loses an argument it has relied on for years to resist Ombudsman oversight of its core functions.
For practitioners, the immediate lesson is procedural discipline in complaint drafting. Any complaint filed with the FTO should be framed carefully around genuine maladministration rather than disguised assessment or valuation disputes, since the jurisdictional line this case draws is likely to become the test applied to every future complaint. Until the Court rules, the safer course is to treat Section 9(2) as a real boundary and pursue substantive tax questions through ordinary appellate channels, reserving the Ombudsman for genuine administrative failure rather than a shortcut around litigation.
Muhammad Rehan Sarwar
Advocate High Court,
The Nomologists Law Firm
#FTO #FBR #TaxLaw