The Corporate Tax Office (CTO) Islamabad has reportedly ignored an unchallenged order of Federal Tax Ombudsman (FTO) Zafar-ul-Haq Hijazi, undermining Pakistan’s Alternative Dispute Resolution Committee (ADRC) framework. This move is seen as contrary to Prime Minister Shehbaz Sharif’s vision of resolving tax disputes outside the courts.
Alleged Covert Recovery of Taxes
Sources say that a disputed tax demand, which the ADRC process was designed to resolve, has allegedly been recovered by CTO Islamabad. This was reportedly done by denying lawful refunds owed to the taxpayer, highlighting concerns about a culture of impunity within the Federal Board of Revenue’s field offices.
Undermining FTO Authority
The FTO exists to protect taxpayers from administrative excesses. When CTO Islamabad treats the FTO’s binding orders as optional, the FTO’s authority is weakened. Experts warn that such behavior risks eroding public trust in Pakistan’s tax dispute resolution institutions.
Refunds Adjusted Against Disputed Sales Tax
A refund officer is alleged to have adjusted lawful income tax refunds for 2018–2021 against a disputed sales tax demand, which is legally unenforceable and still pending resolution before an ADRC forum under FTO’s order. This action is seen as a serious procedural irregularity.
Violation of Multiple Legal Obligations
This single act has allegedly violated four binding legal obligations: a Supreme Court judgment, an Islamabad High Court ruling, an FBR policy circular, and a direct FTO order, raising questions about compliance within the CTO.
Taxpayer Reaction
The director of the affected company, Shehryar Ansari, described the incident as deliberate and calculated sabotage, not mere bureaucratic negligence. He emphasized that enforceable orders were issued under both income tax and sales tax regimes, which CTO Islamabad ignored without explanation.
Supreme Court Context
The Supreme Court, in case 2025 SCP 267, explicitly prohibits FBR officers from arbitrarily recovering taxes without following due legal process. Experts say the CTO’s actions are in direct conflict with this ruling, highlighting gaps in oversight and institutional accountability.
