IHC tax bench's order: All SOE references be routed thru ADRC
ISLAMABAD: The special tax division bench of the Islamabad High Court has ordered that all tax references filed by state-owned enterprises shall be referred to the Alternate Dispute Resolution Committee under Section 134A of the Income Tax Ordinance, 2001.
The state-owned enterprises contended that those tax reference applications which were instituted prior to the enactment of the Tax Laws Amendment Act, 2024 ought to be adjudicated by the Court in accordance with the procedure applicable at the time of filing of the tax reference application.
However, the counsel for the Commissioner, Osama Shahid (Advocate) placed reliance upon a recent judgment of the Supreme Court of Pakistan wherein a case filed in the year 2023 (i.e., prior to the enactment of the Tax Laws Amendment Act, 2024) was referred to the mandatory alternate dispute resolution committee under Section 134A of the Ordinance. In light of the Supreme Court's judgment, the Islamabad High Court referred to matters to alternate dispute resolution committee.
Tax dispute: IHC grants conditional relief to SOE
Earlier, the Islamabad Bench of the ATIR had referred several appeals filed by and against state-owned enterprises to the alternate dispute resolution committee. The Commissioner Inland Revenue (Appeals), Islamabad has also refused to adjudicate any appeal filed by a state-owned enterprise in light of the Supreme Court's judgment.
It appears that the only recourse available to a state-owned enterprise in case of a tax dispute is the alternate dispute resolution mechanism provided under Section 134A of the Ordinance regardless of whether the dispute initiated prior to or after the enactment of the Tax Laws Amendment Act, 2024.
It is pertinent to note that several state-owned enterprises have also assailed the vires of the Tax Laws Amendment Act, 2024 before the Islamabad High Court by filing writ petitions which are currently sub judice.
Copyright Business Recorder, 2025
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