The Lahore High Court (LHC) issued contempt notices to the Federal Board of Revenue (FBR) over its failure to implement the court’s orders pertaining to the minimum tax computation formula adopted by service sector taxpayers liable to pay minimum tax under Section 153(1)(b) of the Income Tax Ordinance, 2001.

The notice was issued by a single bench comprising Justice Shahid Jamil Khan while hearing a petition seeking contempt proceedings against the revenue board’s chairman and two of its core members for not implementing the court’s earlier order dated 14 November.

The LHC took exception to the non-implementation of its order and observed that “commitment is not being honoured due to letter: Writ Petition No. 57220 of 2021 in case of Shahid Latif Khilji Vs Federation.”

The order, citing the petitioner, further read: “I am further directed to enclose a copy of an email dated 18th October 2021 of Mr Waheed Shahzad Butt wherein he has made serious objections on the proposed changes, affirming that the existing calculation in the system is correct as per law, and confirmed in certain earlier judgments (104 TAX 1 = 2011 PTD 1672) and decisions of the federal tax ombudsman.”

“He [the petitioner] warns that if the changes are made as now being proposed, it will lead to huge and undue loss of revenue. To avoid any mistake, the same is being brought to the notice of IR Policy Wing, with the request to re-examine the calculation in the light of the complaint’s assertions and cited case law.”

Documents have revealed that Waheed Shahzad Butt had sent emails to FBR, regretting that some “public servants in FBR’s IT wing are living in a fool paradise”, adding that that in all eventualities, “he/she is bound to abide by and adhere to the law and the constitution.”

The court sought a reply from the FBR and adjourned the hearing.