Riaz Begum
The Appellate Tribunal Inland Revenue (ATIR) serves as an independent forum for resolving tax disputes, providing a crucial avenue for both taxpayers and tax authorities to seek justice. However, the current state of affairs within ATIR raises significant concerns, particularly with regard to its effectiveness, impartiality, and overall ability to administer justice. This is a pressing issue, especially considering the Prime Minister’s deep concern about revenue matters, specifically the cases pending before legal forums. My extensive legal experience in handling tax matters has led me to conclude that the real bone of contention within ATIR is not merely the legal complexities of tax revenue but also the problematic internal dynamics and practices that compromise its integrity and effectiveness.
One of the most glaring issues with ATIR is the questionable nature of the appointments of its members. Unlike other judicial bodies where appointments are based on merit, tenure, and a rigorous process of assessment, the appointments at ATIR often appear to be influenced by factors outside these norms. The members, who should ideally come from a specific cadre with a clear track record of Annual Confidential Reports (ACRs) and promotions, are instead often appointed through a process that seems more akin to contract-based hiring. This approach not only undermines the professionalism and credibility of the tribunal but also fosters a culture where financial gain takes precedence over judicial responsibility.
The prevailing environment within ATIR, where private parties, including members, staff, and lawyers, are allegedly engaged in practices akin to business transactions on a percentage basis, is deeply troubling. Such practices suggest a system where decisions can be influenced by financial incentives rather than being based on the merits of the cases. This perception, whether entirely accurate or not, erodes trust in the tribunal’s ability to deliver fair and impartial justice. It also dissuades competent professionals from engaging with the tribunal, fearing a compromised and biased process.There is another important aspect that there are two factions among the judicial members, who are in conflict with each other to rule the ATIR.This rift is significantly hindering the smooth functioning of the system and needs to be addressed urgently.
To address these systemic issues, it is imperative that the leadership of ATIR be reformed. The appointment of a serving, most senior session judge as the chairman of the tribunal would be a significant step towards restoring credibility and ensuring that the tribunal operates with the highest standards of judicial integrity. Drawing a parallel with the functioning of banking courts, which have been noted for their progressive and result-oriented approach, a similar model could be adopted for ATIR. This would involve appointing judges who are not only experienced but also committed to upholding the principles of justice and fairness without succumbing to external pressures or financial motivations.
The challenges faced by those working on merit within ATIR are substantial. Professionals who strive to uphold the principles of justice often find themselves at odds with the prevailing culture within the tribunal. The lack of transparency and the opaque manner in which the tribunal operates exacerbate these challenges. There is often no clear cause list, no transparent process for the formation of benches, allocation of cases, or provision of briefs. This lack of transparency leaves the Departmental Representatives (DRs) of the tax department in a precarious position, struggling to effectively participate in proceedings due to a lack of information and preparation.
Moreover, the tribunal’s reluctance to accommodate legal advisors from the department further complicates matters. The presence of departmental legal advisors should ideally enhance the tribunal’s understanding of the cases and ensure that the state’s interests are adequately represented. However, the tribunal’s resistance to this practice suggests an unwillingness to engage in a fair and balanced adjudicative process. This resistance creates an environment where the tribunal is seen as playing a one-sided game, disadvantaging the tax department and compromising the integrity of the judicial process.
The issue is compounded by the fact that taxpayer legal advisors, who often have vested interests, sometimes become judicial members. This practice raises serious questions about the ability of these individuals to impartially protect state revenue. When those who have previously represented taxpayers in disputes against the state are appointed as judicial members, there is an inherent conflict of interest. This situation undermines public confidence in the tribunal’s ability to administer justice impartially and to protect the interests of the state.
To address these issues, it is crucial to undertake a comprehensive reform of ATIR. This reform should begin with a thorough review of the appointment process for members, ensuring that it is based on merit, experience, and a proven track record of integrity. The tribunal’s operations should be made more transparent, with clear and publicly accessible cause lists, transparent procedures for bench formation, and fair allocation of cases. This transparency will help build trust in the tribunal’s operations and ensure that all parties have a fair opportunity to present their cases. Additionally, the role of departmental legal advisors should be strengthened, with their presence being recognized as essential for a fair adjudicative process. Their involvement should not be seen as an anomaly but rather as a necessary component of ensuring that the state’s interests are adequately represented and protected.
The Appellate Tribunal Inland Revenue (ATIR) stands at a critical juncture. The current issues within the tribunal, ranging from questionable appointments to a lack of transparency and perceived bias, undermine its ability to administer justice effectively. Comprehensive reforms are needed to restore the tribunal’s credibility and ensure that it operates with the highest standards of judicial integrity. By addressing these systemic issues, ATIR can become a truly independent and impartial forum for resolving tax disputes, thereby fulfilling its intended role in the justice system.
The author is an Advocate of the Supreme Court of Pakistan, specializing in corporate tax and arbitration laws, with extensive practice experience in Pakistan, UAE, and Qatar.
