Court dismisses over 60 petitions filed by tobacco manufacturers, orders FBR measures aimed at curbing tax evasion
Peshawar High Court. PHOTO PPI
The Peshawar High Court dismissed over 60 petitions filed by various tobacco manufacturers challenging the mandatory installation of CCTV cameras and electronic billing systems in their units.
A two-judge PHC bench comprising Justice Syed Arshad Ali and Justice Faheem Wali ruled on Wednesday that the amendments introduced by the Federal Board of Revenue (FBR) to the sales tax rules were legal within the jurisdiction of the tax body and aimed at ensuring transparency and preventing large-scale tax evasion.
During the hearing, a lawyer representing the petitioning companies argued that the FBR had made CCTV installation mandatory and required all outgoing shipments to be reported to the FBR through electronic invoices.
They argued that such conditions were imposed without appropriate amendments to the rules and that the FBR lacked the authority to enforce these measures. The lawyers maintained that no country in the world imposed such surveillance on industrial units and warned that the policy would harm investment in the tobacco sector.
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Opposing the petitions, FBR’s counsel Barrister Aamir Javed urged the court to dismiss the challenges, stating that the FBR had full powers to amend the VAT rules.
He informed the court that the requirements were added after amendment of sales tax rules from 2006 with the sole purpose of securing more than Rs 200 billion. in tax revenue which, according to the FBR, was lost due to tax evasion by several factories.
He added that even an FBR member is empowered to frame rules and that the introduction of CCTV cameras and electronic invoicing would bring transparency, strengthen the surveillance system and improve tax compliance.
The lawyer said the amendments were passed after due legislative process and consultation of stakeholders and did not impose any undue burden on manufacturers who were only required to pay taxes already mandated by law.
After hearing the arguments, the court dismissed all the petitions and upheld the FBR measures and declared the conditions for CCTV installation and e-invoicing legally valid and in accordance with law.
