Court dismisses over 60 petitions filed by tobacco manufacturers, rules FBR measures aimed at curbing tax evasion
Peshawar High Court. PPI PHOTO
The Peshawar High Court dismissed over 60 petitions filed by various tobacco manufacturing companies challenging the mandatory installation of CCTV cameras and e-billing systems in their units.
A two-member PHC bench, comprising Justice Syed Arshad Ali and Justice Faheem Wali, on Wednesday ruled that the amendments brought by the Federal Board of Revenue (FBR) to the Sales Tax Rules were legal, within the authority of the tax body and were aimed at ensuring transparency and preventing large-scale tax evasion.
During the hearing, lawyers representing the petitioner companies argued that the FBR had made installation of CCTV mandatory and required all outbound consignments to be reported to the FBR through e-invoices.
They maintained that such conditions were imposed without adequate 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 lawyer Barrister Aamir Javed urged the court to dismiss the challenges, stating that the FBR was fully empowered to amend sales tax rules.
He informed the court that the requirements were added after amending the Sales Tax Rules, 2006, with the sole objective of safeguarding over Rs 200 billion in tax revenue which the FBR said was being lost due to tax evasion by various factories.
He added that even a member of the FBR has the authority to set rules and the introduction of CCTV cameras and e-invoicing would bring transparency, strengthen the monitoring system and improve tax compliance.
The lawyer said the amendments were enacted after due legislative process and stakeholder consultation, and did not impose any undue burden on manufacturers, who were only required to pay taxes already required by law.
After hearing the arguments, the court dismissed all the petitions and upheld the FBR’s action, declaring the conditions of installation of CCTV and e-billing legally valid and in accordance with law.
