Sindh High Court Declares FBR Monitoring Orders on Private Business Null and Void

KARACHI: The Sindh High Court (SHC) on Saturday struck down an office order issued by the Federal Board of Revenue (FBR) that appointed tax officials to monitor private business premises, declaring the order null and void for lacking necessary legal safeguards.

The court observed that while the FBR has powers under the Sales Tax Act to assign officers for monitoring purposes, those powers are not unlimited and must be exercised within conditions and restrictions prescribed by law. According to the SHC, such monitoring orders require specific reasons and defined time limits, which were absent in the contested order.

During the hearing, the petitioner’s counsel argued that the FBR had deployed officers to multiple business entities without providing adequate justification or specifying the duration of the monitoring, effectively exceeding legal authority. The FBR’s lawyer asserted that the law permits monitoring to prevent tax evasion and fraud but did not insist that detailed explanations were mandatory in every case.

The SHC noted that statutory safeguards aim to prevent misuse of monitoring powers and found that the FBR failed to satisfactorily explain the purpose and duration of its orders. As a result, the court held that the impugned office order was legally defective and could not stand.

The ruling reinforces the principle that regulatory powers, even when intended for public interest like preventing tax evasion, must be exercised with clear legal backing and within defined limits.