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Express Tribune
16-06-2025
- Politics
- Express Tribune
IHC judge disputes legality of new court rules
Islamabad High Court (IHC) judge Justice Babar Sattar has raised objections to the newly notified Islamabad High Court Establishment (Appointment and Conditions of Service) Rules, 2025, asserting they lack legal authority as they were not approved by a full court. In a letter addressed to all ten IHC judges, Justice Sattar stated that he was not aware of any full court meeting convened to consider the enactment of the Rules or the repeal of the rules. "The Rules are, therefore, devoid of legal authority and have been issued in breach of the requirements of Article 208 as well as those of the Lahore High Court Rules and Orders, as adopted by the Islamabad High Court," he argued. The letter, along with a copy of the new rules, has been submitted to the Supreme Court during hearings on a petition filed by five IHC judges challenging the transfer of three judges from other high courts to the IHC. Justice Sattar urged his fellow judges to undertake corrective measures without delay, stressing the potential consequences for IHC staff. He noted that if rules are challenged or it otherwise emerges that the high court has itself purported to enact rules in breach of requirements of Article 208 of the Constitution and the Lahore High Court Rules and Orders, "it will cause great embarrassment to this high court". He added that it would also prejudice "the rights and entitlements of the employees of this Court". He noted having received S.R.O. 585(1)/2025 dated March 25, 2025, which was published in the Gazette of Pakistan on April 10, 2025, notifying the Islamabad High Court Establishment (Appointment and Conditions of Service) Rules, 2025. "The preamble states that the Rules have been enacted in exercise of authority under Article 208 of the Constitution, which says that the Supreme Court, the Federal Shariat Court and the Islamabad High Court, with the approval of the President and a High Court, with the approval of the Governor concerned, may make rules providing for the appointment by the Court of officers and servants of the Court and for their terms and conditions of employment." Justice Sattar contended that constitutional authority under Article 208 rests with the full high court. "The authority under Article 208 of the Constitution is vested in the High Court which is defined in Article 192 of the Constitution as consisting of a Chief Justice and Judges of the High Court. The power created by Article 208 can neither be delegated nor be exercised in any manner other than by the High Court itself i.e. all Judges of the High Court in a collegiate manner." He further pointed to legal limitations regarding the delegation of such powers, noting that it was a settled proposition that discretionary authority cannot be sub-delegated unless the law which creates such authority provides for its further delegation. Justice Sattar added that no such delegation exists under the existing provisions. "In any event, the power under Article 208 of the constitution has not been delegated as is evident from the provisions of Rule 5(2) of Chapter 10, Part A of Volume-V of the Lahore High Court Rules and Orders, adopted by the Islamabad High Court." He also cited case law on the matter. "The manner in which the High Court can exercise authority in terms of Article 208 of the Constitution has also been explained in Muhammad Shabbir vs. Registrar, Islamabad High Court and another (Judicial Service Appeal No. 03 of 2026)," he added. Meanwhile, another IHC judge, Justice Saman Riffat, also submitted her own letter to the SC. In her May 5 letter to the IHC registrar, Justice Riffat refers to the earlier notification regarding the Islamabad High Court Practice and Procedure Rules, 2025, published via Gazette Notification No. S.R.O.169(1)/2025 dated February 18, 2025. "As the letter dated 25-4-2025 informed her that the Islamabad High Court Practice and Procedure Rules, 2025 have been published vide gazette Notification No.S.R.O.169(1)/2025 dated 18.02.2025." She referred to previous correspondence contradicting the registrar's claim. "Please recall that vide Letter dated 11-3-2025 you were informed that contrary to your assertion the Rules & Orders of the Lahore High Court. Lahore were in fact adopted by the Honourable Chief Justice and Honourable Judges of this Court vide Notification No. 354/Legis/IHC dated 28-08-2019 and not by the Administration Committee. You were directed to provide all the amendments that have been made to the Rules & Orders of the Lahore High Court, Lahore by the Administration Committees of this Court as claimed by you as well as the date on which the purported Islamabad High Court Practice and Procedure Rules, 2025 were framed and the names of the Members of the Administration Committee who framed the same." She further noted the absence of a reply. "Neither such information nor copy of the Rules has been provided despite lapse of 10 days since your last letter confirming their publication," she added. Justice Riffat reiterates her demand. "Once again you are directed to provide the information and documentation as well as the purported Islamabad High Court Practice and Procedure Rules, 2025," she added.
Business Recorder
13-06-2025
- Business
- Business Recorder
IHC ruling favours FBR: Leading telecom co to pay Rs22bn
ISLAMABAD: The Islamabad High Court (IHC) has issued a judgement against a leading telecom operator, which would result in payment of Rs22 billion (US$78 million) to the Federal Board of Revenue (FBR). In this regard, a Division Bench of the Islamabad High Court, led by Justice Babar Sattar, has delivered a significant ruling in favor of revenue in a tax reference filed by a major Telecom operator. This ruling upholds the powers and jurisdiction of the Federal Board of Revenue (FBR) in assessing tax liability on a high-value intra-group transaction involving the transfer of Telecom Operator's tower assets. As a result, the Telecom Operator is now liable to pay taxes amounting to approximately Rs. 22 billion (USD 78 million) on its gain from the transaction. The landmark case focused on 2018 internal asset reorganization, where the Telecom Operator transferred its nationwide tower infrastructure to its wholly owned subsidiary. The disposal of these assets for Rs. 98.5 billion (USD 940 million) by the Telecom Operator was recorded in its financial statements as an accounting gain of approximately Rs. 75.9 billion. However, the Telecom Operator contended that the transaction was not taxable because the asset was disposed of to its wholly owned subsidiary, according to section 97(1) of the Income Tax Ordinance, 2001 (ITO) concerning intra-group transfers. The high court dismissed the petitioner's argument, stating that the provision permits a tax-neutral event only if all conditions of section 97 of the ITO are met. This includes ensuring that the written-down value of the transferred asset remains unchanged in the hands of the transferee compared to the transferor, meaning the transaction should not generate any economic value leading to taxable income. The Court determined that the transaction was conducted at a fair market value of USD 940 million, accepted by the petitioner as consideration, thereby violating section 97 of the ITO. Consequently, the Court concluded that the gain from the transaction was clearly a taxable event since nothing remained to defer taxation to a later date. Additionally, the Court ruled that the Commissioner had the authority to consider accounting income when evaluating taxable income. This remarkable success of the FBR on judicial front is another step toward accomplishment of vision of the Hon'ble Prime Minister for expeditious liquidation of state revenue involved in the cases pending before the various appellate fora. Under the guidance of Rashid Mehmood, Chairman, FBR, Legal Wing of the FBR headed by Mir Badshah Khan Wazir, Member (Legal IR) in association with Director General (Law) has already taken a number of initiatives to actively pursue the pending cases by providing proper assistance to the courts. These collective efforts have resulted in resolution of large number of pending tax disputes at various legal fora involving revenue in billions of rupees. Asma Hamid, ASC, and Dr. Ishtiaq Ahmed Khan (DG Law) effectively represented the Federal Board of Revenue in this case. While dismissing another petition of the same telecom operator filed against a show cause notice issued under the Federal Excise Act, 2005, the court-imposed cost of Rs. 100,000 upon the petitioner to be paid to Deputy Commissioner-IR, LTO, Islamabad within four weeks. Copyright Business Recorder, 2025
Express Tribune
12-06-2025
- Business
- Express Tribune
IHC rules telecom's tower deal taxable
At high tax rates, profit margins for sellers decrease, leaving them with options to pass on the burden to consumers, compromise on the quality of products, evade taxes or find cheaper illicit goods. photo: file A Division Bench of the Islamabad High Court (IHC), led by Justice Babar Sattar, has recently delivered a significant ruling in favour of revenue in a tax reference filed by a major telecom operator. The ruling upholds the powers and jurisdiction of the Federal Board of Revenue (FBR) in assessing tax liability on a high-value intra-group transaction involving the transfer of telecom operator's tower assets. As a result, the telecom operator is now liable to pay taxes amounting to approximately Rs22 billion ($78 million) on its gain from the transaction. The landmark case focused on a 2018 internal asset reorganisation, where the Telecom Operator transferred its nationwide tower infrastructure to its wholly owned subsidiary. The disposal of these assets for Rs98.5b ($940m) by the telecom operator was recorded in its financial statements as an accounting gain of approximately Rs75.9b. However, the telecom operator contended that the transaction was not taxable because the asset was disposed of to its wholly owned subsidiary, according to section 97(1) of the Income Tax Ordinance, 2001 (ITO) concerning intra-group transfers. The IHC dismissed the petitioner's argument, stating that the provision permits a tax-neutral event only if all conditions of section 97 of the ITO are met. This includes ensuring that the written-down value of the transferred asset remains unchanged in the hands of the transferee compared to the transferor, meaning the transaction should not generate any economic value leading to taxable income. The Court determined that the transaction was conducted at a fair market value of USD 940 million, accepted by the petitioner as consideration, thereby violating section 97 of the ITO. Consequently, the court concluded that the gain from the transaction was clearly a taxable event since nothing remained to defer taxation to a later date. Additionally, the Court ruled that the Commissioner had the authority to consider accounting income when evaluating taxable income. This remarkable success of the FBR on judicial front is another step toward accomplishment of vision of the Hon'ble Prime Minister for expeditious liquidation of state revenue involved in the cases pending before the various appellate fora. Under the guidance of Rashid Mehmood, Chairman of the FBR, Legal Wing of the FBR headed by Mir Badshah Khan Wazir, Member (Legal IR) in association with Director General (Law) has already taken a number of initiatives to actively pursue the pending cases by providing proper assistance to the courts.
Business Recorder
08-05-2025
- Politics
- Business Recorder
Number of individuals on ECL: IHC directs FBR to provide statistics
ISLAMABAD: The Islamabad High Court (IHC) on Wednesday directed the Federal Board of Revenue (FBR) to provide statistics of the number of individuals, who have been recommended by it to be placed on the Exit Control List (ECL). A single bench of IHC comprising Justice Babar Sattar issued the directions while hearing a petition moved by a citizen, Abdul Qadir, allegedly implicated in two cases of tax fraud and then, his name was placed on the Exit Control List (ECL), on the Passport Control List (PCL) and on the Provisional National Identification List (PNIL). Counsel for the petitioner stated that according to respondent No 4 (FIA), the name of the petitioner was placed on the aforementioned lists on the recommendation of respondent No 5 (FBR). He stated that the petitioner has been implicated in two cases of sales tax fraud. However, He added that in both of the cases by orders dated 08.08.2024 and 17.10.2024 the petitioner has been acquitted. He stated that notwithstanding the fact that any appeal has been filed or that criminal charges are otherwise being pending adjudication against the petitioner, it is settled law that merely on the basis of allegations of a criminal offence committed by a person, his name cannot be placed on ECL. He maintained that the manner in which the petitioner's name has been placed on the aforementioned lists is tantamount to colourable exercise of authority by the respondents. Justice Sattar wrote in his written order that he had heard the arguments of the counsel for the petitioner as well as the counsel for Federal Board of Revenue (FBR). The court asked the counsel for FBR as to whether there is a policy instrument, which regulates the manner in which recommendations are to be made by the Revenue Division and/or FBR for purposes of Rule 2(1)(d) of the Exit from Pakistan (Control) Rules, 2010 ('Rules'). He sought some time to procure such information. At this, he said, 'Let FBR file a report stating whether or not there is such policy. In such report, let FBR also provide statistics of the number of individuals, who have been recommended to be placed on the Exit Control List (ECL) in exercise of authority under rule 2(1)(d) of the Rules. And further, the number of people, who were actually placed on the ECL by the federal government.' He also directed that the director general of the Directorate General of Immigration and Passports also appeared before the Court and provided his explanation as to why he could not appear when the case was first called. 'Let him also file a report stating the number of citizens he has placed on the ECL since he has assumed office in various categories while identifying the category where expatriate Pakistanis deported from other countries are placed on ECL as a consequence of such deportation,' directed the judge. He said, 'Let him also provide in the report statistics with regard to the number of citizens that have challenged the placement of their names on ECL/PCL or any travel control list and the cases where such actions succeeded and the directions were issued that the names be removed. Let him also state in the report, in the event that he so wishes, as to the consequences that ought to flow to a public official who is found to have placed names of citizens on ECL in breach of the law and the Constitution.' Copyright Business Recorder, 2025
Express Tribune
10-04-2025
- Politics
- Express Tribune
Bench reassignments stir unease in IHC
A fresh controversy has surfaced over bench reconstitution at the Islamabad High Court (IHC), with Justice Mohsin Akhtar Kayani-led larger bench, previously hearing quota-related cases, replaced by a new panel. The former bench also included Justice Babar Sattar and Justice Sardar Ejaz Ishaq Khan and had last held a hearing on March 6, setting April 10 as the next date. According to the IHC website, the new larger bench has been constituted under Acting Chief Justice Sarfraz Dogar and comprises Justice Khadim Hussain Soomro and Justice Inaam Amin Minhas. The latest shuffle is part of a series of bench changes witnessed by the court in recent months. Notably, Justice Sardar Ejaz Ishaq Khan was also hearing a contempt of court case against the superintendent of Adiala Jail for denying meetings with PTI founding chairman Imran Khan. During the hearing, Superintendent Ghafoor Anjum had requested that cases related to Imran Khan's meetings and contempt charges be clubbed together. Acting CJ Dogar subsequently constituted a three-member larger bench and disposed of the cases with instructions. However, Justice Ejaz Ishaq Khan initiated a separate suo motu contempt proceeding that remains ongoing. The Islamabad High Court (IHC) on Wednesday suspended the contempt of court show-cause notices issued to the director general (DG) of Immigration and Passports and a NAB director, while also seeking the complete record of the writ petition and contempt proceedings from the court of Justice Babar Sattar. A two-member bench comprising Acting Chief Justice Sarfraz Dogar and Justice Muhammad Asif issued the suspension order after hearing an appeal filed by the DG Immigration and Passports. The court noted that the objection on the appeal had been removed, and directed that the matter be fixed for hearing on the same day. The contempt notice had earlier been issued by a single bench in connection with a petition seeking the removal of a name from the Exit Control List (ECL). According to the counsel, the court had not just granted interim relief but provided final relief by suspending the order of placing the petitioner's name on the no-fly list. The lawyer contended that the DG of Immigration and Passports had acted on NAB's request and did not arbitrarily include the petitioner's name in the ECL. He argued that the show-cause notice issued to the DG Immigration and Passports was therefore unlawful. The IHC bench observed that the grounds raised in the appeal were worthy of consideration and issued notices to all parties, seeking their responses. It also directed the court office to attach the complete record of the writ petition and contempt proceedings to the appeal file. The original contempt notice had been issued by Justice Babar Sattar over the repeated non-compliance of court orders regarding the removal of the petitioner's name from the no-fly list, allegedly added on the recommendation of NAB.
