LAHORE: The Lahore High Court (LHC) has restrained the Federal Board of Revenue (FBR) from taking coercive action against the Multan Electric Power Company to recover more than Rs4.53 billion in disputed back taxes, granting the utility interim relief while the matter proceeds.
A two-judge bench comprising Justice Jawad Hassan and Justice Abid Hussain Chattha issued the order while hearing a petition filed by Mepco against FBR orders dated Aug 5 and Sept 7, 2026. The orders had demanded payment of the amount under Section 140(1) of the Income Tax Ordinance, 2001, covering tax years 2018–2022 and 2023–2024.
Mepco’s counsel, Muhammad Ali Siddiqui, Fatima Safeer and S.M. Kumail Haider Naqvi told the court that the company had not bypassed the mandatory Alternative Dispute Resolution process. They argued that the ADR committee had heard the case but failed to conclusively resolve the central issue of which minimum tax rate should apply.
Responding to the bench’s concerns over the petition’s maintainability, Mepco’s lawyers cited Section 134A of the ordinance, which lays down a separate mechanism for state-owned enterprises.
Under this provision, a committee must be constituted within 15 days, and if it fails to reach a decision within that period, the law provides a specific appellate route.
The bench issued notices to the FBR and other respondents, directing them to submit replies, and sought assistance from the attorney general for Pakistan. It also granted Mepco interim relief, barring the FBR from taking coercive measures against the company for the duration of the petition’s pendency.
