ISLAMABAD: The Senate Standing Committee on Finance raised concerns over the Federal Board of Revenue’s (FBR) decision to challenge a ruling by the President of Pakistan regarding a tax case involving MH Traders.
The issue stemmed from a decision by the President in July 2025, which overturned an earlier ruling by the Federal Tax Ombudsman (FTO). The President’s office had sided with MH Traders in a dispute over the misclassification of imported goods, ruling that the items were artificial leather, as declared by the importer, rather than polyester fabric as classified by the FBR.
The Senate committee, chaired by Senator Saleem Mandviwalla, discussed the non-implementation of the President’s order, noting that the FBR had not complied despite the directive being issued by the head of state.
The FBR, in response, explained that it had not challenged the President’s authority but was acting in its role as an appellate authority with quasi-judicial powers.
Zia Basit, Director General Legal at the President’s Secretariat, stated that the orders of the President were absolute and could not be contested by any department or agency. The legal framework clearly asserts that nobody can challenge the President’s decisions, a position that was strongly defended by the Secretariat.
However, the FBR contended that the President’s intervention was unwarranted, given that the FTO had already declined jurisdiction over the matter, and that the Customs Act and associated laws were undermined by such executive interference. FBR officials argued that if traders can bypass adjudication and directly seek relief from the President, it would create significant enforcement issues for the department.
According to the news report, the FBR also disclosed that the dispute had already been taken to the Customs Appellate Tribunal, with MH Traders seeking relief there as well. The department emphasized that the Presidential decision contradicted the FTO’s order, and it was in the process of seeking clarification from the Attorney General of Pakistan.
Senator Mandviwalla suggested that the matter be deferred until the Attorney General’s opinion was received, with the committee awaiting a response before taking further action.
In related discussions, the committee also touched upon the Cabinet Division’s 2016 instructions, which allowed the FBR to challenge orders where the President’s and FTO’s decisions differed. However, the Director General Legal noted that these instructions had been canceled, and fresh directives from the Law Division now prohibited such challenges.
