Ms Chenab Engineering Works & Foundries Pvt Ltd Vs Federation of Pakistan etc.

Form No.HCJD/C-121

ORDER SHEET

LAHORE HIGH COURT, LAHORE

JUDICIAL DEPARTMENT

I.C.A.No. 4404 of 2021.

M/s Chenab Engineering Works & Foundries (Pvt.) Limited. versus The Federation of Pakistan through Federal Secretary Finance and Revenue Division, Islamabad & others Sr.No. of Date of order/ Order with Signature of Judge, and that of parties or counsel, where necessary. order/ proceedings proceedings

15.09.2025. Mr. Khurram Shahbaz Butt, Advocate for the appellant. Mr. Omer Wahab, Advocate for the appellant in I.C.A.No.923 of 2021.

Mr. Khalil-ur-Rehman, Advocate for the appellant in I.C.A.No.18395, 18401, 18405, 18406 and 18606 of Mr. Rabeel Safdar Tatla, Advocate for the appellants in I.C.A.No.2772, 2773, 2775, 2777, 2779, 2790, 2792, 2796, 2800, 2801, 2803, 2807 and 4715 of 2021. Mr. Khubaib Ahmad, Advocate for the appellant in I.C.As.No.1577, 1579, 1581, 1582, 1583, 1586, 1587, 1589, 1591, 1592, 1595 and 1596 of 2021 M/s Malik Abdullah Raza, Ms. Kausar Perveen, Ali Raza, Waseem Abbas, Ahmed Feroz Lone, Muhammad Nawaz and Muhammad Awais Amin, Advocates/Legal Advisors for the respondent- Department.

Through this single judgment, we propose to dispose of this appeal as well as connected intra-court appeals (Annexure- A) involving common questions of law and facts.

2.This Intra-Court Appeal, under Section 3 of the Law Reforms Ordinance, 1972, has been filed by the appellants challenging the judgment dated 21.12.2020, whereby the learned Single Judge-in-Chambers dismissed W.P. No.52548 of

3.The facts relevant for the adjudication of these appeals, coupled with the contentions raised, are that the appellants are

registered as manufacturer-cum-exporters with RTO, Faisalabad. However, their tax jurisdiction was transferred from RTO, Faisalabad to LTO, Multan by order dated 12.10.2020, passed by the Secretary (IR-Jurisdiction), Federal Board of Revenue. It is the appellants’ case that the said order was passed in excess of jurisdiction. They contend that neither the Income Tax Ordinance, 2001 (“Ordinance, 2001”) nor the Sales Tax Act, 1990 (“Act, 1990”) contain any provision empowering the Board to effect a change in jurisdiction. They argue that such transfer was undertaken not only in violation of the principles of natural justice but also without adherence to due process.

4.The appellants further assert that, within the overall legislative scheme governing tax collection, there is no express provision permitting a change of jurisdiction. Therefore, the respondents were under a legal obligation to facilitate the taxpayers rather than caused inconvenience for them. It is alleged that the change of jurisdiction, especially to a location other than the place of business, caused significant inconvenience and financial hardship, as the appellants were required to submit documentation at the newly assigned LTO, which they claim was both difficult and costly.

5.Additionally, the appellants contend that the transferred jurisdiction is now exercised from a city where neither the registered office nor any branch or factory of the appellants is situated. Hence, they argue, the jurisdictional change is unlawful and contrary to the mandate of law. In support of their contentions, learned counsel for the appellants has primarily relied upon the judgment reported as Messrs Haq Bahu Sugar Mills (Pvt.) Ltd. vs. Federation of Pakistan and others (2016

PTD 955).

6.Conversely, learned Law Officer along with counsel/legal advisors for the respondent-Department opposed

the contentions raised by the appellants and have defended the impugned judgment. While referring to the record, including the para-wise comments, they submit that previously there were only three Large Taxpayer Units (“LTUs”), now re-designated as Large Taxpayer Offices (“LTOs”) located at Islamabad, Karachi, and Lahore. Subsequently, LTO Multan has also been established. They argue that all cases of taxpayers with an annual turnover exceeding Rs.01 billion and revenue contribution of Rs.20 million or more have been assigned to the LTOs.

7.It is further contended that the establishment of LTOs serves the objectives of making the tax system more efficient, responsive to revenue requirements, taxpayer-friendly (especially for large taxpayers), and uniform across geographical boundaries. All four LTOs, they state, are fully functional and, in certain cases, sector-specific. They explained while referring example of the sugar industry, for which LTO, Lahore has been designated in order to streamline audit and compliance functions.

8.Learned Legal Advisor also assert that the formation of LTOs is a product of the Tax Administration Reform Project (“TARP”), initiated in the year 2000 and operational until approximately 2010, during which LTO Multan was part of the original plan. The respondents have categorically denied that the jurisdictional transfer causes any undue hardship, whether financial or otherwise, while emphasizing that most processes are conducted online. In few cases, they submit, the physical submission of documents is required.

9.To justify the jurisdictional transfer, the respondents rely on the provisions of Section 209(8A) of the Ordinance, 2001, read in conjunction with the powers vested to the Federal Board of Revenue under the Federal Board of Revenue Act, 2007 (“FBR Act, 2007”). They maintain that the impugned order

and the judgment under appeal are both legally sound and supported by statutory authority.

10.We have heard learned counsel for the parties and perused the available record.

11.The core issue for determination is confined to whether the Federal Board of Revenue was vested with the lawful authority to transfer the appellants’ tax jurisdiction from RTO Faisalabad to LTO Multan pursuant to the order dated

12.Prior to examining the operative provisions governing jurisdiction, it is pertinent to consider the statutory framework underpinning the establishment of the Federal Board of Revenue’s field formations. Section 3 of the FBR Act, 2007 constitutes the FBR as a statutory body, while Section 4(1)(r) of the Act empowers it “to create field formations of Board for greater efficiency in implementation of fiscal laws and refer to them with appropriate titles.” In exercise of this mandate, the Board established RTOs and LTUs/LTOs, and vested these formations with the responsibility of administering tax laws on both territorial and functional bases.

13.Concurrently, Section 207 of the Ordinance, 2001 delineates the hierarchical structure of income tax authorities, commencing with the Federal Board of Revenue and extending through Chief Commissioners, Commissioners, Commissioners (Appeals), Additional Commissioners, Deputy Commissioners, Assistant Commissioners, Inland Revenue Officers, and such other authorities as may be prescribed. This statutory framework establishes the chain of command for the allocation and exercise of jurisdiction, operating in harmony with the institutional scheme envisaged under the FBR Act, 2007.

14.Having outlined the statutory architecture of the field formations and the hierarchical structure of tax authorities, it is

now necessary to consider the substantive provision governing the conferment and transfer of jurisdiction. Section 209 of the Ordinance, 2001, bearing the heading “Jurisdiction of income- tax authorities,” expressly regulates this domain. In particular, sub-section (8A) thereof empowers the Board, or an authority duly authorized by it, to transfer jurisdiction from one income- tax authority to another.

15.The language of the statute is unequivocal. It confers upon the Board a broad administrative discretion to reassign jurisdiction in the interest of efficient tax administration, institutional coherence, and functional specialization. The use of the phrase “transfer of jurisdiction” in Section 209(8A) of the Ordinance, 2001 must be interpreted purposively and in light of the scheme of the Ordinance, which envisages a dynamic and responsive tax machinery capable of adapting to administrative exigencies.

16.Furthermore, such power is neither contingent upon the consent of the taxpayer nor subject to rigid territorial constraints, particularly where the transfer is intra-departmental and aligns with the lawful objectives of fiscal oversight. The establishment of LTOs, as field formations under the FBR Act, 2007, reinforces the legislative intent to segment tax administration based on taxpayer profile, volume, and complexity rather than mere geography.

17.Accordingly, the impugned reallocation of jurisdiction from RTO Faisalabad to LTO Multan, as affected by the order dated 12.10.2020, finds direct statutory backing under Section 209(8A) of the Ordinance, 2001 and is consistent with the overarching objective of efficient and specialized tax administration. No illegality, ultra vires act, or procedural impropriety has been demonstrated in this regard.

18.The administrative implementation of Section 209 of the Ordinance, 2001 is reflected in a series of jurisdiction orders

issued by the Federal Board of Revenue, whereby classes of taxpayers are allocated to specific field formations, including Large Taxpayer Offices (LTOs). These jurisdictional reassignments, issued expressly “in exercise of powers conferred by Section 209(1),” constitute a routine, lawful, and necessary mechanism for the operationalization of functional, size-based, or sectoral clustering of tax cases, particularly with respect to high-turnover or large-scale taxpayers. The record demonstrates that similar contemporaneous jurisdiction orders were issued across various tax jurisdictions, evidencing a consistent, long standing administrative practice under the statutory framework.

19.The appellants’ contention that the statutory scheme does not envisage the transfer of jurisdiction is untenable in the face of the express language of Section 209(8A), which empowers the Board to transfer jurisdiction from one income-tax authority to another. The interpretation urged by the appellants would render sub-section (8A) redundant, contrary to the settled principles of statutory interpretation, which require that effect be given to every provision of a statute. The harmonized reading of sub-sections (1) and (8A) clearly affirms that the conferment and subsequent reallocation of jurisdiction falls squarely within the Board’s lawful mandate.

20.Moreover, the exercise of jurisdictional reallocation through administrative orders is not ultra vires, provided it is grounded in statutory authority and aimed at achieving efficient tax administration. The Board’s order dated 12.10.2020 was issued in direct exercise of powers conferred under Section 209(1) and (8A), and conforms to both the letter and spirit of the legislative scheme. The mere fact that such transfer may result in logistical inconvenience, increased cost, or the need to furnish documents at a different location does not, in itself, constitute a legal infirmity. It is trite law that administrative

inconvenience or burden cannot override statutory competence. Judicial review does not lie to question administrative decisions taken within the scope of lawful authority merely on the ground of perceived hardship.

21.In absence of manifest arbitrariness and breach of any procedural safeguard, the reallocation of jurisdiction remains a valid exercise of administrative discretion. Therefore, the appellants’ challenge to the jurisdictional transfer stands unsupported by either statutory bar or the precedents.

22.Consequently, the transfer of jurisdiction from RTO Faisalabad to LTO Multan falls squarely within the statutory mandate conferred upon the Federal Board of Revenue and/or its duly authorized delegate under Section 209 of the Ordinance, 2001.

23.The judgment rendered by the learned Single Judge in- Chambers, declining to interfere with the jurisdictional order passed by the Board, reveals no misapplication of law. The conclusion arrived at is well-reasoned and based on a correct interpretation of the scope of jurisdiction exercised by the respondents, in conformity with the settled principles of administrative law. As such, no case is made out for interference in the appellate jurisdiction of this Court.

24.In view of the foregoing analysis, the instant appeal, along with all connected intra-court appeals listed at Annexure- A, stand dismissed as being devoid of merit.

(ABID AZIZ SHEIKH) (MALIK JAVID IQBAL WAINS)

JUDGE JUDGE

Approved for reporting.

JUDGE JUDGE

*USMAN *