RAWALPINDI: The Lahore High Court (LHC) Rawalpindi bench on Monday ordered the federal government to establish an alternate dispute resolution (ADR) committee for the settlement of tax-related issues of the National Logistics Cell (NLC).

LHC Justice Jawad Hassan issued the direction on the petition of the NLC and restrained the Federal Board of Revenue (FBR) from taking any adverse action against it.

At the outset, the NLC counsel submitted that this was a second writ petition filed by the logistics cell on tax dispute. He explained that in the earlier petition the court remitted the matter to the FBR with a direction to resolve the issue after providing proper hearing to all concerned, including the NLC.

The counsel argued that following the aforesaid direction of this court, the petitioner approached the FBR as the committee of the alternative dispute resolution had not been established so far.

He next argued that after the amendment to the Income Tax Ordinance, 2001 by insertion of Section 134A(1) through Finance Act, 2023, which mentioned procedure regarding the ADR, it was mandatory for the board to establish a committee for resolution of any dispute through mediation but the same had not been formed thus far, hence, the NLC again knocked the door of this court.

Justice Hassan observed that the ADR was the result of landmark pronouncements of the Supreme Court on the issue of mediation.

Recently, the LHC has also expanded scope of the mediation in the case of Strategic Plans Division and another versus Punjab Revenue Authority and others, in which the court, while dealing with an issue under the Punjab Sales Tax on Services Act, 2012, discussed in detail the anthology of the ADR by highlighting its importance.

He noted that the development of ADR in Pakistan had been influenced by the need to alleviate the overburdened judicial system which aimed to provide more efficient, cost-effective and amicable dispute resolution alternatives, reducing the burden on courts and improving access to justice for the public.

Subsequently, the court disposed of the petition directing the federal government to establish the necessary committee of the ADR as per provisions of Section 134A(1) of the Ordinance on immediate basis so that the litigant may not suffer and the tendency of overburdening the court with unnecessary litigation may also curtail.

Meanwhile, since the ADR committee has so far not been established and the petitioner has no forum to get the dispute resolved by way of mediation, the court directed that no coercive measures shall be taken against it, till establishment of the committee.

Published in Dawn, September 17th, 2024