Pakistan’s fiscal challenges are often attributed to a narrow tax base, low compliance, and weak documentation.

Yet, an equally critical, underexplored factor lies in the inefficiency of its tax litigation system. The Federal Board of Revenue’s (FBR) litigation framework has increasingly become a bottleneck in revenue realization, delaying recovery, undermining legal certainty, and eroding taxpayer confidence. A modern economy cannot function effectively where disputes linger for years, adjudication lacks consistency, and the State presents conflicting legal positions across courts. At its foundation, taxation is not merely a fiscal instrument; it is a constitutional and public law function. Articles 4 and 10A of the Constitution of Pakistan mandate that all executive actions conform to due process and fairness. Yet, in practice, FBR litigation frequently falls short of these standards. Orders at the adjudication stage under Section 122 of the Income Tax Ordinance, 2001 and Section 11 of the Sales Tax Act, 1990 are often set aside as non-speaking, arbitrary, or legally unsustainable. This reflects a deeper institutional failure: adjudication is often treated as administrative rather than quasi-judicial, lacking independence, legal reasoning, and adherence to evidence.

Challenges in FBR Litigation: Adjudication Stage

The first layer of challenges arises during adjudication. Orders are often mechanical, show-cause notices generic,........

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