Rebuilding tax justice—V Building the National ...

Summary

• Most significantly for this debate, proposed Article 212A(3) expressly permits Parliament to confer original or appellate jurisdiction over “taxation” and other economic and commercial matters.3 This creates a constitutional opportunity that did not exist when our earliest National Tax Court proposals were written.
• Give constitutional questions to the FCC, substantial non-constitutional tax questions to the Supreme Court through a disciplined leave mechanism, and make the National Tax Court the authoritative specialist forum in between.11 Pakistan does not need another tax reform committee to rediscover these problems.
• On conflicting High Court interpretations of federal tax laws and the need for one national specialist forum, see Towards Broad, Flat, Low-rate and Predictable Taxes, Third Edition.

AI Generated Summary

The first four parts of this series established the case for change. Pakistan’s tax tribunals were created to separate adjudication from collection, but their institutional independence remains incomplete. Appointment structures have invited constitutional challenge. Reserved judgments can outlive statutory deadlines. Weak assessments and mechanical State appeals continue to feed the litigation pipeline. Reform therefore cannot stop at more members, higher salaries, shorter deadlines or better software.1

The final question is structural: what should replace the present fragmented system? Our answer for more than fifteen years has been a National Tax Court. In the third edition of Towards Broad, Flat, Low-rate and Predictable Taxes, the proposal appears as a complete draft National Tax Court Bill, 2025. It envisages a nationwide specialist institution replacing the existing federal tax tribunals, with legal and technical expertise, its own staff, and an appellate structure designed to reduce rather than multiply tiers.2

That proposal should now be updated rather than copied mechanically. Pakistan’s constitutional landscape changed materially in 2025 with creation of the Federal Constitutional Court (FCC). In 2026, the Law and Justice Commission of Pakistan went further by proposing Article 212A for an International Commercial Court of Pakistan (ICCP), a specialised Federal Superior Court. Most significantly for this debate, proposed Article 212A(3) expressly permits Parliament to confer original or appellate jurisdiction over “taxation” and other economic and commercial matters.3

This creates a constitutional opportunity that did not exist when our earliest National Tax Court proposals were written. The Law and Justice Commission’s reasoning is instructive. Complex commercial disputes, it says, require specialised expertise, focused case management, consistency and speed. It considered special benches within existing High Courts but preferred an independent specialised court because that model would provide greater institutional focus, independence and coherent jurisprudence. The same logic applies, with even greater force, to federal taxation.4

Tax disputes are no longer simple arguments over arithmetic. Modern cases involve constitutional legislative competence, banking, transfer pricing, international taxation, treaties, accounting standards, customs valuation, digital transactions, withholding regimes, anti-avoidance rules and complex corporate structures. The institution deciding them must understand both public law and commercial reality.

The National Tax Court should be conceived as a constitutional judicial institution, not another executive tribunal. Its first principle must be independence. Judges should be selected through a constitutionally protected process rather than executive-dominated committees. Tenure and removal must carry judicial safeguards. The Court should control its registry, staff, budget and internal administration. Its expenditure should be charged upon the Federal Consolidated Fund, as proposed for the ICCP. Professional research officers, law clerks and judgment-writing support should be built into the institution from the beginning.5

The second principle must be consolidation. The Appellate Tribunal Inland Revenue and Customs Appellate Tribunal should not survive as parallel national institutions after creation of a National Tax Court. They should become specialised divisions within one court—an Inland Revenue Division and a Customs Division—with larger benches available whenever conflicting interpretations arise.

The third principle must be fewer appellate tiers. Pakistan cannot justify replacing two tribunals with a new court while leaving every existing layer intact. Our longstanding proposal has been a two-tier tax justice system: the first genuinely independent appeal should lie before the specialised national institution, followed only by a limited apex appeal on substantial questions of law.6