LHC rules IRIS upload alone does not count as legal service

The Lahore High Court has held that uploading an appellate order to the Federal Board of Revenue's Inland Revenue Information System, known as IRIS, does not by itself amount to valid service under the Income Tax Ordinance, 2001, Dawn reported.

A division bench of Justice Mirza Viqas Rauf and Justice Anwaar Hussain gave the decision in three connected reference applications led by a taxpayer named Tahir Mehmood, according to the newspaper's account of the ruling.

The applications challenged three orders of the Appellate Tribunal Inland Revenue. The tribunal had dismissed the taxpayers' appeals as time-barred, on the footing that its orders stood served once they were uploaded to the tax authority's electronic system. The bench held that the upload alone did not meet the ordinance's requirement of service.

The reasoning turns on a distinction between an order being available on a portal and an order being communicated to the party it concerns. IRIS is the FBR's online platform through which taxpayers file returns, receive notices and track proceedings; an order can sit on the system without the taxpayer having been reached in any other way.

Service is what starts the clock on statutory deadlines. A taxpayer's time to challenge an order runs from the date that order is served, and the Appellate Tribunal Inland Revenue hears appeals against orders of the tax department before questions of law reach the High Court. Where an appellate order has been treated as served only because it appeared on IRIS, the ruling gives such taxpayers an argument that the period for appealing never began, and that an appeal dismissed as late was dismissed on a wrong premise.

Dawn's report did not set out the full text of the judgment, the relief granted in the three references, or the bench's reasoning on the remaining grounds raised by the applicants.

The decision is one of several recent Lahore High Court orders on procedural questions in tax and civil litigation. In a separate case, Justice Anwaar Hussain ruled that an offer to settle a civil dispute through a special oath on the Holy Quran, joined to a condition of divorce if the oath proved false, is not a lawful offer, in a civil revision filed by Muhammad Azam Khan. The two matters are unrelated.