FTO: Challenges and remedies

Judicial review is a method to shield administrative justice but it is not the only way. The other way is non-court-based mechanism, commonly known as Alternate Dispute Resolution, which seeks to secure administrative justice for individuals by providing redress when things go wrong and to promote good governance by enabling lessons to be learned from the past mistakes. General understanding with respect to the concept of “Ombudsman” means literally a “Complaints Man” and this is an independent body that investigates complaints of maladministration against public institutions.

In 1644, John Milton wrote, “when complaints are freely heard, deeply considered and speedily reformed, then is the utmost bound of civil liberty attained, that wise men look for”. More recently, Bernard Jenkin MP, the Chair of Commons Public Administration Select Committee has noted, “the need for public complaints to be heard is both chronic and urgent”.

Conceptually, the Ombudsman divulges three basic themes.

i. Ombudsman constitutes an important mechanism by which the executive can be held accountable.

ii. Legal enforceability of Ombudsman’s findings and decisions.

iii. The relationship between Ombudsman and other accountability mechanism.

The purpose of this paper is to explain

i. What Ombudsman does?

ii. Why and how he/she does it?

Broadly speaking, it is said that:

i. the Ombudsman exists to investigate complaints of maladministration;

ii. secure redress for injustice occasioned; and

iii. identify the underlying reasons for maladministration;

iv. to learn appropriate lessons from the faults and follies; and

v. to adapt a mechanism which may;

(a) avoids the formality;

(b) cost; and

(c) legalism associated with court proceedings.

The above noted points have been extracted from the well-known case of “debt of honour’s case” decided by the parliamentary Ombudsmen of the UK. Analytically speaking, this decision highlights that:

First, the Ombudsman found that maladministration had occurred even though the court held the government’s conduct to be lawful. This shows that the concept of good administration employed by Ombudsman is a broader one than which is enforced by the courts through judicial review, ie, a government decision may be lawful, but nonetheless result in maladministration.

Second, the Ombudsman’s recommendations were concerned not only with the case of the complainant and the circumstances of similarly situated individuals, but also with the general way in which government should implement compensation schemes. The Ombudsman in this case held that in the future, due regard should be given to all relevant issues, eg, eligibility criteria before any announcements are made and once announced, any subsequent changes should be publicized and explained. This demonstrates that Ombudsman’s concerned not only with remedying injustice in individual cases, but also with identifying general administrative deficiencies and disseminating good practice to prevent their recurrence.

Third, the fact that the government refused to implement the Ombudsman’s key recommendations and that the Ombudsman’s only recourse was by way of drawing parliament’s attention to that fact, highlight the legally non-binding nature of ombudsman’s recommendations and the general principle that ombudsman form part of the political, not legal, system for securing good government.

Broadly speaking, there are two models with respect to the role of the ombudsmen to redress the maladministration occasioned.

First model speaks that the principal role of Ombudsman is to secure compensation for individuals, who suffer because of maladministration. In this model, the focus is on dealing with individual’s grievances, getting public institutions to redress the grievances and to put thing right.

Second model is in contrast with first model, requires that Ombudsman should concentrate on broader systemic issues, trying to understand why things have gone wrong and identifying how things should be done differently to avoid a repetition of the past mistakes.

It is indicated that second model is forward-looking, focusing to improve the future quality of administration.

In view of the above matter, Ombudsmanry also become an important mechanism for:

i. holding government accountable;

ii. capable of laying bare the nature and causes of systemic failures; and

iii. enabling stakeholders, the public, politicians and media, to make informed judgments about the quality of public administration and the competence of those responsible for it.

In this writer’s view, both the models have their own peculiar significance, as they are helpful to assist in understanding the range of things that ombudsman may do, but they are not exclusive of each other. In reality, many ombudsmen seek to combine the two models. Indeed, this is not impossible or even difficult, because they are, to a large extent, complementary. By investigating large numbers of individual complaints, ombudsmen build up a wealth of experience that helps him understand, why things go wrong? And to make constructive suggestions about how existing administrative systems and policies can be improved.

It depends completely on the Ombudsman’s adopted philosophy that there should be a diverse product range and that the serious, heavyweight, statutory/policy investigation should not be the core product. He/she should adopt an approach to a model that allows a balance between redressing substantial numbers of grievances, while undertaking detailed investigations into matters of broader significance.

While looking minutely at the Constitutional Vista of Ombudsman, two sets of questions arise:

i. how does the jurisdiction of the Ombudsman relates to those of courts and tribunals? And more broadly;

ii. how does the role of Ombudsman compare with that of courts and tribunals?

There is certainly an overlap between the types of complaints that may be investigated by the Ombudsman and those that can be subjected to judicial review, but the two mechanisms differ markedly in many respects. Firstly, the ombudsman generally applied a broader concept of good administration than the courts such as the Ombudsman is able to deal with the allegations of -rudeness, delay, general incompetence that may not rob an administrative act of legality.

Secondly, in contrast to making a claim for judicial review, complaining to the Ombudsman costs nothing.

Thirdly, the Ombudsman’s approach is very different from that of the administrative court. The Ombudsman adopts an inquisitorial style and differs radically from the adversarial approach of the court proceedings and whereas the administrative court is rarely willing or able to resolve dispute of facts, conversely, the Ombudsman readily and expertly does so.

Fourthly, the Ombudsman is able to take a broader view, whereas the courts and tribunals are primarily concerned with resolving the disputes, the Ombudsman can step back with a view to identifying systemic failures and identifying how administrative practice should be improved.

It may be pertinent to highlight the three legal procedures adopted universally by the courts/tribunals: i. Inquisitorial – of a trial or legal procedure, characterized by the judge performing and examining role.

ii. Accusatorial – of a trial or legal procedure, involving accusation by the a prosecutor and a verdict reached by an impartial judge or jury.

iii. Adversarial – of a trial or a legal procedure – in which the parties in a dispute have the responsibility for finding and presenting evidence.

The whole structure and role of the Ombudsman is based on the concept of maladministration in the public sector institutions. The implication is that maladministration is concerned with the decision-making process, not with the substantive merits of administrative acts and decisions. This distinction is a familiar one in administrative law, but one that is difficult, if not impossible, to draw clearly. But across the countries of the world, the concept of maladministration is covered by bias, neglect, inattention, delay, incompetence, inaptitude, perversity, turpitude, arbitrariness and so on. In the recent past, administrative failures, eg, rudeness, unwillingness to treat a complainant as a person with rights, knowingly giving misleading or inadequate advice, offering no redress or manifestly disproportionate redress, faulty procedures, failure to monitor compliance with adequate procedures, cavalier disregard of guidance designed to ensure equitable treatment, and failure to mitigate the effects of rigid adherence to the letter of law that produces unequal treatment.

Ann Abraham a former ombudsman of the UK and architect of “Ombudsman’s principles of good administration” has explained, if the ombudsman is to develop a compelling vision for the future, then it must build on such foundations of principles and take seriously the aspiration of establishing a form of “Ombudsprudence” that is intellectually compelling and pragmatic, and capable of satisfying at both theoretical and practical levels. The principles are:-

i) Getting it right;

ii) Being customer focused;

iii) Being open and accountable;

iv) Acting fairly and proportionately;

v) Putting things right; and

vi) Seeking continuous improvement.

While reading the above noted principles, a very significant question arises: can Ombudsman really make a difference? A precise answer to this question is if he/she is effective, two essential requirements must be met. First, Ombudsman must be able to conduct the investigations in an effective manner, meaning thereby among other things, that he/she must be able to get answers to questions, access to relevant documentation etc. Second, when he/she finds injustice occasioned by maladministration and accordingly make recommendations, the responsible public institution must be in some sense required to accept and act on such findings in letter and spirit. The extent to which these two criteria are met by the Ombudsman.

With the afore-cited background, one would try to examine the Pakistani scenario, being main focus on Federal Tax Ombudsman (FTO) only. The concept of FTO was introduced in Pakistan through Notification No. F.2(1)/200-Pub, Islamabad, dated 11.08.2000 vide Ordinance No. XXXV of 2000 and FTO Investigation and Disposal of Complaints Regulations, 2001 were promulgated in exercise of the powers conferred by sub-section 11 of section 10 of the Establishment of the Office of FTO Ordinance, 2000. Furthermore, through Presidential Ordinance (Ordinance I of 2013) dated 12.02.2013 promulgated institutional reforms for standardizing and harmonizing the law relating to Federal Ombudsmen Institutions and matter ancillary or akin thereto. The president of Pakistan has given assent on 20.03.2013 and it became Act No. XIV of 2013.

The minute study of above cited Acts arises many queries with respect to functionality and role of FTO in redressing the grievances regarding the maladministration of the individuals. To what extent the FTO has been successful in bringing changes in the systemic failure or deficiency and how much he succeeded to redress the grievances of the business community/taxpayers, regarding the maladministration. Is the functions and role of FTO are compatible with the international best practices? While studying the FTO’s mechanism practiced in Pakistan by way of afore-cited acts and rules, one come across many queries, which require appropriate answers to understand the mechanism in its true spirit. These queries are enumerated as below:

As to whether:-

i) Is FTO successfully held the executive (FBR) accountable?

ii) Historically three known models are implemented in the functionality of the FTO, these are:-

a) Former Justice Saleem Akhtar Model;

b) Shoaib Suddle IGP (R) Model; and

c) Abdul Rauf Chaudhry Secretary (R) Model.

There is a need to study which model is most suitable/appropriate to improve the good governance in the tax system?

iii) What is the impact of provisions of section 10, 11, 12 and 18 of Institutional Reforms Act, 2013 on prevailing legal system and Constitutionalism of the Country?

iv) Is FTO’s findings and recommendations are respected and implemented as legally binding decisions?

v) Is the existing system of advisors to FTO have intellectual and academic capabilities to appropriately investigate the allegations levelled in the complaints and redress the grievances?

vi) Which legal procedure (Inquisitorial-Accusatorial-Adversarial) is more suitable to the FTO’s mechanism for the disposal of the Complaints? And what is its impact on the existing complaints handling system?

vii) Is FTO adhering to Ann Abraham’s “Principles of Good Administration” in letter & spirit?

viii) Is FBR has capacity to learn lessons from the findings and recommendations of the FTO to redress the systemic failuresand deficiencies?

ix) Why appeal against the findings, recommendations, decisions and orders of the FTO, lies to the President of Pakistan? Is it not permitting executive to act as a judge in its own cause?

x) FTO’s relationship with the other accountability mechanism and Courts/Tribunals are helpful to him?

xi) Many other issues such as drafting faults and conceptual errors etc. which need a concerted attention and consideration to make the system/mechanism more viable.

As all the above queries are complicated and time-consuming; it requires a detailed research work and study to highlight the systemic failures besides appropriate recommendations for putting things straight with a view to helping all the stakeholders, especially the Ombudsman, FBR and more specifically the business community and taxpayers.

(The writer is a former Member of Federal Board of Revenue and Punjab Public Service Commission)