Islamabad, July 26, 2025 – The Federal Board of Revenue (FBR) has suffered a legal setback as the Supreme Court of Pakistan dismissed its petition in a high-profile input tax adjustment case, reinforcing the importance of substantiated tax enforcement actions. The Supreme Court, comprising Justice Munib Akhtar and Justice Aqeel Ahmed Abbasi, delivered its ruling on June 30, 2025, in the case titled Commissioner Inland Revenue vs. M/s Mustafa Enterprises and another. The apex court dismissed the FBR’s appeal against the Lahore High Court’s earlier judgment, stating that no substantial question of law had arisen from the case. The court found that the show cause notice issued to the respondents was vague and lacked material evidence. The FBR had alleged that Mustafa Enterprises claimed inadmissible input tax of Rs. 55 million based on fake or “flying” invoices. However, the Supreme Court observed that no proof was presented to establish that the suppliers were black-listed during the relevant tax period. The case originated from an audit of tax returns for the period July 2019 to June 2020. The Assistant Commissioner had imposed a…