2002 P T D 1585

[Federal Tax Ombudsman]

Before Justice (R) Saleem Akhtar, Federal Tax Ombudsman

Messrs IHSAN YOUSUF TEXTILES (PVT.)

LTD., FAISALABAD

versus

SECRETARY, REVENUE DIVISION, ISLAMABAD

Complaint No.57 of 2002.

Sales tax‑‑‑

Refund‑‑‑Input tax‑‑‑Department made out a case for recovery of refund received by the complainant‑company on the ground that refund was claimed on the basis of fake/flying invoices issued by suppliers who did not exist‑‑‑Department submitted before Federal Tax Ombudsman, that on investigation it was discovered that the invoices were issued by the genuine party and had paid sales tax on its supply made to the complainant‑company and further, undertook to vacate the show‑cause notice‑‑‑Case of the complainant

was closed by the Federal Tax Ombudsman for grievance having been redressed.

Abid Shafi, Manager (Taxation) on behalf of the Complainant Company.

Dr. Akhtar Hussain, Deputy Collector, Sales Tax, Faisalabad and Ch. Muhammad Jived, Deputy Collector (Adjudication), Faisalabad for Respondent.

DECISION/FINDINGS

Relevant facts giving rise to the instant complaint are that the complainant, a manufacturer‑cum‑exporter of processed fabrics, cloth made ups registered with the Collector of Sales Tax, Faisalabad under Registration No.4‑4‑5111=005‑64, was allowed refund of input tax on its exports. Subsequently the Collectorate of Sales Tax Faisalabad received intimation from the Collectorate of Sales Tax, Lahore that the complainant‑company had claimed refund on the basis of fake/flying invoices issued by the suppliers, who did not exist. It was alleged that there were mere paper transactions and raw material had not been physically purchased by the complainant Messrs Ihsan Yousuf Textiles Limited. A case was, therefore, made out for recovery of refund received by the complainant Company and referred to the Collectorate of Sales Tax (Adjudication), Faisalabad.

2. The Sales Tax Department claimed that the complainant had received illegal refund of Rs. 2,00,025 on the basis of fake invoices issued by Messrs M. Karam Textiles, Lahore Registered under No:5‑4‑5811‑003‑55 and on the basis of contravention report show‑cause notice was issued by the Deputy Collector (Adjudication) which is still pending.

3. Mr. Abid Shafi Manager (Taxation) of the complainant Company attended on its: behalf, while Dr. Akhtar Hussain, Deputy Collector, Sales Tax, Faisalabad and Ch. Muhammad Javed, Deputy Collector (Adjudication), Faisalabad represented the respondent Department. At the time of hearing the D.R. submitted that on investigation it was discovered that Messrs M. Karam Textile who had issued the Sales Tax invoices was, a genuine party and had paid sales tax on its supply made to the complainant Company. It was further undertaken that the show‑cause notice issued would be vacated.

4. In view of the undertaking given by the D.R., the grievance of the complainant stands redressed. The case is therefore, closed. However, a copy of the letter withdrawing the show‑cause notice sent to the complainant may be submitted to this office within one week of this finding.

C.M.A./M.A.K./237/FTO

Order accordingly.