GHULAM RASOOL VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2003 P T D 2775
[Federal Tax Ombudsman]
Before Justice (Retd.) Saleem Akthar, Federal Tax Ombudsman
GHULAM RASOOL
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.864 of 2002, decided on 12/11/2002.
Sales Tax Act (VII of 1990)‑‑‑
‑‑----S. 25‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)‑‑‑Access to record, documents, etc. ‑‑‑Inclusion of complainant/assessee's name in the list of suspected units Without notice‑‑‑Validity‑‑‑Department had not been able to establish that the complainant/assessee was requested to produce certain documents for audit; as no copy of the notice to such effect was produced duly served on him‑‑‑Neither intimation to the complainant/ assessee was given about the inclusion of his name in the suspected units nor any reply was given to the complainant/ assessee's letters offering record for audit‑‑‑Where any action was taken affecting the right of a party an opportunity of being heard should be afforded to him‑‑ Proceedings taken or order passed in violation of principles of natural justice was a nullity and void‑‑‑Department issued a notice under S.25 of the Sales Tax Act, 1990 after filing the complaint by the complainant/ assessee‑‑‑ Maladministration had been proved on the part of the Department as the name of complainant/assessee's unit was included in this list of suspected units without any valid basis‑‑‑In spite of complainant's cooperation and voluntary offer for audit, the Department did not response to evaluate and rectify its illegal action of including the complainant's unit in the list of suspected units‑‑‑Such actions which adversely affect the business, reputation and. credibility should be taken after due notice to the party and after making proper investigation‑‑ Federal Tax Ombudsman recommended that the name of the complainant/assessee's unit be deleted from the list of suspected units forthwith and the Member (Sales Tax), Central Board of Revenue to issue advice to all concerned officers that a show‑cause notice must be given to all the units before notifying thus as suspected before publication/circulating such list.
Muhammad Bashir Malik and Mazahar Hussain Shah for the Complainant.
Moin‑ud‑Din Ahmad, Assistant Collector (H.Q.), Collectorate of Sales Tax, Faisalabad for Respondent.
FINDINGS/DECISION
Maladministration is alleged in the instant complaint against the Sales Tax Collectorate, Faisalabad for notifying the name of Messrs Ghulam Rasool Weaving Factory alongwith two hundred others among the units suspected to be registered on fake grounds.
2. Briefly, the facts were that the complainant, sole proprietor is operating a cloth weaving unit consisting of 12 power loans, was duly registered, as a manufacturer under the Sales Tax Act, 1990 since March 9, 2001. Monthly Sales Tax Return were being filed regularly. However, in March, 2002 a list of 200 registered units suspected to be fake was published in "Daily Jang" that included the name of complainant's unit as well.
3. It was alleged that neither any prior notice was served nor any valid reason was offered subsequently for the impugned action the complainant requested Collector vide letter, dated 27‑5-2002 to delete the name of his unit from the suspected units. Complainant voluntarily offered on 26‑6‑2002 to be audited for verifying the genuineness of the registered person.
4. It was further alleged that the units were declared fake on any of following three basis which are as under:‑‑
(a)Computer Profile;
(b)Fake invoices;
(c)Physical Verification;
And in the complainant's case none of the above was involved.
5. It was therefore, alleged that the inclusion of the complainant's unit name in suspected units list and delay caused by all concerned officials of Sales Tax Collectorate, Faisalabad amounted to neglect, inattention, incompetence, inefficiency, and inaptitude in the discharge of duties and responsibilities. Consequently, the unit suffered heavy loss of business.
6. In reply it was pleaded that the name of the unit was included in the list of suspected units on the basis of physical survey conducted by the Collectorate and report of the survey team which could not trace out the business premises of the registered person. It was further submitted that the said list was circulated to various chambers and trade bodies and was not supplied to the press. When the complainant approached the Collectorate after 7 months i.e. on 27‑5‑2002 he was requested to provide the sales tax records for audit so that the decision regarding deletion of his name from the list of suspected units could be taken but complainant failed to provide the same. Audit of the complainant's unit is in progress and immediately on receipt of report of the audit team complainant's application of deletion will be disposed of.
7. The learned representative of the Department contended that the survey team had conduct physical verification of the complainant's unit on the address of the complainant which is "Chak No. 189" but it was not traceable. The learned Advocate for the complainant contended that the Unit was registered by the Department with the address as Chak 188. It was further contended that Chak No. 189 has been merged with Chak No. 188 and Chak No. 189 does not exist. This contention of the Department exposes its inaptitude and negligence in discharge of duties. The complainants address in the Sales Tax Registration record is Chak No. 188 on which he receives all notices from the Tax Department. There is no change in the address of the business premises of the complainant. He has produced Income Tal notices which were received by the complainant on the same address. It clearly establishes that the inquiry by the Department was a sham inquiry.
8. The DCST (Refund) has not been able to establish that the complainant was requested to produce certain documents for audit, as no copy of notice to this effect was produced duly served on him. It is also clear that no intimation to the complainant was given about the inclusion of his name in the suspected units. Neither any reply was given to the complainant's letters, dated 27th May and 26th June, 2002 nor any action was taken. Where any action is taken affecting the right of a party an opportunity of being heard should be afforded to him. Any proceeding taken or order passed in violation of principles of natural justice is nullity and void.
9. However, after the complainant 'approached this office, the Department issued a notice under section 25 of Sales Tax Act for production of certain documents for audit. Consequently the complainant produced the records for audit which is in progress.
10. The maladministration has been proved on the part of the Department as the name of complainant's unit was included in the list of suspected units without any valid basis. In spite of complainant's cooperation. and voluntary offer for audit, the Department did not response to evaluate and rectify its illegal action of including the complainant's unit in the list of suspected units. Such actions which adversely affect the business, reputation and credibility should be taken after due notice to the party and after making proper investigation.
12.It is recommended that
(i)The name of the Complainant's unit be deleted from the list of suspected units forthwith.
(ii)The Member (Sales Tax), C.B.R. to issue advice to all concerned officers that a show‑cause notice must be given to all the units being notifying as suspected before publication/ circulating such list.
(iii)Compliance be reported within 15 days.
C.M.A./858/FTOOrder accordingly.