(a) Survey for Documentation of National Economy Ordinance (XV of 2000)‑‑‑

‑‑‑‑S.3(1)‑‑‑Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.9‑‑‑Signature of an assessee on the Survey Form could not be treated as an agreement‑‑‑In view of the provisions of the Survey for Documentation of the National Economy Ordinance, 2000 the signature of an assessee on the Survey Form could not be treated as an agreement by the assessee‑‑‑Federal Tax Ombudsman observed that where any party objected to the veracity/correctness of the entries trade during third survey, he must file such objection to the relevant Assessing Authority within a reasonable time who may take necessary action as provided by law and where any assessee did not object to the evaluation made by the Survey Team within a reasonable time from the date of decision given by the Federal Tax Ombudsman, such evaluation shall be deemed to be accepted by the assessee‑‑‑Stock‑taking and investigation shall be conducted by the Survey Team selected for the purpose and also representative of trade be associated with this exercise‑‑‑Team shall prepare a comprehensive inspection report with full particulars and details copy of which be supplied to the assessee on the spot.

(b) Sales Tax Act (VII of 1990)‑‑‑

‑‑‑S.19‑‑‑Establishment of Office of Federal‑Tax Ombudsman Ordinance (XXXV of 2000), S. 9‑‑‑C.B.R. Letter No. 1(6)STR/98, dated 18‑7‑2001‑‑‑Compulsory registration‑-‑Survey Team estimated the stock of assessee more than Rs.10,00,000 and obtained his signature on the form‑‑‑In consequence of such evaluation the complainant had been served with a notice requiring it to be enrolled and pay turnover tax at the rate of 2%‑‑‑Complainant/assessee objected that the signature on the Survey Form was obtained by threats and evaluation was unrealistic and incorrect as Income‑tax Authorities had never assessed his sales in exces s of amount estimated by the Survey Team‑‑‑Validity‑‑‑Case being covered by the decision of the Federal Tax Ombudsman in Complaint No.582 of 2001 it was strange that in spite of communication of such order, the Collector had justified the illegal action by referring the instructions of the Central Board of Revenue, dated 19‑7‑2001‑‑‑In. view of such decision Central Board of Revenue had issued circular for its. implementation, therefore, the circular issued earlier stood superseded and cancelled‑‑It was high time that the concerned officers be aware of and keep themselves abreast with the decisions which were delivered by Federal Tax Ombudsman and the superior Courts‑‑‑Federal Tax Ombudsman recommended that evaluation and assessment made by the Survey Team and the signature obtained on it could not be treated as an agreement and binding upon the complainant particularly as it had protested and objected to it; that if the relevant authority recommended for stock‑taking and investigation, it shall be conducted by the Survey Team selected for the purpose and a representative of trade be also associated with such exercise‑‑‑Team shall prepare a comprehensive inspection report with full particulars and details copy of which be supplied to the assessee on the spot and the notice inviting for enrolment issued in pursuance of the survey report be withdrawn.

Nemo for the Complainant.

Dr. Akhtar Hussain, Deputy Collector (Sales Tax), Faisalabad.

DECISION/FINDINGS

The complainant has alleged that during survey of stock the Survey Team estimated the stock of more than Rs.10,00,000 and obtained his signature on the form by threats. According to it the assessment is completely wrong unrealistic and is not the correct evaluation of the stock and business carried out by it. According to it sale is not more than Rs.10,00,000 and the Income Tax Authority has never assessed in excess of this amount. It has been pleaded that as a consequence of this evaluation the complainant has been served with a notice requiring it to be enrolled and pay turnover tax at the rate of 2 %. It has been prayed that as the evaluation is unrealistic and incorrect, the proceedings on the basis of this evaluation may be cancelled.

2. In response to the notice issued to the Secretary, Revenue Division, reply has been filed by Collector dated 10‑10‑2001. It has been pleaded that Muhammad Tahir is the owner of Iqbal & Co., Katra Bota Khan Market, Karkhana Bazar, Faisalabad. On examination it was found that he had been conducting the business of retailer and wholesaler and his annual gross sales has been assessed as Rs.12,50,000 on 17‑9‑2000 by a Survey Team comprising Army Officer, the representatives of Income Tax Department and Sales Tax Department. It has been pleaded and emphasized that the assessee accepted the correctness of the sales which is evident from his signatures available in the relevant column of Survey Forms. It has been further stated that since annual gross sale was admitted by him as Rs.12,50,000, keeping in view the instructions of Board's Letter No.1 (6) STR /98, dated 18‑7‑2001 the department issued Notice No.751 dated 6‑9‑2001 inviting him for registration/enrolment.

3. The facts of the case are disputed to the extent that the complainant alleges that it had signed the Survey Form under coercion and threats. Be that as it may the fact remains that in view of the decision of the Federal Tax Ombudsman in Complaint No.582 of

2001 and similar other complaints it has been decided that in view of the provisions of the Survey for Documentation of Economy Ordinance 2000 the signature of an assessee on the Survey Form cannot be treated as an agreement by the assessee. It was held that where any party objects to the veracity /correctness of the entries made during third survey, he must file such objection to the relevant Assessing Authority within a reasonable time who may take necessary action as provided by law. Where any assessee does not object to the evaluation made by the Survey Team within a reasonable time from the date of decision given by Federal Tax Ombudsman, such evaluation shall be deemed to be accepted by the assessee. It was further held that the stock‑taking and investigation shall be conducted by the Survey Team selected for this purpose and also representative of trade be associated with this exercise. The team shall prepare a comprehensive inspection report with full particulars and details copy of which be supplied to the assessee on the spot. This decision made on 16‑8‑2001 and the C.B.R. accepting it has circulated and notified the Commissioners, Collectors and Officers of the Sales Tax and Customs Department.

4. The present case is covered by the decision referred above. It is strange that in spite of communication of this order the Collector has justified the illegal action by referring the instructions of the C.B.R., dated 18‑7‑2001. In view the referred decision C.B.R. had issued Circular for its implementation, therefore, the Circular issued earlier stood superseded and cancelled. It is high time that the concerned officers be aware of and kept abreast with the decision that are delivered I by this institution and the superior Courts.

5.It is, therefore, recommended that:‑‑‑

(i)Evaluation and assessment made by the Survey Team and the signature obtained on it could not be treated as an agreement and binding upon the complainant particularly as it had protested and objected to it.

(ii)If the relevant authority recommends for stock‑taking and investigation, it shall be conducted by the Survey Team selected for this purpose and a representative of trade be also associated with this exercise. The team shall prepare a comprehensive inspection report with full particulars and details copy of which be supplied to the assessee on the spot.

(iii)Notice inviting for enrolment issued in pursuance of the survey report be withdrawn.

(iv)Compliance to be reported within 30 days of the receipt of the orders.

C.M.A./570/FTO.Order accordingly.