Messrs HAYAT INDUSTRIES (PVT.) LIMITED, KARACHI VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2004 P T D 133
[Federal Tax Ombudsman]
Before Justice (Retd.) Saleem Akhtar, Federal Tax Ombudsman
Messrs HAYAT INDUSTRIES (PVT.) LIMITED, KARACHI
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No.C-786 of 2003, decided on /01/.
th
July, 2003. Customs Act (IV of 1969)---
----S.35---Sales Tax Act (VII of 1990), S.66---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Duty drawback---Deduction from---Deduction from duty drawback by the Customs Authorities on the wrong instructions of the Sales Tax Department---Claim of such refund---No action on numerous letters of the complainant---Validity---Sales Tax Department gave wrong instructions to the Export Collectorate for deduction in respect of the dues already paid by the complainant---Sales Tax Department neither replied to the letters of the complainant nor issued refund and amounts deducted from their duty drawback claims remained with the Department---Payment had been made when the complaint was filed with the Office of Federal Tax Ombudsman---Such was a clear case of neglect, inattention, inordinate delay and ,inefficiency on the part of the Sales Tax Officials which amounted to maladministration-- Federal 'Tax Ombudsman recommended that Central Board of Revenue may institute an inquiry to identify the reasons for ordering deduction when the payment had been promptly made by the complainant; ascertain the circumstances under which no action was taken on their letters requesting and reminding for payment and take suitable action against the officials responsible for maladministration.
Sheikh Shaukat Hayat, Director.
Feroze A. Junejo, Deputy Collector of Customs (Exports).
Dr. Abdul Rehman Rind, Assistant Collector of Sales Tax (East).
FINDIGNS/DECISION
The complaint has been filed against the Sales Tax Collectorate (East), Karachi, for not refunding the amount wrongfully deducted from their duty drawback claims. The complainants have stated that on, receipt of a notice dated 27-5-1998 for recovery of Rs.63,709 from the Assistant Collector, Division-II, Sales Tax (East), Karachi, they deposited the amount on 30-5-1998 and informed the Assistant Collector vide a registered letter dated 1-6-1998. In spite of this payment, the Sales Tax Department started the recovery proceedings and, under their instructions, the Customs Department recovered Rs.99,737 from their two duty drawback claims in December, 1998 and January, 1999.
2. The complainants stated that they wrote letters dated 9-8-2000, 30-8-2000, 19-12-2000, 26-9-2001, 27-11-2001, 6-12-2001, 8-2-2002 and 9-10-2002 etc. requesting and reminding the Department to the amount which had been recovered on their instructions did not receive any reply to their letters nor the amount was refunded to them. They have requested this office for help to get the refund.
3. The Additional Collector of Customs (Exports) replied to the complaint that the Collector of Sales Tax (East), Karachi, had informed that they had refunded Rs.82,362 and the remaining amount of Rs.17,372 would be paid shortly.
4. Mr. Shaukat Hayat, Director, reiterated during the hearing of the complaint that the payment of Rs.63,709 was made immediately on receipt of the notice dated 27-5-1998 under intimation to the Assistant Collector. In spite of this payment, the Treasury Officer, Karachi Customs House, deducted Rs.17,375 on 9-12-1998 and Rs. 82,362 on 7-1-1999 from their sanctioned duty drawback claims. They wrote several letters to the Collector of Sales Tax but received no response. After filing of this complaint they have received cheque 30-6-2003 for Rs.82,362 dated 30-6-2003 from the Sales Tax Collectorate but the amount of Rs.17,375 was still outstanding.
5. The Deputy Collector of Customs (Exports), stated that the Collector of Sales Tax (East), Karachi, had intimated vide letter dated 27-11-1998 that an amount of Rs.5,20,962 outstanding against the complainants be recovered from them. The recovery was, therefore, made and forwarded to the Sales Tax Department. Subsequently when the complainants informed the Export Collectorate that the deduction was not justified, the matter was intimated to the. Sales Tax Authorities but no reply was received.
7. The Assistant Collector of Sales Tax (East), Karachi, was not able to explain the circumstances under which no action was taken on the numerous letters of the complainants as well as the Exports Collectorate for refund of the amounts deducted to 1998 and 1999. He informed that remaining amount of Rs.17,375 has also been sent vide cheque dated 5-7-2003.
7. From the facts stated above, it is clear that the Sales Tax Department gave wrong instructions to the Export Collectorate for deduction in respect of the dues already paid by the complainants. They wrote several letters to the Sales Tax Department but did not receive any reply or the refund and the amounts deducted from their duty drawback claims in December, 1998 and January, 1999 unlawfully remained with Department. The payment has now been made when the complaint was filed with this office. It is a clear case of neglect inattention, inordinate delay and inefficiency on the part of the sales tax officials which amounts to maladministration as defined under section (2) of Ordinance No. XXXV of 2000.
8. It is recommended that C.B.R.---(i) may institute an inquiry to identify the reasons for ordering deduction when the payment had been promptly made by the complainants;
(ii)ascertain the circumstances under which no action was taken on their letters requesting and reminding for payment: and
(iii)take suitable action against the officials responsible for maladministration.
(iv)compliance be reported within forty-five days.
C.M.A./895/FTOOrder accordingly