H.M. IQBAL & CO., MULTAN VS SECRETARY, REVENUE DIVISION, ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1223 (2005)

Customs Act (IV of 1969)---

----S.37---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Duty drawback on goods used in the manufacture of goods which were exported---Delay in payment of duty drawback---Validity---Application for the claimed amount was submitted in 1987---Rebate should have been paid at least on submission of missing documents which had been submitted earlier also and in August, 1998---Contention of the Department that case was old and that the complainant had failed to supply the documents was not tenable---Case was that of stark maladministration in that the complainant's revised rebate claim filed in 1987 was unduly delayed blocking its capital---Claim was subjected to inattention and indifference and its payment was inordinately delayed---Excepting one or two communications, the rest of complainant's letters/reminders were not responded to---All this amounted to 'maladministration'---Department statedly had now issued the rebate cheque, which the complainant will hopefully receive---Federal Tax Ombudsman recommended that Central Board of Revenue to inquire into the matter to pinpoint the reasons for long delay in settling complainant's rebate claim for appropriate remedial and administrative action and to identify through inspection of Custom House Rebate Section all such long-delayed' rebate/refund claims and direct the competent authority to dispose of delayed claims on merit in accordance with the provisions of law expeditiously.

Muhammad Akbar, Advisor, (Dealing Officer)

Inayat-ur-Rehman for the Complainant.

Fayyaz Rasool, D.C. (Export), Karachi.

DECISION/FINDINGS

JUSTICE (RETD.) MUNIR A. SHEIKH, (FEDERAL TAX OMBUDSMAN).---The complainant after exporting leather shoes in 1982 submitted an application, with all the requisite documents, to the Custom House Karachi on 16-12-1982 for payment of export rebate of Rs.31957. However, supplementary claim of export rebate amounting to Rs.36614 was preferred on 5-7-1987. On 2-8-1995 on department's request, copy of the application with all the requisite documents was again mailed to the Custom House through courier service. Since then he had been reminding the Assistant Collector Rebate Section, Karachi and visiting his office for repayment of Rs.36614 but to no avail. The department had asked it vide letter, dated 22-8-1998 to furnish non-resident account certificate and copy of bank credit advice (BCA) for disposal of outstanding claim, which too were sent. In response to complainant's letter, dated 10-8-2001 the Collectorate informed it vide its letter, dated 20-8-2001 that the Collectorate was processing the drawback claims for issuance of cheque yet the cheque was not issued. On 27-5-2005 the complainant again requested the A.C. for settlement of its claim but the letter also remained un-responded. Delay in issuance of rebate cheque for Rs.36614 amounts to 'maladministration'. As the complainant's claim had been unduly withheld without any reason and the complainant was unnecessarily made to travel to Customs House, Karachi, it was, in addition to payment of its rebate entitled to payment of compensation. The respondents may be directed to make payment of Rs.36614 with 10% compensation.

2. In reply, the respondents have submitted that as complainant's rebate claim was very old they did not have nay record of complainant's communications referred to by it. When the complainant approached the department on 29-4-1998 it was informed that the claim lacked crucial document like the bank credit advice and non-resident account certificate, without which its claim could not be finalized. The required documents were never received in the office. The complainant did not provide a copy of its letter under which it claimed to have filed required documents on 2-5-1998. The department, however, informed the complainant on 20-8-2001 of the status of rebate claim. The Collectorate duly responded to complainant's letter, dated 27-5-2005 vide its letter, dated 2-6-2005. The complainant provided the required duplicate claim along with attested documents vide its letter, dated 14-6-2005. The claim was being processed and verified for its admissibility. It would be decided shortly. Since the complainant had failed to submit the documents in time its claim could not be settled. As such no 'maladministration' was involved on the part of the respondents. The claim being old the record had already been destroyed. However, the claim was being verified/scrutinized in the light of documents supplied by the complainant on 14-6-2005 and the case would be decided shortly.

3. During the hearing, the A.R. reiterated the arguments advanced in the complaint, the claim was first filed on 16-12-1982 together with requisite documents. Subsequently claim for the actual amount involved i.e. Rs.36614 was preferred on 5-7-1987. Reminders issued either by post or registered post or through courier service failed to elicit any response from the respondents. He pleaded that the respondents be directed to pay the amount of rebate claim together with compensation for delayed payment.

4. The D.R. reported that rebate had since been sanctioned on 16-7-2005. He placed a copy of rebate cheque on record. He added that the complainant had revised the amount of original claim upwards from Rs.31957 to Rs.36614 and filed application for the amount involved in the complaint in 1987 as admitted by it vide para 3 of the complaint. He added that the complainant's communications referred to by it were missing from the record of the Collectorate. As crucial documents such as BCA and non-resident account certificate were missing the complainant was asked to supply the same vide letter, dated 22-8-1998 but the complainant supplied those documents only vide its letter, dated 26-4-2005. When asked, the AR confirmed that the complainant had received Customs House's letter, dated 27-8-1998 but submitted that it had already submitted documents vide letter, dated 10-8-1998. The DR added that the claim being very old the file had to be practically reconstructed. Once the claim was complete in all respects rebate was sanctioned. Asked whether the Customs Act provided for any compensation for delayed payment, the AR submitted that no provision to that effect existed in the Customs Act. He confirmed that the bulk of rebate was that of customs duty and sales tax was only marginally involved, the breakup being: customs duty (Rs.36321), sales tax (Rs.393) aggregating Rs.36614. Asked whether the complainant had received the cheque claimed to have been issued by the Customs the AR submitted that it had not yet received it. The DR stated that since it was issued only on 16-7-2005 the complainant would receive it soon. However, he undertook to ensure that the cheque was received by the complainant.

5. The arguments of the parties and record of the case have been considered and examined. The complainant claims that he submitted its application for rebate in 1982. However, as per its own admission in 3 of its complaint the revised claim of rebate for an amount of Rs.36614 was preferred by the complainant on 5-7-1987. Thus practically the first proper rebate application was filed on 5-7-1987. The list of documents appended to this application (shown on the face of application) indicates that while the complainant had attached original bank credit advice it had not appended with the application non-resident account certificate. On 22-8-1998 the Collectorate asked the complainant to furnish non-resident account certificate and the BCA to enable the Collectorate to dispose of its outstanding claims. The complainant contends that it had already submitted these documents vide its letter, dated 10-8-1998. Later acknowledging complainant's letter, dated 10-8-2001 the Customs House vide letter, dated 20-8-2001 assured it that its claim would be processed and sanctioned yet it was not. If even by that time the BCA and non-resident account certificate had not been furnished by the complainant how could the customs house hold out an assurance vide its letter, dated 20-8-2001 that the claim was being processed and the cheque would be issued as early as possible? The actual claim for an amount of Rs.36614 was filed in July, 1987. If any documents were missing or the claim so submitted was not complete the department should have reacted immediately to secure those documents. The department had belatedly asked for certificates vide its letter, dated 22-8-1998. The complainant had submitted copies of the documents vide its letter, dated 10-8-1998 against receipt obtained from the relevant section before issuance of department's letter, dated 22-8-1998 yet the claim was not settled despite assurance given vide letter referred to above. Clearly, there has been an inordinate delay on the part of the respondents. The application for the claimed amount was submitted in 1987. The rebate should have been paid to the complainant at least on submission of missing documents which the complainant claims he had submitted earlier also and in August 1998. The respondents' contention that the case was old and that the complainant had failed to supply the documents is not tenable. Obviously, this is a case of stark `maladministration' in that the complainant's revised rebate claim filed in 1987 was unduly delayed blocking its capital. In fact, the claim was subjected to inattention and indifference and its payment was inordinately delayed. Again, excepting one or two communications, the rest of complainant's letters/reminders were not responded to. All this amounts to `maladministration'. The only redeeming features is that the department has now, issued the rebate cheque, which the complainant will hopefully receive.

6. In view of obvious `maladministration' involved in the case it is recommended that the C.B.R.:

(i) Inquire into the matter to pinpoint the reasons of long delay in settling complainant's rebate claim for appropriate remedial and administrative action.

(ii) Identify through inspection of Custom House Rebate Section all such long-delayed rebate/refund claims and direct the competent authority to dispose of delayed claims on merit in accordance with the provisions of law but expeditiously.

(iii) Compliance be reported within 30 days of the receipt of this order.

C.M.A./544/F. T. O.Order accordingly.