HYUNDAI GUJRANWALA MOTORS (PVT.) LTD. VS SECRETARY REVENUE DIVISION; ISLAMABAD, 2008 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 1726 (2006)

Sales Tax Act (VII of 1990)---

----S.14---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)---Registration---Delay in issuance of registration certificate---Department. alloted computer number but failed to issue the requisite registration certificate as data relevant to registration had not been fed into the computer by the Registration Office nor it was transferred to Central Registration Office for issuance of registration certificate---Validity---Very purpose for which the system appears to have been devised was being frustrated by tardy feeding of data and its transfer to the central registry---Undue delay had occurred due to failure to feed and transfer the relevant data to the central registry, despite complainant's requests for issuance of registration certificate---Maladministration was established---Department should complete its inquiry for appropriate disciplinary action against those found responsible for causing delay in issuance of registration certificate to the complainant---Federal Tax Ombudsman recommended that Revenue Division should direct the competent authority to establish a system of inspections binding the senior officers to periodically check and monitor the working of local as well as central registries engaged in the task of processing applications for registration and issuance of registration certificates so as to eliminate snags and delays occurring in issuance of certificates of registration applied for by the assessee.

Muhammad Akbar (Advisor) Dealing Officer.

Nemo for the Complainant.

Syed Faisal Bukhari, D.C., Gujranwala for Respondent.

DECISION/FINDINGS

JUSTICE (RETD.) MUNIR A. SHEIKH, (FEDERAL TAX OMBUDSMAN).---Facts of the complaint are that the complainant had applied for sales tax registration to the Local Registration Office, Gujranwala on 21-4-2005. Although the respondents had allotted it a computer number on 21-4-2005 they failed to issue the requisite registration certificate. On contacting the Central Registration Office, Islamabad the complainant learnt that the data relevant to complainant's registration had not been fed into the computer by Gujranwala Registration Office nor was it transferred to the Central Registration Office, Islamabad for issuance of registration certificate. Subsequently, the complainant approached the Local Registration Office, Gujranwala to ascertain the status of its application. The local office informed it that the relevant data had been communicated to the Central Registration Office, Islamabad. Yet, as per the version of Islamabad Registration Office only computer number had been allotted without feeding relevant data into the system. The matter may be investigated for taking action against the person responsible for causing delay in issuance of registration certificate. The complainant may also be allowed the input tax paid by it from the date of application, as required under law.

2. In reply, the Collector of Sales Tax and Federal Excise, Gujranwala has submitted that the complainant had applied for new sales tax registration. As per the existing procedure, the requisite information contained in Form ST-1 was fed in the software of Local Registration Office by Data Entry Operator and a computer number was generated on 21-4-2005. The information was transferred to Central Registration Office, Islamabad for further processing and issuance of new sales tax registration certificate. However, subsequent scrutiny of data revealed that the Data Entry Operator had not fed the requisite information in the computer software of Local Registration Office; hence the same could not be transmitted to the Central. Registration Office, Islamabad. The cause of non-feeding of data in the software by Data Entry Operator was being investigated. The outcome of the investigation would be submitted as soon as the same was completed. The information was subsequently transmitted to the Central Registration Office, Islamabad on 16-11-2005. The Central Registration Office had asked Gujranwala office to verify complainant's manufacturing facility, which was verified by the Auditor on 17-11-2005 and the C.B.R. was informed accordingly on 18-11-2005. The registration certificate would be issued to the complainant in due course of time. The input paid by the complainant after the date of filing of application for registration would be admissible to it under law.

3. No body turned up on behalf of the complainant despite two call notices notifying hearings on 16-12-2005 and 29-12-2005. The DR representing the department submitted that registration certificate had since been issued to the complainant by the CBR and placed a copy thereof on record. He explained that the computer number was allotted on 21-4-2005 and the data was transferred from the Gujranwala Registration Office to the CBR and the CBR confirmed that the same was received by it on 16-11-2005. As there was a delayed transfer of data by the Gujranwala Registration Office to 'the Central Registry, the DR who was asked to indicate the action being taken against those responsible for not feeding the data in the computer and for causing delay in transferring the same leading to delayed issuance of registration certificate, submitted that the explanation of the concerned UDC was called vide Assistant Collector's letter dated 30-11-2005. He had submitted his explanation, which was under examination. The department would take action against those found responsible for causing inordinate delay.

4. Although the complainant or its representative did not turn up at any of the two hearings notified by this office, but the complainant vide its letter, received here on 29-12-2005, has, while confirming that sales tax registration office had issued sales tax registration certificate on 14-12-2005, after a lapse of about seven months, reiterated that the Secretary Revenue Division be asked to take serious action against the person responsible for causing delay iii issuance of sales tax registration certificate.

5. The arguments of the DR and the records of the case have been considered and examined. Clearly, there has been delay in issuance of complainant's sales tax registration certificate, basically because the requisite data relating to the complainant's registration was not transferred by the Gujranwala Office to the Central Registration Office, Islamabad. It is evident that the Government must have computerized and streamlined the system of processing of registration applications so as to issue registration certificates promptly. The present case shows that the very purpose for which the system appears to have been devised is being frustrated by tardy feeding of data and its transfer to the central registry. It is noted that in the complainant's case an undue delay has occurred due to failure to feed and transfer the relevant data to the central registry, despite complainant's requests for issuance of registration certificate. `Maladministration' is established. As reported vide parawise comments filed by the respondents the department has already initiated an inquiry to pinpoint the responsibility for delay. Reportedly, it has already obtained the explanation of the concerned UDC, which is under examination. It is expected that the department will take appropriate action against those found responsible for dereliction of duty. Since, however, the registration certificate has already been issued---the complainant has acknowledged it, the department needs to finalize its inquiry for action against officials responsible for causing delay in processing complainant's registration application and issuance of registration certificate. It is also imperative that the senior officers of the Collectorate and those in the central registry should periodically inspect the working of local and the central registries to ensure timely feeding of data into the computer and its prompt transfer to the central registry, without delay, so that, subject to fulfilment of conditions laid down in law, the concerned registration offices process applications for registration and issue registration certificates without delay. Periodical inspections will help the department to achieve the purpose for which processing of registration applications and issuance of registration certificates were automated. While the department should complete its inquiry for appropriate disciplinary action against those found responsible for causing delay in the issuance of registration certificate to the complainant, it is recommended that the revenue division direct the competent authority to:

(i) Establish a system of inspections binding the senior officers to periodically check and monitor the working of local as well as central registries engaged in the task of processing applications for registration and issuance of registration certificates so as to eliminate snags and delays occurring in issuance of certificates of registration applied for by the assessee.

(ii) Compliance report be submitted within 30 days of the receipt of this order.

C.M.A./17/FTOOrder accordingly.