LATIF TEXTILE MILLS (PVT.) LTD., KARACHI VS SECRETARY, REVENUE DIVISION, ISLAMABAD
2011 P T D 1368
[Federal Tax Ombudsman]
Before Dr. Muhammad Shoaib Suddle, Federal Tax Ombudsman
Messrs LATIF TEXTILE MILLS (PVT.) LTD., KARACHI
Versus
SECRETARY, REVENUE DIVISION, ISLAMABAD
Complaint No. 165/KHI/ST(46)/742 of 2010, decided on 10/10/2010.
2010.
Sales Tax Act (VII of 1990)---
----Ss. 10 & 66---Sales Tax Registration Rules, 2006, Rr.26 & 28---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.2(3), 9, 10 & 11---Refund claim, deferment of---Complainant was carrying on business as a registered company engaged in export of Textile items---Complaint received certain amount of claim, whereas payment of balance amount was deferred---Department had contended that. complainant filed claim, but failed to provide taxable consumption of raw material, thus claim could not be processed in absence of taxable consumption in stock statement and that subsequently when stock consumption statement was supplied by representative of the complainant, some of the cases were processed, while remaining claims would be processed after the complete stock statement would be provided---Officials concerned had proceeded with part claims during the pendency of the complaint, which had shown that said documents were in their possession; and it was on account of negligence, inefficiency and ineptitude of officials concerned that matter could not be processed within statutory time limit---Recommendations were made to Federal Boardof Revenue todirect the Chief Commissioner, Regional Tax Office to ensure finalization of the case of the refund claim as per law and to report compliance within 30 days.
Muhammad Bashir and another v. Province of Punjab through Collector of District Gujrat 2003 SCMR page 83 and Khalil Cotton Factory, Multan v. Income Tax Office, E-Circle, Multan 1979 PTD 429 ref.
Justice (Retd.) Mrs. Qaiser Iqbal, Advisor, Dealing Officer.
M. Afzal Awan and Imran Iqbal, Authorized Representative.
Akhtar Hussain Qureshi Deputy Superintendent, Departmental Representative.
FINDINGS/RECOMMENDATIONS
DR. MUHAMMAD SHOAIB SUDDLE, FEDERAL TAX OMBUDSMAN.---The complainant, Messrs Latif Textile Mills (Pvt.) Limited, is carrying on business at Karachi as a registered company engaged in export of Textile items. During the course of business, the complainant filed refund claims pertaining to periods from June, 2005 to April, 2009 and involving Rs.13,529,538. He received Rs.4,152,374, whereas the payment of balance amount of Rs.9,377,164 was deferred due to negligence of the officials of the Department. The complainant wrote several letters to the Department which were not responded to. The complainant has approached this forum for redressal of hid grievance.
2.Parawise comments were filed by the Department stating therein that the complainant had filed claims on RCPS but failed to provide taxable consumption of raw material either on RCPS or through a hard copy. Therefore the claims could not be processed in the absence of taxable consumption in stock statement. It is further stated that during the course of the proceedings of the complaint, the stock consumption statement was supplied by the complainant's representative.Resultantly, some of the cases were processed, while the remaining refund claims would be processed after the complete stock statement was provided. Some claims of the complainant were deferred and objection memos issued to the complainant for want of documents. As such, there was no maladministration on the part of the Department.
3.The learned AR has contended that the Department was not vigilant in processing the complainant's claim of refund within 45 days as provided under law. This period could be extended to another period of 60 days and for 120 days by F.B.R. It is urged that the complainant was running from pillar to post, but no heed was being paid by the Department. Even when supportive documents were filed on RCPS and acknowledgement issued, the claim was not settled. It is urged that after the complainant approached the Hon'ble FTO's forum, the Department advertedtotheComplainant'sgrievanceandpartpaymentsweremade, which suggests that the complainant had fully met his part of obligation.
4.The DR has primarily contended that the complaint being time-barred is hit by the provision of section 10(3) of the Federal Tax Ombudsman Ordinance, 2000, and also the delay is due to non submission of requisite documents by the complainant.
5.Adverting to the objections raised by DR, the consensus of the superior courts is that no preferential treatment can be offered to a public functionary and both the parties are treated on equal footing with regard to the condonation of period of limitation. In the context, reliance is placed on the case of Muhammad Bashir and another v. Province of Punjab through Collector of District Gujrat (2003 SCMR page 83) in which it is held that technicalities of law are always avoided and discouraged in order to do complete justice. Rules of procedure are enacted for fostering the ends of justice and preserving the rights rather than to stifle the dispensation of justice. In case of Khalil Cotton Factory, Multan v. Income Tax Office, E-Circle, Multan 1979 PTD429, it was observed that the delay in making an application, if satisfactorily explained, is liable to be condoned on the basis of above discussion. The objections of DR that the complaint is time-barred is therefore over-ruled.
6.The learned AR has satisfactorily explained that he had approached the public functionaries for the purpose of processing of refund claims by addressing letters which were not replied to. Adverting tothemeritsofthecase,anapplicationfortherefundofclaimis required to be filed under Rule 26 of Sales Tax Rules 2006 by a registered person who acquires tax paid inputs for use zero percentundertheActoranotificationissuedthereunderandafterreceivingthe requisite data on RCPS format, the claim of the claimant is tobeexpeditedunderRule28within120daysofthefilingofreturn provided that theperiodof120daysistobereckonedfromthe date BCA is issued by the concerned Bank. It thus seems that the case of complainant was not decided within the specified time on flimsy ground.
Findings:
7.The question of jurisdiction is not attracted in the circumstances as the officials concerned had proceeded with part claims during the pendency of the complaint which shows that documents were in their possession. It was on account of their negligence, inefficiency and ineptitude that the matter could not be processed within the statutory time limit.
Recommendations:
8.F.B.R. to direct the Chief Commissioner, Regional Tax Office, Karachi, to--
(i)ensure finalization of the case of the refund claim as per law; and
(ii)report compliance within 30 days.
H.B.T./123/FTOOrder accordingl