MUHAMMAD SAJID MINHAS VS SECRETARY, REVENUE DIVISION, 2015 PTD-FEDERAL-TAX-OMBUDSMAN-PAKISTAN 563 (2014)

Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---

----Ss. 2(3)(i)(ii) & 10(1) & (4)---Delay in settlement of refund claim---Maladministration---Case of complainant remained pending in a wrong zone for 9 months, which constituted maladministration on the part of Regional Tax Office---Complainant was made to suffer without any fault on his part---Reminders of the complainant to the Chief Commissioner also bore no fruit---Neglect and inefficiency caused delay in assessing correct jurisdiction to the case for settlement of the refund claim was tantamount to maladministration in terms of S.2(3)(i)(ii) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000---Federal Board of Revenue, was recommended to direct the Chief Commissioner, Regional Tax Office to; resolve the issues involved in the case on priority basis to settle the refund claim; to fix responsibility for delay of 9 months in settlement of jurisdiction issue and take disciplinary action against those found responsible for that; and report compliance within 30 days.

Umar Farooq, Advisor Dealing Officer.

M. Shabbir, Sheikh Authorized Representative.

Saima Munawar, DCIR Departmental Representative.

FINDINGS/RECOMMENDATIONS

ABDUR RAUF CHAUDHRY (FEDERAL TAX OMBUDSMAN).---The complaint was filed in terms of section 10(1) of the FTO Ordinance, 2000 (the Ordinance) alleging delay in settlement of refund claim amounting to Rs.6,365,000 for the Month of July 2013. The complainant (Commercial Exporter) reminded the Chief Commissioner. Regional Tax Office-I (RTO-I), Lahore, more than once, to sanction his refund claims but, nothing was done by the Deptt. till filing of this complaint to the ETO.

2.The complaint was referred for comments to the Secretary, Revenue Division in terms of section 10(4) of the Ordinance. In response, the Deptt. filed comments vide letter C.No.1(768)S(TO-II)/ 2014 dated 17-7-2014 a copy of which was provided to the AR of the complainant. As per Dept'l comments, refund of the complainant could not be processed due to the following reasons:--

(i)The case was inadvertently sent to Zone-VI, where it kept lying without any action from 2-9-2013 to 27-6-2014 when it was marked to Zone-V, where the jurisdiction actually pertained;

(ii)A system generated objection was raised by the STARR regarding non verification of taxable supplies in the supply chain;

(iii)As this was the first refund claim of the complainant, it required pre-refund audit which had to be done before processing of refunds.

3.A notice for pre-refund audit was issued by Commissioner Inland Revenue (CIR) on 18-7-2014, which was duly replied by the complainant on 25-7-2014. The DR intimated that the letter for pre-refund audit was sent to the complainant on 18-7-2014 but, no record was furnished. The AR offered to sit with the concerned officer of RTO-I for sorting out the objections through overruling. The DR clarified that the objections related to supply chain which could not be resolved through overruling. Hence, pre-refund audit was the only solution for which record was required. The AR promised to supply the requisite record for pre-refund audit by 18-6-2014. In turn, the RTO assured to complete the audit before 22-8-2014 and submit report on the next date of hearing on 25-8-2014.

4.On 25-8-2014, the DR informed that, in compliance with the instructions given on the last date of hearing, audit of the complainant unit was completed, and audit observations were conveyed to the AR. However, as incomplete record had been furnished by the AR for audit, the observations given were also interim. The AR, however, contended that, after these audit observations, some amounts must have been found valid which could be sanctioned and the remaining claims could be dealt with as per law, by deferring or rejecting the claims. The DR agreed to this proposal with the observation that unless the complainant submitted complete record for pre-audit, a clear position would not emerge.

5.The AR promised to make up any deficiency in the record already supplied for pre-audit. He, however, contended that STARR objections were trivial, which could be easily overruled by the Commissioner. The DR assured to complete the due process immediately on receipt of the deficient documents and decide the refund claim as per law.

6.It is unfortunate that the case of complainant remained pending in a wrong Zone for 9 months which constitutes maladministration on the part of the RTO-I, Lahore. The complainant was made to suffer without any fault on his part. Remainders of the complainant to the Chief Commissioner also bore no fruit.

Findings:

7.Neglect and inefficiency caused delay in assigning correct jurisdiction to the case for settlement of the refund claim is tantamount to maladministration in terms of section 2(3)(i) and (ii) of the Ordinance.

Recommendations:

8.FBR to direct the Chief Commissioner, RTO-I, Lahore to-

(i)resolve the issues involved in this case on priority to settle the refund claim;

(ii)to fix responsibility for delay of 9 months in settlement of jurisdiction issue and take disciplinary action against those found responsible for it; and

(iii)report compliance within 30 days.

HBT/125/FTOOrder accordingly.