Utility Stores Corporation (USC) has filed a complaint about the harassment from the Federal Board of Revenue (FBR) in the Federal Tax Ombudsman.
This complaint has been filed against Muhammad Fiaz Hussain DCIR, LTO, Islamabad against Mal-administration and Mis-representation during under process appeal filed by Utility Stores Corporation relevant to tax period w.e.f. 2012 to 2016 through submission of report No. 129 dated 28.08.2023.
The complaint has been filed on the following grounds:
- USC had been registered as a Non-Profit Organization (NPO) and working with a subsidy grant provided by the Government of Pakistan for the help of poor people of Pakistan and involved in the sale of household goods/Grocery Items which includes Flour, Sugar, Pulses, Tea, Rice etc.
- USC had declared the input tax paid against purchases during the period amounting to Rs. 5,049,948,999 and shown in the Sales Tax Returns filed. This claim of the taxpayer is verifiable from the FBR e-portal computerized system because such purchases are properly shown by the relevant parties detail of which was already provided to the department during proceedings at different level but such amount of tax was again created through O.N.O No. 05/51 dated 28.02.2019 without verification from the FBR system.
- Presently, the appeal filed by the taxpayer company is under process before the Honorable ATIR Bench, and the officer Muhammad Fiaz Hussain DCIR was directed vide letter No.2092 dated 20.12.2022 to verify such amount of input tax claimed through the FBR system but he failed to apply his mind and discharged his official responsibilities and issued verification letters to the vendors of M/s USC involved in such period against section 24 of the Sales Tax Act 1990 which is reproduced below for ready reference and record please:
- Section 24. Retention of records and documents for (six years): A person who is required to maintain any record or documents under this Act, shall retain the record and documents for a period of (six) years after the end of the tax period to which such record or documents relate [or till such further period the final decision in any proceedings for assessment, appeal, revision, reference, petition and any proceedings before an Alternative Dispute Resolution Committee is finalized].
- Section 71. Initiation of recovery action: On expiry of thirty days from the date on which the Government dues are adjudged, the referring authority shall deduct the amount from any money owing to the person from whom such amount is recoverable and which may be at the disposal or in the control of such officer.
It is surprising to note that Unilever, Dalda, and various others (list attached) suppliers/vendors had already furnished their Sales Tax Returns through the electronic system of FBR showing the purchases of USC but the said officer failed to apply his mind and not verified the input tax paid by the USC amounting to Rs. 5,049,948,999 and mis-represented the ATIR Bench through letter No.129 dated 28.08.2023 in violation of Section 24.
Of the Sales Tax Act 1990 because the FBR had already accepted their Sales Tax Returns and not raised any objection on their filed Sales Tax Returns the following questions arise for investigation through letter No. 129 dated 28.08.2023 in violation of Section 24. Of the Sales Tax Act 1990 because the FBR had already accepted their Sales Tax Returns and not raised any objection to their filed Sales Tax Returns. Hence, the following questions arise for investigation and findings against the illegal act of the relevant officer :
- How the verified amount of Input Tax of Rs.5,049,948,999 can be rejected which is verifiable through the FBR electronic system?
- How the manual verification letter can be issued to the vendors/suppliers under section 24 of the Sales Tax Act?
does not allow the department after a lapse of 6 years?
- How the Sales Tax amount already paid to the tune of Rs.5,049,948,999 can again be recovered and which provision of the law allows for recovery of Sales Tax already paid twice?
The relevant officer has misrepresented the case before the Honorable ATIR Bench and committed Mal-administration and Harassment to the taxpayer who is paying taxes in Billions on account of Income and Sales Tax as well as being a withholding agent throughout the country. This act of the officer has damaged the smooth functioning system of USC and created obstacles to providing the Household Goods /Grocery Items which include Flour, Sugar, Pulses, Tea, Rice, etc., to the poor and needy people.
Now he has issued the show cause notice to the Manager Operations MCB Islamic Bank for recovery of Sales tax already paid relevant to the period under consideration and harassing the bank officers as well as the officer of USC.
As per the record, the company has already filed the claims of refund of Rs. 4,250,202,302 which has not been disposed of before the recovery proceedings in violation of standing directions of FBR and violated the law.