ISLAMABAD: The Islamabad High Court (IHC) on Monday disposed of a case, seeking the court’s directives to restrict the Federal Board of Revenue (FBR) from recovering the outstanding tax amounting to Rs 34,746,413.
A single bench of the IHC comprising Justice Aamer Farooq decided the case filed by M/s Fazal Steel (Private) Limited. He remanded back the case to the Appellate Tribunal Inland Revenue (ATIR) for rehearing and disposal.
The appellant had filed the case against officers of the Large Tax Payers unit, Islamabad. Deputy Commissioner Inland Revenue Audit and Commissioner Appeals Inland Revenue were made respondents in the case through advocate Muhammad Asad.
Through the petition, the appellant had complained against Deputy Commissioner Inland Revenue Audit that he had issued an assessment order under adjudication before the Commissioner Appeals. The appellant further stated that order, dated, May 28, 2016, had been issued with malafide intentions and resultantly coercive measure of recovery of sales tax were started.
The petitioner had prayed the court operation of the impugned order issued by the deputy commissioner Inland Revenue Audit may kindly be suspended till the decision of appeal pending before the commissioner appeals.
In view of the circumstances mentioned above, the court heard arguments of sides and decided that the case should be heard by the appellate tribunal inland revenue and hence decided.
LTU counsel argued before the court that during scrutiny of sales tax returns and allied information available in FBR’s E-Portal in respect of M/s Fazal Steel Private Limited, Islamabad, incomplete charge of tax was identified for the tax year 2013-14.
Thereafter, on the basis of facts, show cause notice was issued to the company highlighting discrepancies that the income tax returns filed for the tax years 2014 and 2015, the registered person has declared sales of Rs 2,703,490,480 and Rs3,849,271,058 respectively. Whereas, sales of Rs1,335,952,284 and Rs1,742,167,991 in the said tax periods have been declared in the monthly sales tax returns.
The counsel objected the mentioned facts revealed that company has made supplies to unregistered person, but not deposited further tax at the rate of one percent on the supplies of and violated provisions of sales tax act, 1990 and sales tax special procedure rules 2007.
Therefore, sales tax amounting to Rs 34,746,413 stood recoverable under section 11(2) of Sales Tax Act.
