KARACHI: The Sindh High Court (SHC) restrained the Tax Department from enforcing recovery of federal excise duty on a constitutional petition filed by M/s Omni Aviation Private Limited against the impugned recovery of alleged disputed tax liability of Rs5.2million.
Hearing the petition, a two-member bench, comprising Justice Aqeel Ahmed Abbasi and Justice Arshad Hussain Khan, also directed the Tax Department and deputy attorney general of Pakistan to file their respective comments on next date of hearing. Afterwards, the court adjourned the hearing for February 16, 2017.
Earlier, counsel for petitioner stated that petitioner imported aircraft for operating a private/charter flights for self and on behalf of associated companies, mainly for directors and other senior staff. He informed the court that till to date, neither any licence for operating charter flights nor for commercial air has been issued by the civil aviation or any other authority in Pakistan therefore sales tax-cum-federal excise returns for the period July 2013 to June 2014 and July 2014 to June 2015 were e-filed by the petitioner declaring nil receipts since petitioner has not provided any taxable services as a commercial or charter flight operator.
Counsel argued that officials of the tax authorities have initiated proceedings under the Federal Excise Act-2005 as per show-cause notice dated October 19, 2016 issued to the petitioner that it had violated the Federal Excise Act-2015. He said it explained all the situations and informed them that provision of Section 3 (1) (d) of Federal Excise Act is not applicable as taxable services have not been provided and all the receipts represent reimbursement of expenses.
Citing Secretary, Ministry of Law, Chairman, Federal Board of Revenue (FBR), Commissioner, Inland Revenue, Zone-IV, Deputy Commissioner, Inland Revenue, Enforcement & Collection Unit-03, Zone-IV and Corporate Regional Tax Office as respondents, petitioner pleaded with the court to declare that act of the Tax Department illegal, mala fide and arbitrary.
Petitioner also pleaded with the court to set aside the impugned show-cause notice and restrain them from taking any coercive action against him.
