KARACHI: Indus Motors Company Limited has approached the Sindh High Court (SHC) seeking declaration of entitlement of exemption certificate from payment of advance tax under section 148 of the of the income tax ordinance 2001 for the period ending on June 30, 2020 and also seeking release of its imported consignment on bank guarantee.
On 21 July 2020, counsel for the petitioner argued that petitioner filed an estimate of its tax liability for tax year 2020, it estimated its tax liability as Rs1,598,168,635 in accordance with section 147(6), Commissioner IR Zone-I Large Taxpayers Unit may if he is not satisfied with the estimate, after providing an opportunity of hearing of the taxpayer, reject the estimate and require the taxpayer to pay advance tax in accordance with formula prescribed in section 147(6). The estimate filed by the petitioner was accepted by the respondents and has never been questioned.
He submitted that however, respondent by stating that the petitioner has failed to discharge its tax liability for the current tax year on the basis of determined higher tax liability of its two proceeding tax year 2018, on September, 2019 the petitioner responded that the requirement to discharge the entire year’s liability for seeking an exemption till Dec 31, 2019 is unreasonable, would cause undue hardship and financial distress.
He said that as such, the petitioner requested the respondent to consider its request, this request remained pending without any orders and petitioner also applied for seeking exemption from deductions under section 153 of the 2001 ordinance on payments made to it for supply of goods.
He further says that on Jan 6, 2020 the respondent rejected the first exemption application after a delay of almost 3 months and on Jan 22, 2020 also rejected second exemption application on the basis of the order dated Jan 6, 2020 passed on the first exemption application stating that the former became infructuous upon the rejection of the latter.
Counsel argued that during the pendency of the revision application, the goods imported by the petitioner reached at port, the respondents refused to release the petitioner’s consignment unless it presented an exemption certificate for the goods.
Citing chairman FBR, chief Large Taxpayers Unit, CIR Zone 1, Taxpayers, collector of Customs Appraisement East, Port Qasim as respondents, petitioner pleaded the court to declare that the petitioner is entitled to exemption certificate from payment of advance tax under section 148 of the ordinance 2001 for the period ending on June 30, 2020 and set aside the impugned order dated March 06, 2020.
He further pleaded the court to direct the concerned customs officials to release the bank guarantees submitted by the petitioner for provisional release of consignments in pursuance of order dated Feb 4, 2020.
