ISLAMABAD: The Federal Tax Ombudsman (FTO) has strongly criticized the Federal Board of Revenue (FBR) for harassing exporters by arbitrarily blocking or suspending their Sales Tax Registration Numbers (STRNs) on unproven allegations of tax fraud — in direct violation of superior court rulings.
In a recent case brought forward by a textile exporter, the FTO highlighted what it termed a widespread pattern of harassment being carried out by various FBR field offices. The exporter, an Association of Persons (AOP) engaged in textile manufacturing and exports, had his sales tax registration suspended without notice, allegedly due to purchases from suspended or blocked suppliers. This suspension not only disrupted his business operations but also resulted in undue financial pressure.
According to the complaint, the exporter only became aware of the issue when suppliers informed him that his STRN appeared inactive since February 2025. The exporter repeatedly contacted the Commissioner Inland Revenue, Zone-I, CTO Karachi, and even paid Rs 1 million under protest in March 2025. Despite this, his registration was not restored.
The FTO noted that this was not an isolated incident. “Multiple identical complaints have been reported during interactions with trade and legal bodies, indicating that FBR officials are engaging in unjust, biased, and oppressive practices. Exporters are being coerced into making payments under the threat of suspension — a clear violation of Supreme Court and High Court directives,” the FTO stated in its findings.
The Ombudsman further emphasized that such actions by FBR field officers amount to maladministration, especially when done without invoking Section 11E of the Sales Tax Act. The FTO cited Supreme Court judgments dated January 16, 2025, and May 18, 2018, which declared such suspensions illegal when executed without due process.
As a result, the FTO has made specific recommendations to the FBR:
1. The Commissioner IR, Zone-I, CTO Karachi should immediately process the exporter’s refund claim, which was paid under protest, following legal procedures.
2. The Member (Operations) of FBR should take disciplinary notice of the repeated disregard for Supreme Court orders, as a measure to restore trust among taxpayers, particularly exporters.
The FTO urged the FBR to take corrective action to prevent further erosion of taxpayer confidence and ensure that future enforcement aligns with the rule of law and judicial precedent.
