LAHORE: The Federal Tax Ombudsman (FTO) has dismissed a complaint involving alleged tax evasion of over Rs70 million, reiterating that it will not entertain frivolous cases or matters already pending before courts of law.
The case revolved around the suspension of a Sales Tax Registration Number (STRN), with the complainant alleging procedural violations by tax authorities. The complaint was filed under Section 10(1) of the Federal Ombudsman Ordinance, 2000, claiming that the registration was suspended on May 2, 2025, without prior notice or an opportunity of hearing—allegedly breaching Section 21 of the Sales Tax Act, 1990, along with Rule 12 of the Sales Tax Rules, 2006, and relevant judgments of the Sindh High Court.
The complainant argued that under the law, such suspension is temporary and becomes void if not followed by a blacklisting order within 90 days. Despite the lapse of this period, the authorities neither issued a blacklisting order nor restored the STRN, leading to financial losses and disruption of business operations.
However, the Revenue Division raised serious concerns over the complainant’s tax declarations. Officials highlighted that the taxpayer, registered as an ice manufacturer, reported a carry-forward amount exceeding Rs19 million without corresponding tax payments. This discrepancy pointed to a potential sales tax liability surpassing Rs70 million, with authorities questioning the feasibility of maintaining such large inventories in a perishable goods business.
During proceedings, it also surfaced that the complainant had already approached the Sindh High Court through a constitutional petition seeking the same relief—restoration of the suspended registration—after filing the complaint with the FTO.
Taking note of parallel litigation, the FTO ruled that the matter had become sub judice and thus fell outside its jurisdiction under Section 9(2)(a) of the FTO Ordinance, 2000. The complaint was consequently closed without further investigation, and the record was consigned.
The decision underscores the FTO’s strict stance against misuse of its forum, emphasizing that while genuine taxpayer grievances will be addressed, frivolous complaints and duplicate proceedings will not be entertained. It also reflects a zero-tolerance approach toward suspected tax fraud cases under scrutiny by the Federal Board of Revenue.
