LAHORE: The Lahore High Court (LHC) has upheld recommendations of Federal Tax Ombudsman (FTO) to Federal Board of Revenue (FBR) to refund the sales tax amount deposited by a taxpayer.
The court also order to launch an investigation why Directorate of Investigation and Intelligence (I&I) did not file an appeal against the light sentences awarded to the mastermind of tax fraud scam.
It is learnt that LHC has recorded its findings that the act of FBR to recover sale tax from a taxpayer without proving that he was involved in a tax fraud was tantamount to maladministration in terms of Section 2(3) of the FTO Ordinance, 2000.
A constitutional petition was moved by a Gujranwala-based taxpayer through the lawyer Waheed Shahzad Butt challenging the I&I action to file representation before the President of Pakistan against the order passed by FTO that was in favour of FBR and against FTO while LHC reversed that order.
In this case of novel nature following recommendations were issued by the FTO to FBR to direct the Chief Commissioner to refund the amount deposited by complainant, under protest, as there was no legal order in the field at the relevant time; direct the commissioner to cancel the Order-in-Original dated 29.07.2011; conduct an enquiry to identify if any PRAL officials were involved in the scheme and to proceed against the defaulters, as per law and launch an investigation into the circumstances why the officials of the Directorate of I&I did not file an appeal against the apparently light sentences awarded to those who seemingly masterminded the scam.
LHC order states “The petitioner is a registered person under the provisions of Sales Tax Act, 1990. In the month of May, 2010, a notice was issued by the respondents (Intelligence & Investigation) by which the petitioner was confronted with certain amounts which were claimed as input tax by the respondents. The said amounts were deposited under protest by the petitioner.
