KARACHI, Jan 10: On a complaint of M/s Cynamid Pakistan Ltd, Karachi, the federal tax ombudsman Justice Saleem Akhtar has recommended that the CBR should direct the collectors concerned to trace and identify the pending refund claims of the complainants, and decide and disburse the admissible amounts within 30 days.
In his decision the federal tax ombudsman has also directed that verification from the sales tax department, if considered necessary, may be obtained afterwards and compliance be reported within 45 days.
The complainants, through their counsel Aziz A. Shaikh and Tayyaba Jabeen, had lodged complaints against the customs department for neglect, deliberate and intentional delay and ineptitude in the administration of justice by abnormal delay of more than two years in the disposal of sales tax refund claims.
They had stated that they were engaged in manufacture, marketing and distribution of drugs and medicines registered under the Drugs Act of 1976. They imported different raw materials and packaging materials during 1997-1999 under the bonafide belief that these materials were exempt from sales tax under the Sixth Schedule of the Sales Tax Act of 1990. However, the customs department recovered sales tax on the materials on the plea that the same were taxable under the Customs Act as they were not listed in the exemption notifications SRO 349(I)/85 and SRO 1147(I)/89.
The complainants filed constitutional petition in the Sindh High Court seeking directive for disposal of the claims within two months which was allowed, vide order dated 2-02-2001, directing the respondents to decide the question in issue within the given time frame. The High Court’s orders have not yet been complied with. No other proceedings were pending before any forum except the refund claims pending action with the respondents.
The counsel stated that the refund claims were established in early 1999, but the respondents neither replied to the claimants nor decided the claims and illegally retained Rs15,648,636 belonging to the complainants.
The collector of customs, PQA, replied to the complaint that scrutiny of the record showed that no claim of refund had been filed by the complainants and none was pending in the collectorate. The collector of customs (appraisement) stated in his reply that the records of the appraisement collectorate confirmed that 86 refund claims were pending.
The federal tax ombudsman observed that it was shocking to note that despite the decision in favour of the complainants at the apex court, the customs authorities failed to take action to allow refund of sales tax. Even when the High Court laid down two months’ time limit to decide the refund claims, the authorities remained unmoved.
“The customs authorities have displayed scant regard for the orders and directive of the superior courts, which betrays lamentable maladministration on their part,” he observed.
