FAISALABAD: A tension between the Faisalabad Electric Supply Company (Fesco) and the Federal Board of Revenue (FBR) reached its peak when the company disconnected power supply to the board’s regional office on Tuesday.

The move was alleged reaction to the FBR freezing Fesco bank accounts for not paying more than Rs5 billion sales tax on subsidies.

The Fesco employees had tried to disconnect the supply from the FBR premises but failed to do so as board staff resistance.

FBR officials said Fesco had disconnected power supply illegally as the board was served with no disconnection notice. They said the track record of bill payment by FBR was also good.

Sources told Dawn the FBR officials had asked the Fesco chief to pay sales tax on the subsidies that was about Rs5.5 billion. They had also frozen all accounts of Fesco, most of them in private banks, and did not allow the company officials to withdraw payments. They said FBR officials along with police also visited the banks and sought details of Fesco accounts from the branch managers.

The FBR had also deputed its employees at two banks branches on the Susan Road and in People’s Colony to keep an eye on the movement of Fesco officials who tried to withdraw amount from the banks.

The Fesco officials, on being informed of FBR contact with managers, talked to the Faisalabad regional police officer and apprised him of the pending matter of the tax before a tribunal, asking the police to stay away from the situation. Agreeing with the Fesco officials, the RPO withdrew the police who were accompanying FBR officials.

It was reportedly the first time that the FBR had asked the Fesco to pay tax on subsidies that was a federal government subject.

To deal with the situation, a meeting of the Fesco Board of Directors (BoD) was convened on Tuesday which decided to request the ministries concerned to take up the issue at the federal level. They said FBR approach would land consumers in an outlandish situation as Fesco had to pay a hefty amount daily to the Central Power Purchase Agency for electricity.

The BoD had also expressed anger over disconnection of the electricity supply to the FBR offices and asked the chief executive to get restore the supply immediately.

The Fesco officials had also apprised State Minister for Water and Power Abid Sher Ali of seizure of accounts and said the situation would lead to prolonged outages if payments were not issued to the power producers.

Fesco spokesman Tahir Sheikh told Dawn that the Lahore High Court had granted stay in favour of the company and had directed the FBR to de-attach the accounts and stop recovery procedure. He claimed Fesco had not disconnected the power supply to the FBR offices.