KARACHI, July 9: The tax authorities have recovered Rs336.85 million from the Port Qasim Authority (PQA) in taxes after attaching their bank accounts, CBR sources said on Tuesday.
Out of total tax liabilities of Rs670 million, which pertains to the assessment years 1999-2000 and 2000-2001, only half of the amount was recovered before the year close on June 30, 2002, the sources said.
Before attaching the bank accounts of PQA, tax authorities served several notices on the authority reminding them to file tax returns and arrange payments of tax.
In first move the tax authorities in April this year attached the PQA accounts in the National Bank of Pakistan (NBP) located at the port and recovered Rs110 million in taxes.
Instead of taking the matter seriously the high-ups of the PQA remained indifferent and preferred to keep silent and did not submit the returns nor did pay tax, sources said.
In another move the tax authorities recovered Rs226.85 million by attaching PQA account with National Savings House, Main Shahrah-e-FAisal, Karachi, taking the total amount recovered to Rs33.85 million.
At one stage the PQA tried to evade the tax by claiming to be a local authority, which is exempted from tax. However, the tax authorities asked the officials concerned of the PQA to submit proof, if any, in this regard.
On failing, the tax authorities informed the PQA that the authority has no immunity from tax and despite the fact that it is a statutory body, the PQA Act of 1973 does not give it exemption from tax, CBR sources told Dawn from Islamabad.
Repeated demand from the tax department for submitting audited accounts of PQA for the last so many years also landed on deaf ears, because, according to the sources, the PQA has no system of internal as well as external audit.
On monitoring the tax department detected many other irregularities. The tax deduction at source of PQA employees is also not being properly carried out as per the tax laws.
The tax haunts also tried to approach the PQA chairman who was asked to make arrangement for the payment of at least 50 per cent of the remaining outstanding tax dues by June 12, 2002.
After left with no choice the PQA authorities ultimately gave their consent to the National Savings House, Karachi for which the former was asked to make arrangement for securities equivalent to the remaining 50 per cent of tax amount.
As a result of this development a payment of Rs226.85 million through crossed cheque No.B-828619, dated 29.6.2002, was made to the tax department. While for the balance amount the PQA managed to get the assessment order for fresh assessment set aside through the Commissioner of Appeals.
The PQA officials instead of facing the problem also tried to dodge the issue by claiming that a constitutional petition is pending before the Sindh High Court.
However, the CBR sources said that the PQA did file a petition (No.D-594 of 1995, filed in April 1995) in SHC which was admitted but PQA authorities have neither obtained stay nor the court has given any decision on the petition.
According to tax experts, had the PQA maintained proper accounts and carried out internal and external audit it would have saved it from paying such a huge amount in taxes. As a result of negligence on part of PQA authorities the recovery of Rs336.85 million by tax authorities has turned out to be highest amount of the fiscal 2001-2002.