ALTERNATE DISPUTE RESOLUTION RULES, 2002---COMMENTS

ALTERNATE DISPUTE RESOLUTION RULES, 2002---COMMENTS <!--[if gte mso 10]> ALTERNATE DISPUTE RESOLUTION RULES, 2002---COMMENTS By Akhtar Javed, Advocate, Lahore Through Finance Ordinance, 2002, section 47A was inserted in Sales Tax Act, 1990 and a new concept was introduced in the sales tax law to resolve the disputes between the taxpayers and the sales tax officials outside the Courts. 2. The newly added section 47A provides that C.B.R. may, of its own motion or on an application in writing by a registered person or a class of such persons, opting for the resolution of any hardship relating to levy and payment of tax, may appoint a Committee consisting of a Collector of Sales Tax, one or two persons from among the notified panel of Chartered Accountants, Advocates, representatives of trade bodies or another reputable taxpayers and a Member of C.B.R. 3. In terms of proviso to subsection (1) of section 47, C.B.R. cannot constitute a Committee in cases where the matter has been decided by a High Court or the Supreme Court. 4. For carrying out the purposes of section 47A of the Act, C.B.R. vide S.R.O. 737(I)/2002, dated 26-10-2002 has notified the Alternate Dispute Resolution Rules, 2002. 5. The aforesaid Rules provide that in a case or class of cases where for evidently valid reasons, a person or a class of person does not agree with or is otherwise aggrieved with any proceedings, action, order, decision or judgment as to the determination of tax including additional tax and imposition of penalty under the Act and prima facie deserves relief for the elimination of possible hardship, an aggrieved registered person interested for resolution may submit to the Chairman C.B.R., a written application for resolution of the dispute. In his application, the registered person is required to state: (a) The Collectorate of Sales Tax and the office of the Sales Tax with whom a dispute has arisen; (b) the particulars of the case; (c) the grounds on, the basis of which a resolution of a dispute is being sought by the applicant duly supported with relevant documents; (d) the extent or the amount of sales tax, additional tax and penalties etc., which the applicant agrees to pay, if any; (e) details of amounts already paid, if any; (f) the particulars of any person who will represent the applicant; and (g) an undertaking on a stamp paper of fifty rupees witnessed by two persons to the effect that the dispute has not been decided by any High Court or the Supreme Court of Pakistan and the applicant shall, if required, pay the remuneration of the members other than a public servant, of the Committee to the extent and in the manner specified by the Chairman of the Committee as laid down in rule 5. 6. The Committee shall examine the questions of facts and law involved in dispute and may conduct inquiry, seek expert opinion, direct the Collector to conduct an audit or special audit by Chartered Accountants or Cost Accountants. The Board may specify the time within which the Committee will be required to submit its report. 7. The members of the Committee other than public servants will be paid by the applicant remuneration of members covering the traveling allowance and daily allowance and the extent and amount of remuneration will be decided by the Chairman of the Committee. 8. The Chairman of the Committee shall be responsible for deciding the procedure to be followed by the Committee including the following namely: (a) to decide about the place of sitting of the Committee; (b) to specify date and time for conducting proceedings by the Committee; (c) to supervise the proceedings of the Committee; (d) to issue notices by courier, registered post or electronic mail to the applicant; (e) to requisition and produce relevant records or witnesses from the Collectorate or other concerned quarters; (f) to ensure attendance for hearings either in person or through an Advocate, representative or a tax consultant; (g) to coopt any other technical, professional, or legal expert or specialist or tax consultant; (h) to consolidate recommendations of the Committee and submission of the conclusive report to the Board; and (i) for any other matter covered under these rules. 9. After completion of inquiry, the Committee will make the recommendations with consensus in respect of the following namely: (a) the liability of tax against the registered person, or admissibility of refunds, as the case may be; (b) the extent of waiver of additional tax and penalty by stating reasons and circumstances leading to the recommendation; (c) the quantum of input tax admissible in terms of subsection (3) to section 7; (d) relaxation of any procedural or technical irregularities and condonation of any prescribed time limitation; and (e) any other specific relief required to resolve the dispute. 10. On recommendation of the Committee, C.B.R. may pass such order as it may deem fit for the resolution of dispute. However, C.B.R. on its own motion, or on the request of the applicant, may refer back the recommendation of the committee for rectification of any obvious error or for reconsideration of facts not considered earlier. 11. On receipt of Board's order, the concerned Collector shall implement the order in such manner and within such period as may be specified by the Board. After the payment or recovery of the tax liability determined an ordered by the Board, all other decisions, orders and judgments made and passed shall stand modified to that extent and all proceedings under the Act or Rules or forum shall abate. 12. A person aggrieved on account of any obvious error or incorrect application of law or misunderstanding of any fact by an order of C.B.R. 'issued in pursuance of recommendation of the Committee make a representation to Chairman C.B.R./Secretary Revenue Division within 60 days of the order. After receipt of representation, the Chairman will pass order as he may think fit.