2024 PLP 86 (PTD)
N/A
| Citation | 2024 PLP 86 (PTD) |
| Forum / Court | Federal Tax Ombudsman |
| Bench Members | Dr. Asif Mahmood Jah, Federal Tax Ombudsman |
| Parties | N/A |
| Primary Law | Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000) |
Q1: What are the key laws and sections cited in 2024 PLP 86 (PTD)?
This judgment primarily cites: Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000) as referenced in Pakistani case law index.
Q2: Which judicial bench decided the case 2024 PLP 86 (PTD)?
The case was heard and decided by the Federal Tax Ombudsman bench comprising: Dr. Asif Mahmood Jah, Federal Tax Ombudsman.
Q3: What is the official citation format for this judgment on Pakistan Law Portal?
Cite this legal precedent as: 2024 PLP 86 (PTD) (N/A). Read the full summary and cross-referenced laws free on Pakistan Law Portal.
Laws Cited
Headnotes / Summary
Ss. 2(3)(i)(a), 2(3)(i)(b), 2(3)(i)(c), 2(3)(ii), 9 & 10
Sales Tax Act (VII of 1990), S. 13 & Sixth Sched. Serial No.46 (as omitted through Finance (Supplementary) Act, 2022)
FBR's U.O No. 4/I-STB/2022, dated 4th February, 2022-Maladministration
Scope
Imports by diplomats, diplomatic missions and other privileged persons were rendered taxable through Finance (Supplementary) Act, 2022, by omitting relevant Serial No.46 to the 6th Schedule of the Sales Tax, 1990, but FBR unilaterally rendered the said omission inapplicable vide U.O No. 4/I-STB/2022, dated 4th February, 2022 ('UO')
Reservations of the Ministry of Foreign Affairs ('MOFA') were that the said omission could trigger an adverse reaction from other foreign states and international organizations
Plain reading of UO in question revealed that FBR, on its own, had assumed the review jurisdiction of an Act of Parliament and unilaterally undid the omission and once again granted exemption from the tax levied by the Legislature
While doing so, the FBR had trespassed its legal domain, and issuance of UO, containing an oblique clue to FBR's volta-face, tantamounted to maladministration in terms of Ss. 2(3)(i)(a), 2(3)(i)(b),2(3)(i)(c) & 2(3)(ii)Federal Tax Ombudsman Ordinance, 2000, as the omission-in-question having hurriedly been enacted through Finance(Supplementary) Act, 2022 was perverse, arbitrary or unreasonable, unjust, discriminatory and was based on irrelevant grounds
Subsequent unilateral withdrawal through UO was contrary to law ;and even delay and ineptitude was shown by the FBR because summary for Federal Cabinet was moved after about 24 days of raising of alarm by the MOFA and that too at the intervention of Federal Tax Ombudsman ('Ombudsman')
Ombudsman directed the FBR to identify the officer responsible for said faux pas , resulting in an embarrassing position for MOFA and that proper legal cover be arranged in place of FBR's U.O No. 4/I-STB / 2022, dated 4th February, 2022
Own Motion was disposed of accordingly. Muhammad Tanvir Akhtar, Advisor Dealing Officer.
Judgment & Decree
ii. Consequent upon above enactment Ministry of Foreign Affairs (MOFA) vide its letter dated 1st February, 2022 had raised an alert that; a. Pakistan is signatory to Vienna Convention on Diplomatic Relations, 1961 (VCDR), which has force of law in Pakistan under Diplomatic and Consular Privileges Act, 1972. b. Apart from being labelled as non compliant of VCDR, Pakistan may face intervention by International Court of Justice on this unilateral withdrawal of concession granted through a multilateral treaty. c. Financial impact of this enactment would be disastrous if other nations invoke reciprocity. d. Imposition of taxes on UN agencies (WFP. UNICEF, WHO etc.) will be detrimental to humanitarian organizations operations in Pakistan. In view of above MOFA requested for an immediate remedial measure enforceable through some SRO. iii. PCT Heading 9901, 9902, 9903 and 9906 of Chapter 99 of 1st Schedule to the Custom Act, 1969 were restored as an interim arrangement after getting approval from Minister of Finance and Revenue. iv. FBR's U.O No. 4/I-STB/2022, dated 4th February, 2022, was issued, whereby exemption on imports by Diplomatic missions and privileged persons was restored with immediate effect. v. Subsequently on 24th February, 2022 Chairman FBR moved a summary for the Federal Cabinet for grant of exemption (withdrawn through Finance Supplementary Act, 2022) from Sales Tax effective from 15th January, 2022 in exercise of powers vested in the Federal Government under section 13(2)(a) of the Sales Tax Act, 1990. FINDINGS:
3. FBR's response has been examined and following observations are noteworthy; i. The Omission in question, hurriedly enacted through Finance (Supplementary) Act, 2022 falls in the ambit of maladministration under FTO Ordinance, 2000 in terms of section 2(3) (i) (b) i.e. a "perverse, arbitrary or unreasonable, unjust, discriminatory decision" and (c) i.e. "based on irrelevant grounds." ii. FBR's unilateral withdrawal through a UO dated 4th February, 2022 reveals that FBR on its own has assumed the Review Jurisdiction of an act of Parliament unilaterally. While doing so FBR has clearly overstepped its legal domain and its decision is an act of maladministration being contrary to law in terms of section 2(3)(i)(a) of FTO Ordinance, 2000. iii. MOFA had raised its alarm on 31st January, 2022 and 1st February, 2022, yet the summary for the Federal cabinet was moved on 24th February, 2022 and that too only after the intervention of this office dated 16th February, 2022. Delay, ineptitude in terms of section 2(3)(ii) of FTO Ordinance, 2000 is visible. RECOMMENDATIONS:
4. FBR is directed to ensure that; i. in order to avoid any such recurrence, identify the officers responsible for this faux pas, resulting in an embarrassing position for MOFA; ii. proper legal cover is arranged in place of UO dated 4th February, 2022; and iii. compliance is reported within 60 days. MQ/35/FTO Order accordingly.