2013 PLP 534 (PTD)

2 7/2004 633/LB/2009 27-5-2010 56,702 19-8-2010 3 10/2004 184/LB/2009 3-5-2010 72,323 19-8-2010 4 6/2004 829/LB/2009 6-9-2010 214,107 3-11-2010 Total: Rs.624,978

2. According to the complainant, the adjudicating authority deferred/rejected the claims. Feeling aggrieved, he filed an appeal with Collector (Appeals), Faisalabad, which was rejected. Then he filed an appeal before the Appellate Tribunal. The appeal was accepted, allowing the refund claims.

3. After filing the refund applications under section 66 of the Sales Tax Act, 1990 (the Act) on 5-4-2010, 19-8-2010 and 3-11-2010, the Complainant sent reminders dated 2-10-2012, 16-10-2012 and 30-10-2012, but the refund was not issued within the time prescribed under law.

4. When confronted, the department contended that the claims involving refund were pending due to STARR objections. The supportive documents such as invoice summary, evidence of payment and bank statement required for removing STARR objections were not filed along with the refund claim. Moreover, the claims were not made in accordance with the provisions of Section 66 of the Act, read with Refund Rule 38(3) as notified vide S.R.O.555(I)/2006 dated 5-6-2006. The claims under section 66 of the Act could not be sanctioned merely on the basis of order-in-appeal. Documentary evidence was essential for processing the claim. The complainant was required to provide the details of pending refunds along with the supportive documents. In response, the complainant provided documents on 15-11-2012. On receipt of documents, the claims were restored in the system, and the process of verification initiated.

5. During hearing, the DR reiterated the written comments. According to him, there was no maladministration involved in the case. However, he could not show that the Commissioner was prevented by sufficient cause to decide the complainant's refund claim within the prescribed time. Nor could he give any cogent reason as to why non-submission of evidence/documents was not conveyed by the Deptt. immediately on receipt of refund application. However, he assured that refund due would be issued as soon as the verification was complete.

6. As regards the compensation, the Deptt. contended that compensation was not payable as the refunds were created and claimed under section 66 of the Act, as a result of the orders of the Appellate Tribunal.

7. The Tribunal's orders were passed during the period from 16-9-2009 to 6-9-2010, but had not been implemented so far. The denial of compensation for no fault of the complainant is both unfair and unreasonable. Findings:

8. The delay in disposal of refund claims is tantamount to maladministration under section 2(3)(ii) of the FTO Ordinance. Recommendations:

9. FBR to direct the Chief Commissioner to-- (i) sanction refund/compensation due, as per law; and (ii) report compliance within 30 days. CMA/10/FTO Order accordingly.