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2012 PTD 1632 FEDERAL-TAX-OMBUDSMAN-PAKISTAN Judicial Precedent

Ss.170 & 171Establishment of the Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)(ii)RefundAdvertisement mediaManufacturing and supply of advertisement media like sign boards, billboards and hoardings

Refund arose on account of excess deduction of income tax at source on payments made for the manufacture and supply of said advertisement media like sign boards etc.

Department contended that refund application was liable to be rejected as the electricity tariff(A2) was for domestic use and did not bear out that the taxpayer was a manufacturer/ supplier of goods

Taxpayer explained that the process of preparing signboards, billboards and hoardings involved cutting, welding and shaping iron angles and preparing flex skin sheets for which an industrial electricity connection was not required; and expert workers were employed to cut, shape and frame the iron and flex sheets by hand; and where necessary, gas welding plant was used for which no electricity was required

Validity

Record indicated that the taxpayer was a manufacturer/supplier and tax deducted at source was required to be adjusted against tax liability due

Chief Commissioner reached a decision that the taxpayer was a manufacturer/supplier of advertisement media

Refund had been held up without any justification for more than three years

Delay in issuance of refund was tantamount to maladministration

Delay also created the right to receive compensation

Federal Tax Ombudsman recommen-ded that Federal Board of Revenue to direct the Chief Commis-sioner to issue refund/compensation due, as per law, within 15 days.