Refund claim

Taxpayers, who were contractors falling under the purview of "Final Tax Regime (FTR)" by virtue of Ss.153(1)(c) & 169(b) of the Income Tax Ordinance, 2001 were required to file statement under S.115(4) of the Income Tax Ordinance, 2001; which they did so, but later on they also filed normal return of income under S.114 of the Income Tax Ordinance, 2001 for the purpose of claiming refund

Validity

Returns filed under normal law i.e. under S.114 of the Income Tax Ordinance, 2001, were altogether illegal and against the scheme of law

Taxpayers being contractors falling under the category of 'FTR' were only required to file statements under S.115(4) of the Income Tax Ordinance, 2001, without claiming any deduction

Appeals of the taxpayers were rejected and that of the department, were accepted.

Complainant, who had been regularly filing returns of income had filed return of income for the relevant year annually within due date

Department initiated proceedings under S.122-C of Income Tax Ordinance, 2001 and completed provisional assessment without proper service of notice on the ground that return was manually filed

Refund was claimed by the taxpayer through an application

Taxpayer/complainant, visited the department time and again and finally sent reminder, but refund was not processed

Ombudsman observed that if the department had the intention to verify the correctness of income and tax computation, or make some inquiry with regard to the processing of refund; it should have been completed within 30 days

Refund could not be withheld on the basis of anticipated liabilities, or prospective proceedings

Department could not withhold refund, unless some substantiated flaw was proved in the claim about its genuineness and accuracy

department's neglect, inattention and ineptitude in the discharge of duties for processing of refund, was tantamount to "maladministration" in terms of S.2(3)(ii) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000

Ombudsman recommended that, Federal Board of Revenue should direct the Commissioner to dispose of refund/compensation claim by providing opportunity of hearing to the complainant, in a transparent manner within 21 days; report of compliance within 7 days thereafter.

Importer was not supposed to file refund claim for paid amount of duty/taxes at the time of provisional determination of value by Department and if Department had encashed such security for meeting revenue target in absence of determination of value within stipulated period mentioned in S. 81(2) of the Customs Act, 1969, Department was duty bound to refund that amount without calling for an application for refund.

Importer, who had imported 26 consignments, claimed assessment under H.S. Codes 3920-2020 & 3920-2040, chargeable to statutory rate of customs duty at 25%

All consignments imported by the importer, were allowed, and released on the basis of such declaration; as importer at the relevant time was enjoying the facility of "ACP" (Automatic Clearance Procedure), without scrutiny of the documents, and examination of the goods

Importer after clearance of the goods, filed application for refund of customs duty in terms of S.33 of the Customs Act, 1969, on the ground that the goods imported by him, were appropriately classifiable under H.S. Code 3920-2030 chargeable to statutory rate of Customs Duty at 20%, as against H.S. Code 3920-2020 & 3920-2040 on which the importer had paid statutory rate of customs duty at 25%

Adjudicating Authority, rejected the claim of refund filed by the importer, vide order-in-original, against which the importer filed appeal and Appellate Authority, having dismissed appeal, importer filed further appeal before Customs Appellate Tribunal, who vide common order set aside orders passed by the forums below, and allowed the appeals of the importer

Validity

Appellate Tribunal had dealt with the factual aspects, as well as merits of the case, and had arrived at a definite findings of facts, which could not be questioned or agitated any further in the present Reference application of the department

Impugned order passed by the Customs Appellate Tribunal, being based on correct appraisal of facts and proper application of law, no exception could be drawn in that regard

Reference application, was dismissed, in circumstances.

Complainant filed refund claim under S.10 of Sales Tax Act, 1990 duly supported by complete copies of invoice of paid challans

Department deferred said claim without giving any cogent justification

Federal Board of Revenue, had failed to work out appropriate "modus operandi" for input tax adjustment in respect of Provincial Sales Tax on services collected by the service providers, assessed with Sindh Revenue Board which had led to inordinate delay, neglect, inattention, incompetence and inefficiency in the discharge of duties and responsibilities on the part of Federal Board of Revenue, which being a systemic issue needed to be addressed on priority basis

Inordinate delay on the part of Federal Board of Revenue to devise modalities for setting Sales Tax adjustment claims of the taxpayers, was tantamount to maladministration in terms of S.2(3) of Establishment of Office of Federal Tax Ombudsman Ordinance, 2000

Federal Board of Revenue was recommended, to provide database linkage as mutually agreed between Sindh Revenue Board and Federal Board of Revenue as to resolve the systemic issue; to direct the Chief Commissioner to process and settle the complainant's claims, as per law and report compliance within 30 days.