FTO Directs FBR to Deregister Textile Factory Set on Fire in 2007

Federal Tax Ombudsman (FTO) Dr. Asif Mahmmad Jah has directed the Federal Board of Revenue (FBR) to deregister a textile factory in Karachi that was set on fire after the assassination of Benazir Bhutto in 2007.

FTO expressed shock at the delay in the deregistration of sales tax and keeping it pending for more than ten years despite the statutory limit of 90 days.

After the looting and arson of factory premises in 2007, the textile factory had to close its business and filed a deregistration application in the prescribed form ‘STR-3’ in 2012. The Commissioner should issue an order of deregistration or cancellation of the registration not later than ninety days from the date of such application.

According to the latest order of the FTO issued on Wednesday, the company had filed application for de-registration in 2008, but the FBR failed to deregister the factory.

The complaint is filed against the Commissioner-IR RTO-lI, Karachi, in terms of Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), for not deregistering the registration of the complainant despite the closure of business since 2008.

FTO findings revealed that the delay in de-registration of sales tax and keeping it pending for more than ten years despite the statutory limit of 90 days is tantamount to ‘maladministration’ under section 2(3)(i)(b) & (ii) of FTO Ordinance.

FTO has recommended the FBR to direct the Secretary Jurisdiction FBR to transfer the jurisdiction of the Complainant from RTO-II Karachi to CTO Karachi in terms of the FBR jurisdiction order dated 20-12-2020 and also in view of NOC issued by RTO-II Karachi on 15-12-2022 & by CTO Karachi on 22-12-2022. FTO directed the Chief Commissioner-IR, CTO, Karachi to deregister the complainant from sales tax in terms of Rule 11 of Sales Tax Rules 2006.

FTO has also directed the FBR to fix responsibility for inaction on the part of the Department for ten years and report compliance within 45 days.

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