Federal Tax Ombudsman (FTO) has ruled that the right of a taxpayer including refund claims cannot be denied on the plea of limitation or on any other technical plea.
The latest order of the FTO against the Federal Board of Revenue (FBR) revealed that this Complaint was filed against the Second Secretary (ST Operations), FBR Islamabad, and Commissioner-IR, Enforcement-Il, CTO Lahore, in terms of Section 10(1) of the Federal Tax Ombudsman Ordinance, 2000 (FTO Ordinance), for rejecting Complainant’s request of condonation under Section 74 of the Sales Tax Act, 1990 for the period April 2016.
According to an order of the FTO in the matter of the spinning mill, it is a settled principle of law that the right of a taxpayer cannot be denied on the plea of limitation or on any other technical plea as held by the Supreme Court of Pakistan in a judgment as under:
- “The denial of refund of the amount involved would be violative of Article 24(1) of the Constitution which lays down that “no person shall be deprived of his property save in accordance with law”.
- “latest judicial trend is to deprecate and to discourage withholding of a citizen’s money by a public functionary on the plea of limitation or on any other technical plea if it was not legally payable by him”.
Considering this, FTO held that there is no justification for the Deptt. to withhold the refund.
The findings of the FTO order revealed that the non-submission of the recommendation letter forwarded to FBR on behalf of CTO Lahore on the basis of which the Second Secretary (ST Operations), FBR Islamabad rejected the condonation request by not considering the genuine grounds/facts mentioned by the Complainant tantamount to maladministration in terms of Section 2(3) of the FTO Ordinance, 2000.
FTO has recommended the FBR to direct Member-IR (Operations) to revisit the condonation order and condone the delay and report compliance within 45 days.