Law: Sales Tax Act, 1990

Section: 3

Sales Tax Act (VII of 1990)--S.3---Establishment of the Office of Federal Tax Ombudsman Ordinance, (XXXV of 2000), S.2 (3)---Scope of tax---Mal­administration---Income from providing and rendering of consultancy services---Taxpayer contended that Assistant Commissioner deliberately and wilfully issued a show-cause notice for levy of sales tax on the income derived from providing and rendering of consultancy services which were otherwise not falling in the ambit of Sales Tax Act, 1990; and .detailed reply along with specimen of invoices for providing consultancy services were submitted, but the Assistant Commissioner dismissed the reply without seeking any additional information or providing adequate opportunity of hearing just to create frivolous and arbitrary demand to meet the revenue targets of Federal Board of Revenue---Taxpayers who had produced relevant records requested that Departmental Representative may examine the records before advancing arguments---Validity---After thorough examination of record, Departmental Representative was willing to rectify the order-in-­original, provided the complainant supplied photocopies of invoices of consultancy services---Order-in-original was evidently arbitrary, oppressive, and passed without applying proper care and due diligence, which tantamounted to maladministration---Federal Tax Ombudsman recommended that Federal Board of Revenue (i) direct the concerned Commissioner, to call for the record and rectify the impugned order-in-­original under S.45A of the Sales Tax Act, 1990 (ii) issue instructions through a Sales Tax General Order that declarations made in the Income Tax Returns shall not be made basis for assessment of Sales Tax unless the registered person is provided a reasonable opportunity of hearing and the advance income withheld duly shown in the Income Tax Return is accounted for. FINDINGS/RECOMMENDATIONS DR. MUHAMMAD SHOAIB SUDDLE (FEDERAL TAX OMBUDSMAN).---This complaint is directed against the Order-in-Original No.41 of 2011 dated 31-5-2011 passed by Assistant Commissioner, Audit Div-II, Zone-II, RTO, Islamabad, alleging that the impugned order is arbitrary, oppressive and has been passed in utter…

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