Law: Sales Tax Act, 1990

Section: 10,67

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)(ii)

Sales Tax Act (VII of 1990)---Ss. 10 & 67---S.R.O. 549(I)/2008 dated 11-6-2008, S.Nos.3 & 7---Establishment of the Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3)(ii)---Refund of input tax---Appellate Tribunal held unequivocally that refund of input tax was due to the taxpayer and should be paid---Department had held back on issuance of the refund due---Department contended that reference had been filed against the order of Appellate Tribunal before the High Court, no stay against order of the Appellate Tribunal had been granted; and legal issues / law points arising from the of Appellate Tribunal needed to be resolved, before taking up the refund issue---Validity---Reference before the High Court against the Appellate Tribunal's order could not act as a bar against disbursement of input tax refund due to the taxpayer---Delay in issuance of refund as a consequence of giving appeal effect to the order of Appellate Tribunal was tantamount to maladministration---Delay also created the right to receive compensation under S.67 of the Sales Tax Act, 1990---Federal Tax Ombudsman recommended the Federal Board of Revenue to direct the Chief Commissioner to decide refund/compensation due, in accordance with law, without prejudice to the outcome of proceedings before the High Court. Complaint Nos.1272-K of 2007 and 1274 of 2007; Representation No.52/08-Law (FTO) and No.53/08-Law (FTO) dated 27-5-2009 rel. FINDINGS/RECOMMENDATIONS DR. MUHAMMAD SHOAIB SUDDLE, (FEDERAL TAX OMBUDSMAN).---This complaint is against non-issuance of sales tax input refund of Rs.8,525,028 as per one refund claim dated 13-1-2011 and seven claims dated 25-5-2011 pertaining to tax periods 6/2008, 7/2008, 8/2008, 9/2008/2008, 11/2008, 1/2009, 2/2009 and 3/2009. 2. The complainant is a (Pvt.) Ltd. Company engaged in the manufacture and supply of concrete shelters to house machinery used in the purification of water for human consumption. Supplies of such special purpose housing units are zero rated having been manufactured against international tender. The manufacturer is allowed to claim refund of sales tax paid on inputs utilized in their manufacture. These shelters are an…

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