Law: Sales Tax Rules, 2006

Section: 11

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3),9(1),10

Sales Tax Rules, 2006- -R.11-Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), Ss.10, 9(1) & 2(3)-Jurisdiction, functions and powers of Federal Tax Ombudsman-Own motion complaint- Maladministration-Bogus sales tax refunds-Own motion complaint against maladministration committed by Department and its officials in field formations, in processing and sanctioning of bogus sales tax refunds-Federal Tax Ombudsman observed that registration of persons and issuance of refunds was not a simple task but required teamwork involving not only main beneficiaries but also connivers in the Department-Failure of Departmental officials in retrieving huge loss of revenue due to bogus sales tax refund and not initiating action against culprits was a case of gross maladministration-Federal Tax Ombudsman recommended to the Department to direct Chief Commissioner to identity and take actions against officials who failed to take action against tax evaded and who delayed suspension of registered persons and initiate criminal proceedings to recover evaded tax - Complaint was disposed of, accordingly. FINDINGS/RECOMMENDATIONS MUSHTAQ AHMAD SUKHERA, FEDERAL TAX OMBUDSMAN.-This is an own motion investigation initiated while exercising powers conferred under section 9(1) of the Federal Tax Ombudsman Ordinance, 2000 to investigate irregularities committed by the FBR field formations in processing and sanctioning of bogus sales tax refunds during the period 2011-14 identified by Directorate General I&I- IR, FBR. The Red Alerts in such cases were issued to the field formations concerned but neither any action was initiated against the fake claimants and their connivers in the Deptt., who were involved in bogus registration, processing and sanctioning of fraudulent refund and issuance of refund cheques, nor was any action proposed against the related officers/officials of bank branches concerned and PRAL management. 2. In the case of M/s Hanata Trading STRN 1700324365418, a Registered Person (RP) engaged in the manufacturing of textile goods, the investigation conducted by I&I-IR, Karachi, revealed that: i) the RP filed bogus/dubious refund claim of…

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