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 the Federal Tax Ombudsman--Own motion complaint--Maladministration--Bogus sales tax refunds--Misuse of SROs--Own motion complaint against maladministration committed Department and its officials in field formations, in processing and sanctioning of bogus sales tax refunds---Federal Tax Ombudsman observed that despite receipt of Red Alert, Department failed to process sales tax refunds or initiate action to determine tax liability and it failed to start proceedings to recover short-levied sales tax / value added tax on imports through misuse of concessionary SROs-- conduct was criminal negligence and 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 through misuse of SROs and initiate criminal proceedings to recover evaded tax--Complaint was disposed of, accordingly. FINDINGS/RECOMMENDATIONS MUSHTAQ AHMED 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 of FBR. The Red Alerts in such case 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 Messrs Fab Tex Industries STRN 1700400008219 NTNo. 4000082-6, Registered Person (RP) engaged in the manufacturing of other textiles N.E.C, the investigation conducted by I&I-IR, FBR, revealed that: (i) the RP was registered as manufacturer…

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