Law: Sales Tax Rules, 2006

Section: 36

Sales Tax Rules, 2006---R. 36---SRO 555(I)/2006, dated 05.06.2006---Post-sanction audit of refund claims---Notice, issuance of---Scope---Deputy Commissioner or Commissioner Inland Revenue, Powers of---Scope---Petitioners (companies/registered taxpayers) invoked constitutional jurisdiction of the High Court contending that the impugned notices had been issued by Deputy Commissioner, whereas, R.36 of the Sales Tax Rules, 2006, and the proviso thereof, required that Commissioner Inland Revenue had to carry out such exercise; hence, the impugned notices were without lawful authority and jurisdiction---Validity---Petitioners sought refund of Sales Tax in terms of various online facilities introduced by FBR from time to time (STARR/ERS/FASTER), through which the refunds were processed, sanctioned and paid through Online Portal of FBR---Admittedly, all such refund claims had never been audited prior to its sanction and payment thereof---Rule 36 of Sales Tax Rules, 2006, provides a mechanism for post-sanction audit of such refund claims---In the present case, the plea of the Petitioners was misconceived as the said proviso reads that where the Commissioner Inland Revenue had reason to believe, on the basis of some information, pre-determined criteria or otherwise, that a registered person, whose refund claim was processed or sanctioned after 30.06.2014, had been paid refund which was not admissible, he might direct through order in writing to conduct manual post-refund scrutiny of such claim, which was to be done by the Commissioner Inland Revenue by way of an administrative order and it did not, ipso facto mean that the audit was also to be conducted by the Commissioner himself; it only required an order by him to direct manual post-audit and scrutiny of the claim and if even if no such order for conducting manual audit had been issued by him, it could also be done post facto---Even otherwise, mere selection for audit does not cause an actionable injury to the Tax-payer---Admittedly, the petitioners had obtained refund of Sales Tax without going through the process of audit through Online Portal of FBR and in such case, if any audit was directed under R.36 of the…

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