Law: Sales Tax Act, 1990

Section: 7,7(2),36(3)

(a) Sales Tax Act (VII of 1990)---Ss. 7(2) & 36(3)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---Determination of tax liability---Audit observation against entitlement to claim input tax by the Revenue Receipt Audit staff---Complainant stated that they had disposed of scrap/assets machinery through open auction and deposited advance sales tax on estimated weight---On actual weightment, weight was short and more amount of tax had been deposited than the actual tax payable---Such amount was adjusted instead of applying for refund---Sales tax had been paid and excess amount was adjusted through a bona fide mistake causing no loss to revenue---Validity---Whole exercise of issue of demand, show-cause notice and adjudication order was contrary to law, it was perverse in character, it was unjust and oppressive, based on irrelevant grounds, it was a case of inordinate delay, incompetence, inefficiency and miscarriage of administrative justice---No evasion of sales tax had occurred and no shortfall was in its recovery, and the demand for additional tax and penalty had no justification---Charge of maladministration was established against the sales tax authorities--Federal Tax Ombudsman recommended that Central Board of Revenue set aside the order in question passed by the Deputy Collector (Adjudication). 1993 MLD 1654 ref. (b) Sales Tax Act (VII of 1990)----S.36(3)---Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000)---Recovery of tax not levied or short-levied or erroneously refunded---Limitation---Inordinate delay---Argument of the Department that time limit fixed under subsection (3) of S.36 of the Sales Tax Act, 1990 was merely directory in nature and not mandatory could not be cited as justification for inordinate delay in passing an order which on merits did not meet the test of law. FINDINGS/DECISION JUSTICE (RETD.) SALEEM AKHTAR (FEDERAL TAX OMBUDSMAN).---The Pakistan Mineral Development Corporation (PMDC), an autonomous Corporation under the administrative control of Federal Ministry of Petroleum and Natural Resources with head office at Islamabad, have stated that they are a large taxpayer on coal…

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