Law: Sales Tax Act, 1990

Section: 10(2),67

Law: Sales Tax Refund Rules, 2000

Section: 6,7(2)

Law: Federal Tax Ombudsman Ordinance, 2000

Section: 2(3)

Sales Tax Act (VII of 1990)--Ss. 10(2) & 67 Sales Tax Refund Rules, 2000, Rr. 6 & 7(2) C.B.R. Letter C,,No.2(7) STP/99 PT dated 1-1 2003 S.R.O. 417(I)/2000 ¬Establishment of Office of Federal Tax Ombudsman Ordinance (XXXV of 2000), S.2(3) Refund of excess amount of input tax Withholding of total amount of refund due to few fake invoices or issued by the suspected units Validity Central Board of Revenue in its Letter C.No.2(7)STP/99 PT dated 1 1 2003 observed that it would not be justified to reject a claim just because a few invoices were found to be fake or were issued by the suspected units; that the appropriate course in such case would be to disallow the refund claim to the extent of fake invoices and sanction the remaining amount, and if a refund claim was supported by tax invoices of suspected units; a show cause notice be issued before deciding the admissibility of the claim under the law Said Instructions were ignored by the Sales Tax Authorities Federal Tax Ombudsman recommended that Central Board of Revenue to direct the Collector Sales Tax (West)., Karachi to get the invoices re verified from the Collectorate within thirty days and in case the genuineness of the invoices is not established issue, show cause notice to the complainant and decide the refund claim within two months. FINDINGS/DECISION The complaint has been filed against the Sales Tax Department for inordinate delay in deciding the claim for refund of sales tax. The complainants have stated that they had purchased textile made ups and paid sales tax Rs.10,60,756.20 in August, 2001 and the invoices were verified by the Collectorate (of the suppliers). They exported the goods and filed refund claims on 21 12 2001 to the Collectorate of Sales Tax (West), Karachi, but the same have not been allowed. The complainants stated that instead of honouring the refund claim in full, the Collectorate sent them a letter dated 1 4 2002 that their refund claims had been withheld for want of verification. 2. The complainants stated that the invoices pertaining to their refund claims had already been verified. In section 10(2) of the Sales Tax Act, it has been laid down that "input, tax incurred in…

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