The Auditor General of Pakistan (AGP) has said that the Federal Board of Revenue authorities fail to provide record of assessment of sales tax and federal excise duty for audit purposes. The AGP in audit report on accounts of FBR stated according to Articles 169 and 170 of the Constitution, the Auditor-General of Pakistan is empowered to conduct audit of receipts.
The officer in-charge of any office or department shall afford all facilities and provide record for audit inspection and comply with requests for information in as complete a form as possible and with all reasonable expedition. Any person or authority hindering the audit function of the Auditor-General regarding inspection of accounts shall be subject to disciplinary action under relevant Efficiency and Discipline Rules.
In violation of above constitutional provisions, the Audit faced non co-operation rather hindrance, on the part of FBR authorities in the matter of production of record, rendering it unable to discharge its constitutional role. A few instances of the nature are discussed in the following paragraphs. Audit selected 2,703 out of 109,198 cases through desk audit for detailed audit but fifteen field formations of FBR did not produce auditable record, even in a single case, despite pursuance by Audit. The non-production of record is a serious violation of law (Constitution) and hindrance in performance of functions of the Auditor-General of Pakistan.
The responsibility for preventing the Audit from discharging its statutory duties needs to be fixed on the officers/officials responsible for it and disciplinary proceedings under the relevant E&D Rules need to be initiated against them. The lapse was repeatedly pointed out to the concerned quarters during July to November, 2011. RTOs/LTUs informed that they were not producing record in compliance with instructions issued by FBR vide its letter No 1/801S/LITA/09 September, 08 2010.
RTOs/LTUs further informed that the matter regarding production of record had already been referred by the FBR to the Law and Justice Division in August, 2010 to which a reply was awaited. In the DAC meeting held in January 2012, the department replied that the matter was sub judice before Supreme Court of Pakistan and that further deliberation be made as and when the judgement is passed by the Apex Court. The Audit is of the view that the plea of the department about the matter being sub judice before the Apex Court is not tenable being based upon judgement of the Peshawar High Court dated ~ September, 2008 which was result of misrepresentation of facts to the Court regarding audit by the Auditor-General of Pakistan of assessment record of the registered persons. This judgement pertained to a case under tax laws which have been repealed and are no more in practice. Moreover, it was in a specific case having no general applications. Subsequently, on the basis of this judgement, three registered persons of RTO, Islamabad challenged the mandate of the Auditor-General of Pakistan before Lahore High Court, Rawalpindi Bench.
The Lahore High Court did not accept the plea of the petitioners and held that the Auditor-General''s Department had the mandate to ask the FBR and its subordinate offices to summon the sales tax record maintained by the registered persons under the Sales Tax Act, 1990. Consequent upon the judgement of the Lahore High Court, FBR filed three CPLAs although neither the Federation nor the FBR was an aggrieved party. The aggrieved party in this judgement was the registered persons. Thus the FBR filed CPLAs at expense of the government to protect interest of the registered persons, making the Audit and its own RTOs as pro forma respondents.
Further Rules of Business of the Federal Government require that inter-ministerial disputes be resolved through the Law and Justice Division. On a reference made by the FBR itself, the Law & Justice Division opined on May, 19 2008 that the Auditor-General of Pakistan has the jurisdiction to audit the sales tax record required to be maintained by registered persons under section 22 of the Sales Tax Act, 1990. On another reference made by the Audit, the Law and Justice Division on February, 14 2011 reaffirmed their earlier opinion. The stance of the Audit affirmed by the opinion of the Law and Justice division was fully endorsed by the PAC twice. It is worth mentioning that there is no verdict from any court against the Audit mandate. Rather, various judicial fora including Federal Tax Ombudsman and Appellate Tribunal Customs, Sales Tax and Federal Excise also upheld the mandate of Auditor-General of Pakistan.
Keeping in view the above facts, one tends to conclude that the FBR has hindered the Auditor-General''s department to discharge its constitutional functions to avoid accountability. This deprived the government of obvious benefits in the shape of cash recoveries at the instance of Audit. The matter therefore, deserves an immediate attention at higher level for fixing responsibility and taking appropriate action to resolve it.
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