Recovery of CVT on foreign assets: SHC asks tax authorities to comply with relevant laws

ISLAMABAD: The Sindh High Court (SHC) has asked tax authorities that before proceeding for the recovery of the Capital Value Tax (CVT) amount on foreign assets, compliance of the law and the relevant provision, prescribed by the Federal Board of Revenue (FBR) shall be taken into consideration.

The petitioners’ counsel, in various CPs, filed a statement along with the notices, issued by the Deputy Commissioner-IR (HQ) to different petitioners, whereby, the petitioners are required to pay the CVT on foreign assets.

The petitioners’ counsel pleaded that no mechanism has been provided so far through the notification by the FBR as per clause (4) of sub-section (11) of Section 8 of the Finance Act, 2022, relating to the collection, recovery, and refund or any other matter in respect of the CVT.

He prayed that the impugned notices may be suspended. However, the court said that the matter will be examined on the next date of the hearing.

The SHC judge asked the respondents to ensure that before proceeding with the recovery of the amount of CVT on foreign assets, which is a subject matter of the instant petitions, the compliance of the law and the relevant provision relating to the charge of the CVT including time, mode, and manner for the collection and recovery, to be prescribed through notification by the FBR shall be taken into consideration. Khaleeq Ahmed, the deputy attorney general (DAG) in pursuant to the Court’s notice appeared before the court and sought time for filing the comments on behalf of the Federation. No one appeared on behalf of respondent No 2.

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The court noticed that the petitioners have not impleaded the concerned commissioner having jurisdiction over the cases of the petitioners.

The court allowed the petitioners to file the amended petitions by impleading the concerned commissioner as party within seven days, so that, the proper comments may be obtained, whereafter, notices may be repeated upon such respondents through first three modes. The bailiff was asked to submit a compliance report regarding the service upon the respondents along with courier delivery report on the next date. The case was adjourned for four weeks.

Copyright Business Recorder, 2022