Attachment of bank accounts: Software co gets amount recovered by tax department reimbursed

LAHORE: A software development company has succeeded in getting reimbursed the amount recovered by the tax department after the attachment of its bank accounts, said sources.

They said the taxpayer had proved that the tax authorities had initiated recovery proceedings before the expiry of time period set for adjudging the matter. The concerned tax officer had resorted to coercive measures after serving a notice of demand to the taxpayer, added the sources.

The taxpayer had challenged recovery notice issued by deputy commissioner Inland Revenue for forcible recovery of government dues from its bank account and the department carried out recovery proceedings in the middle of the adjudication proceedings.

According to details, the tax department issued a show-cause notice to the software company alleging that the latter has failed to charge and deposit Federal Excise Duty (FED) in respect of the payments made on account of technical service fee to its customers. The company denied the allegation while requesting for extension to reply the notice. However, the department without informing the taxpayer that his request for extension has been rejected raised a demand along with default surcharge and penalty.

In order to get the recovery proceedings restrained, the software company approached the appellate forums and also obtained restraining order but the department issued recovery notice along with the default surcharge and approached the relevant bank for attachment of accounts of the company.

But the concerned deputy commissioner allegedly issued a false statement to the bank that the stay granted by the court has expired.

He also pressurised the bank management and got a pay order against the controversial tax liability. The relevant forum took it as a coercive measure on the part of department against the taxpayer and declared it unlawful and of no legal effect.

The concerned deputy commissioner was ordered to ensure that the amount recovered from the taxpayer’s bank account is reimbursed without delay. The software company had established the point that no recovery proceedings should be initiated till a decision has come from the appellate tribunal.

Copyright Business Recorder, 2024