Assessment of same vehicle on different values: FTO seeks explanation

LAHORE: The Federal Tax Ombudsman (FTO) has sought explanation from the Customs department regarding assessment of a vehicle with the same make and model on different values in two different collectorates, said sources.

According to details, it was brought to the notice of the FTO that the importer of the vehicle had allegedly re-exported the vehicle to avoid heavy import duty and re-imported the same in another Collectorate for clearance by declaring a fresh value of the same vehicle.

On the intervention of the FTO, the department had come to the conclusion that the system was not sufficient enough to tally the chassis number with previous record on all Pakistan basis and consequently the importer succeeded in clearing the vehicle on a lower value as per prevalent data with the active connivance of the clearing agent to deprive the national exchequer of its legitimate revenue.

While taking it as an offence of misdeclaration of value by presenting fake/concocted documents like invoice and allied documents, the department issued a show cause notice to the importer.

The importer challenged the notice while describing it as time barred with no legal consequence, as section 32(5) of the Customs Act, 1969 clearly specifies five year time limit from the date of goods declaration. In his case, the importer, maintained that the manual goods declaration was filed in 2013, while the show cause notice was issued in 2020, more than seven years after the goods declaration was filed. The maximum time period for any recovery under the Customs law is five years. As a result, the show cause notice lacks legal merit and was issued beyond the stipulated time period. He said the department had not provided any explanation for this significant delay.

When asked, the department could not substantiate the reason for issuance of time barred show cause notice.

The appellate forums maintained that once a matter become barred by time than subsequent enhancement in the period of limitation shall not have the effect of reopening the passed and closed transaction and resuscitating the matters which attained finality and had gone in the annals of history.

Copyright Business Recorder, 2024