The Large Taxpayer Unit (LTU) has refunded rupees three million to the Sui Southern Gas Company (SSGC) and declared that there was no liability against the company since 1998.
According to details, following instructions from the Central Board of Revenue (CBR) on December 14, 1998, the then Sales Tax Collector, West Karachi, had deputed an audit team to conduct audit of all purchases made by the company from July 1993 to November 1998.
On the directive of the Sales Tax Collector, the SSGC made an ad hoc payment of the sales tax, amounting to rupees three million in December 1998.
The amount was subject to adjustment against sales tax payable by the company after scrutiny of the record by the Sales Tax department.
The company, therefore, requested that the same amount might either be adjusted against their sales tax liability or be refunded, as the amount was lying unadjusted in the company's books.
After completion of the audit in 1998, no liability was communicated to the SSGC by the department. Consequently, the company requested the Sales Tax department to refund or adjust the amount.
The LTU, which deals with the Sales Tax cases of large companies, took up the case and accordingly retrieved files from the Sales Tax House, which revealed that apparently no action had been taken regarding the case after November 2001.
Hence, neither the sales tax liability of the SSGC had been finally determined nor the amount in question was refunded to them.
After reopening the case, communications were made with the SSGC, Sales Tax House and Lahore Collectorate to finalise the investigations.
However, thorough investigations, the LTU reached the conclusion that in the absence of any adjudicated liability, the recovery of rupees three million was not justified and the same should be refunded to the SSGC.
The case is one of the rare examples in which large amount unduly recovered from the taxpayers had been refunded after a judicious investigation of the case.