The Federal Value Added Tax (VAT) Act 2010 would empower the officials of Inland Revenue to reject VAT refund, input tax adjustment or drawback of tax in suspected cases through process of adjudication from July 1, 2010. The cases involving rejection of refund of Value Added Tax (VAT) would be adjudicated by the officer of Inland Revenue authorised to sanction refund under the Federal VAT Act 2010.
Sources told Business Recorder on Thursday that the Federal VAT Act 2010 has introduced a new section 77 to specify adjudication powers of the Inland Revenue official. A new section 88 has also empowered the Inland Revenue officials to check payments of inadmissible VAT refunds through adjudication.
"Where an Inland Revenue official suspects or believes that any claim for adjustment, refund, repayment or drawback of tax has been made on the basis of any document suspected not to be genuine, true or correct, he may reject such claim through the process of adjudication without prejudice to any other action which may be taken against the claimant under the law," it added.
Powers of adjudication in case of imported goods: In the case of imports, all powers and processes of adjudication, appeal, reference to High Court and all allied matters shall be exercised or conducted under the Customs Act and, for this purpose, the relevant provisions of the Customs Act shall mutatis mutandis apply, including the jurisdiction and powers of the adjudicating authorities under the Customs Act.
Powers of adjudication: The cases involving assessment of tax and determination of tax liability, including those detected through audit and inadmissible refund shall be adjudicated by an officer of Inland Revenue not below the rank of Assistant Commissioner in the Large Taxpayer Unit (LTU) or, as the case may be, Regional Tax Office (RTO) as may be authorised by the Commissioner through a, general or special order.
The cases of non-filing or late filing of returns or short-payment of tax may be adjudicated upon by such officer as may be authorised by the Commissioner. Under the Federal VAT Act 2010, the cases involving rejection of refund shall be adjudicated by the officer of Inland Revenue authorised to sanction refund. The Commissioner may assume power to adjudicate any case falling within the jurisdiction of any Inland Revenue officer subordinate to him.
The Board may change the jurisdiction or powers of any officer of Inland Revenue or class of such officers. The Board or Commissioner may on its or his own or otherwise examine the record of any case or proceedings for the purpose of satisfying itself or himself as to the legality or propriety of any decision or order passed therein by any subordinate officer of Inland Revenue and pass such order as it or he may think.
Provided that no order imposing or enhancing any penalty or fine or requiring payment of a greater amount of tax than originally determined shall be passed unless the affected person has been given an opportunity of showing cause and of being heard and no case shall be so examined where an appeal is pending before the Appellate Tribunal.
No order shall be made under this section after the expiry of five years from the date of the original decision or order. Appeal to Commissioner Inland Revenue (Appeals).- (1) Any person, other than the Inland Revenue; aggrieved by any adjudication order passed by an officer of Inland Revenue up to the rank of Additional Commissioner may, within thirty days of the date of receipt of such order, prefer an appeal to the Commissioner (Appeals).
Provided that an appeal preferred after the expiry of thirty days may be admitted by the Commissioner (Appeals) if he is satisfied that the appellant has sufficient cause for not preferring the appeal within the specified period. The appeal shall be accompanied by a fee of one thousand rupees to be paid in a manner specified by the Board.
The Commissioner (Appeals) may after hearing the parties to the appeal, pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the order appealed against; provided that he shall not remand the case for outright de novo consideration at original stage.
An order under sub-section (4) shall be passed not later than ninety days from the date of filing of appeal, which period may be extended further for ninety days by the Commissioner (Appeals) for reasons to be recorded in writing. In deciding an appeal, the Commissioner (Appeals) may make or cause to be mad such further audit, enquiry or verification as may be necessary.