LAHROE: The Federal Tax Ombudsman (FTO) has expressed concerns over the coercive recovery measures by tax collectors, saying that discretionary steps of tax officials are not acceptable and therefore the Federal Board of Revenue (FBR) should take notice of the practice.

According to the FTO sources, the Ombudsman has directed the Board to conduct enquiry, fix responsibility and initiate disciplinary proceedings against the officials found responsible for making unlawful recovery of the amount from a complainant's bank account. Also, it has required from the Board to settle illegally recovered refund from the complainant's bank account along with payment for delayed refund.

According to the FTO's report, one commissioner lnland Revenue had recovered Rs.0.810 million illegally from the complainant's bank account along with payment for delayed refund under Section 67 as per law to settle refund. The report has pointed out that unlawful recovery through attachment of complainant's bank account and delay, unjust and oppressive acts in settlement of refund, is tantamount to maladministration.

It may be noted that the Board had created sales tax demand amounting to Rs25.475 million against a complainant who was engaged in manufacturing and sale of Poly propylene products. After losing case before the collector the complainant filed second appeal. The Appellate Tribunal, Inland Revenue, Lahore (ATIR) decided the appeal in favour of the complainant but FBR filed reference before the Lahore High Court. The Lahore High Court also upheld decision of the ATIR, but in the meanwhile FBR recovered Rs.0.604, Rs.0.023 and Rs.0.183 million, (total Rs.0.810 million) by attaching bank account of the Complainant.

The Complainant again approached FBR but failed to evoke any response, hence, filed complaint with FTO and also prayed for additional payment for delayed refund under Section 67of the Sales Tax Act, 1990.

After hearing FBR and the complainant, the FTO found that even after decisions of the ATIR and High Court the FBR initiated coercive measures and attached bank accounts of the complainant. The FTO in its report has stated that evidently, this is a case of unlawful recovery made by the FBR through coercive measures of attachment of complainant's bank account. FBR remained sleeping over the matter as not even a single correspondence was made with the complainant. It is after filing of the instant complaint that the FBR woke up from deep slumber and instead of redressing grievance of the aggrieved complainant, raised objection regarding late filing of refund application.

Copyright Business Recorder, 2021