| Case ID |
0b0e829f-22aa-4dcf-af17-41b64cee308f |
| Body |
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| Case Number |
Complaints Nos. 1570/L and 1567/L of 2001 |
| Decision Date |
Dec 31, 2001 |
| Hearing Date |
|
| Decision |
In this case, the Federal Tax Ombudsman, presided over by Justice (RTD.) Saleem Akhtar, addressed the complaints lodged by Messrs POLY PACK (PVT.) LIMITED against the Secretary of the Revenue Division, Islamabad. The core issue revolved around the unlawful withholding of a tax refund amounting to Rs.7,175,575 for the assessment year 1998-99. The Department had withheld the refund citing a proposed reference under section 136(1) of the Income Tax Ordinance, 1979. However, the Ombudsman found that the reference application had not matured, as only a proposal had been made without a concrete decision, necessitating further legal proceedings. The Department's actions were deemed as 'maladministration' under section 2(3)(ii) of the Federal Tax Ombudsman Ordinance, 2000. Consequently, the Ombudsman recommended the immediate issuance of the refund along with a compensation of 15% as per section 102 of the Income Tax Ordinance, 1979. Additionally, instructions were given to the Department to exercise caution when invoking section 103 to prevent the abuse of this provision for unjustifiably delaying refunds. The decision underscores the importance of adhering to legal procedures and safeguarding the rights of taxpayers against administrative inefficiencies. |
| Summary |
The case of Complaints Nos. 1570/L and 1567/L of 2001, cited as 2002 SLD 117 and 2002 PTD 824, involves Messrs POLY PACK (PVT.) LIMITED filing a grievance against the Secretary of the Revenue Division, Islamabad. The dispute centers on the withholding of a significant tax refund amounting to Rs.7,175,575 for the assessment year 1998-99, which was authorized by the Appellate Tribunal on 23rd October 2001. The Department withheld the refund, citing financial difficulties faced by the complainant and a proposed reference under section 136(1) of the Income Tax Ordinance, 1979. However, the Federal Tax Ombudsman, under the leadership of Justice (RTD.) Saleem Akhtar, determined that the reference application was premature, as only a proposal had been made without a finalized decision requiring further legal deliberation by the Appellate Tribunal and the High Court. This premature action constituted 'maladministration' under section 2(3)(ii) of the Federal Tax Ombudsman Ordinance, 2000. The Ombudsman recommended the immediate release of the refund, reduced to Rs.5,359,603 after consensual adjustments, along with a 15% compensation as stipulated in section 102 of the Income Tax Ordinance, 1979. Furthermore, the Department was instructed to exercise utmost caution when applying section 103 to prevent the misuse of this provision for unjustified delays in issuing legitimate refunds. The decision reinforces the accountability of tax authorities and the protection of taxpayer rights, ensuring that administrative procedures comply with established legal frameworks. This case highlights the critical role of the Federal Tax Ombudsman in overseeing and rectifying administrative inefficiencies within the tax system, promoting transparency, and safeguarding the interests of taxpayers. It serves as a precedent for future cases involving the withholding of tax refunds and the proper application of legal provisions to prevent arbitrary administrative actions. The ruling also emphasizes the necessity for tax departments to adhere strictly to procedural requirements before initiating any withholding actions, thereby fostering trust and reliability in the tax administration process. Overall, this landmark decision underscores the importance of due process and the effective functioning of oversight institutions in maintaining justice and fairness within the tax system of Pakistan. |
| Court |
Federal Tax Ombudsman
|
| Entities Involved |
Department,
Federal Tax Ombudsman,
Secretary, Revenue Division, Islamabad,
Messrs POLY PACK (PVT.) LIMITED,
Syed Aqeel Raza,
Syed Mahmood Jafri
|
| Judges |
Justice (RTD.) Saleem Akhtar
|
| Lawyers |
Syed Aqeel Raza,
Syed Mahmood Jafri
|
| Petitioners |
Messrs POLY PACK (PVT.) LIMITED
|
| Respondents |
Secretary, Revenue Division, Islamabad
|
| Citations |
2002 SLD 117,
2002 PTD 824
|
| Other Citations |
1995 PTD 749
|
| Laws Involved |
Federal Tax Ombudsman Ordinance, 2000,
Income Tax Ordinance, 1979
|
| Sections |
2(3)(ii),
9(ii)(a),
102,
103,
136(1)
|