The Federal Tax Ombudsman (FTO) has uncovered a case of severe maladministration involving tax officers from the Regional Tax Office (RTO) Rawalpindi, who subjected a female sales tax registered taxpayer to psychological distress. Acting swiftly on the complaint, the FTO has instructed the Federal Board of Revenue (FBR) to take immediate disciplinary action against the tax officers responsible for the repeated mismanagement of sales tax matters.
The FTO’s order highlighted the immense suffering endured by the taxpayer since 2011, labeling the case as one riddled with various forms of maladministration. The issue began when RTO Rawalpindi froze the taxpayer’s bank account and recovered Rs. 1,673,244 in sales tax without following proper legal procedures.
A detailed examination of the case raises significant concerns about the FBR’s operations. Initially, an audit officer imposed a tax demand of Rs. 2,552,008 for the 2009 and 2010 tax periods, citing three reasons: (i) failure to provide records, (ii) inconsistencies between Income Tax and Sales Tax returns, and (iii) discrepancies in the FBR Web Portal’s E-folder and the Sales Tax Return (STR) declaration.
READ MORE: Everything You Need to Know About the 23rd SCO Summit in Pakistan
After the Commissioner of Inland Revenue (CIR) rejected the taxpayer’s appeal on May 31, 2012, the department recovered Rs. 1,673,244 by attaching the taxpayer’s bank account on June 6, 2012, based on the third issue. The department later revised the recoverable amount to Rs. 1,674,321.
In compliance with the CIR Appeals-III Rawalpindi, the Assistant Commissioner of Inland Revenue (Audit & Enforcement), Unit-I (City Zone), RTO Rawalpindi, issued Sales Tax Order-in-Remand No. 40/2023-24, vacating the earlier liability of Rs. 1,624,321. The taxpayer’s representative, who had not received the order, was provided with a copy during the hearing.
The FTO has directed the FBR to initiate a fact-finding inquiry to identify the tax officers involved in the maladministration and instructed the Chief Commissioner of RTO Rawalpindi to issue a refund of the Rs. 1,673,244 already recovered from the taxpayer.
