The President has set aside the recommendations of Federal Tax Ombudsman (FTO) in a complaint by Razaque Steel against the Central Board of Revenue (CBR), and observed that the role of the FTO is to identify maladministration defined in the FTO Ordinance. Its jurisdiction is administrative and it should not decide legal questions under that jurisdiction. Responding to the representation made by CBR the President's Order, vide Law and Justice Division letter No 33/2004-FTO Law dated April 19,2005, said that maladministration as defined in section 2 (3) of the FTO Ordinance connotes some misbehaviour such as bias, perversion, targeted malice or corrupt motives etc.
It is specifically provided, the Order continues, that a decision against law shall amount to maladministration only if it is shown that it is mala fide. The matter raised in the complaint is a pure legal question. No element of misbehaviour is discernable.
The Order further provides that the FTO's jurisdiction is administrative. Legal questions ought not to be decided under that jurisdiction. They must be reserved for judicial jurisdiction.
"This is for the deference we must show to judicial branch. The department can not contest the President's decision. The President's wrong decision on point of law may set wrong precedent. Access to justice demands that legal issues are determined by the judicial branch of the State," the Presidential Order emphasised.
According to details of the case, the complainant made supplies of iron bars for construction of buildings in Export Processing Zone. He pleaded that the supplies should be deemed exports on zero rated duty. The Sales Tax department contended that the supplies were taxable under Sales Tax Act.
The FTO supported the complainant's plea and recommended that CBR should grant zero rated facility to the supplies.
The complainant also raised preliminary objection on the representation and said that the representation filed by the Collector was incompetent and also time-barred. He contended that under section 32 of the FTO Ordinance 2000, only the Revenue Division and not the Collector could make a representation to the President.
Responding to the complainant's plea the Presidential Order said that the definition of Revenue Division includes all its subordinate departments, offices and agencies. The Collector has certified that FTO's findings were received in his office on 23-12-2003 and the representation, received in the Law Division on 22-1-2004, was thus within time.
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