Refund from CTO Lahore: LHC stops FBR from passing order against taxpayer

ISLAMABAD: Lahore High Court (LHC) has stopped the Federal Board of Revenue (FBR) from passing an order against a taxpayer seeking refund from Corporate Tax Office (CTO) Lahore and issued notices to top FBR officials.

Justice Jawad Hassan passed the order while hearing a petition filed by a taxpayer seeking refunds from CTO Lahore and challenging notices by the CTO to reject the lawful claims of refunds on flimsy grounds.

In this case, the LHC has issued notices to the Chairman FBR, Member Operations (IR), Director General of Training & Research Inland Revenue and Assistant Commissioner CTO Lahore for submission of report/comments.

The LHC order stated that the petitioner through this petition under Article 199 of the constitution has challenged the proceedings being conducted by the ACIR in terms of section 170(4) of the Income Tax Ordinance, 2001. Waheed Shahzad Butt, Advocate submits that the aforesaid proceedings are illegal.

Advocate further submitted that the petitioner being a registered taxpayer filed an application for refund but instead of passing an order, the department has initiated proceedings against him through the impugned notice by misusing the provisions contained in sub-section (4) of section 170.

When confronted how writ is maintainable because if the Commissioner is satisfied under section 170(3) that tax has been overpaid, he can pass an order in writing within sixty days of receipt of a refund application. Waheed Shahzad Butt, Advocate submitted that the Commissioner can only pass a decision whether the taxpayer is entitled for refund or not and no proceedings can be initiated under this provision of law.

The petitioner questioned the patently illegal and unconstitutional acts of tax officials to impose heavy taxes unlawfully by misusing the provisions of fiscal statutes in terms of section 170(4) in violations of the directions of higher judiciary.

LHC added that the law officer appearing on behalf of the FBR will seek instructions from the relevant quarter(s) and also ensure submission of repost and para-wise comments fortnight. No final order shall be passed till the outcome of writ petition.

Copyright Business Recorder, 2021