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ISLAMABAD: The Federal Tax Ombudsman (FTO) has directed the Federal Board of Revenue (FBR) to fix specific time limit for deciding cases of Alternate Dispute Resolution Mechanism (ADRC).

In an order issued by the FTO office, the Federal Tax Ombudsman has held that failure of the FBR to pass any order on the ADRC’s Recommendations dated 17 January 2008, as per Section 195-C(4) of the Act, constitutes maladministration and has recommended to the chairman FBR to pass orders on ADRC’s Recommendations dated 17 January 2008, in the case of M/s Gadoon Synthetic Mills Ltd as per law.

The FTO has also directed the Collector, Collectorate of Customs, Islamabad, to implement the subject order and further recommended to FBR to make necessary changes in the Rules made under Section 195-C of the Customs Act 1969, giving a specific time limit by which, the board may make orders upon the recommendations of the ADRC committee.

Briefly, the complainant was engaged in the business of manufacturing of polypropylene yarn and was granted manufacturing bond license in July 1993, but was not renewed after 1995 which led to closure of the mill. The Complainant filed application dated 14.06.2006, for settlement of dispute through ADRC.

Accordingly, the FBR constituted a Committee and concluded the matter but no order was passed by the FBR for the last so many years. The Complainant filed another application dated 05.07.2019, for implementation of the ADRC’s recommendations dated 17.01.2008, but failed to evoke any response. The Complainant, therefore, filed a complaint before this Office, which was rejected for want of jurisdiction as the matter was sub juice before the Islamabad High Court and the Lahore High Court, Rawalpindi Bench.

The complainant filed representation against the FTO’s Findings, before the Hon’ble President of Pakistan, who set aside FTO’s Findings with the directions to process, enquire and deal with the complaint in accordance with the law after affording due opportunity of hearing.

The proceedings were initiated afresh. During hearing, the Complainant stated that the application was filed before the ADRC in 2006, as per Section 195-C(4) of the Act, the FBR can pass an order as it deems appropriate, but no such orders were made and communicated to the Complainant. The Complainant stated that though he had assailed two Customs references before the High Courts but the specific matter of implementation of ADRC’s recommendations raised before this Office has not been challenged in Customs Reference No2 and 9/2012.

The secretary (Judicial), FBR/DR confirmed that no order under Section 195-C(4) of the Act was passed by the FBR.

The Additional Collector, Collectorate of Customs, Islamabad/DR stated that the Collectorate had already asked FBR, vide letter dated 22.10.2020, that Board may accede to the request of the licensee to the extent of implementation of recommendations of ADRC dated 17.01.2008, however, the request for constitution of second ADRC being not only illegal but unreasonable may be declined.

Two references before IHC, Islamabad and LHC, Rawalpindi Bench, are although on the issue which has been taken up by the ADRC.

Hence FTO ordered that long standing grievance of the complaint may be attended. The FTO also recommended that the FBR may fix a specific time limit to decide such cases within reasonable timeframe in the future, the FTO added.

Copyright Business Recorder, 2022


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