Defiance regarding recommendations: FTO urged to exert his authority

ISLAMABAD: The Federal Tax Ombudsman (FTO) has been urged to be strict with the department when there is deliberate defiance regarding his recommendations which have attained finality and have not been contested before the president.

In an unprecedented case, a taxpayer has filed an application before the FTO for starting defiance proceedings against the concerned tax officers for not implementing the recommendations of the FTO dated 12/03/2020 as sales tax refund has not been issued.

On that, the FTO issued a hearing notice requiring the concerned Commissioner to appear on 09/05/2023 and explain the reason for non-compliance.

In compliance neither anyone from the department attended the hearing nor was any adjournment application filed. On 24/05/2023, the Registrar FTO issued a show cause for defiance. The relevant extract from the show cause notice is as under:

“And whereas by taking a lenient view you were given another chance to appear before the undersigned on 22.05.2023 at 10.00 am at FTO Secretariat Islamabad to explain the reasons for non-adherence to the FTO instructions but you did not attend the hearing nor was any explanation/adjournment received by the Secretariat.

And whereas this Secretariat has intimated and sensitized the position to the Chief Commissioner, LTO, Lahore on the telephone as well as written notice of hearing to the Chief Commissioner to depute the concerned Commissioner to attend the hearing on22/05/2023 at FTO Secretariat Islamabad but those instructions also remained un-compiled which means that you have nothing to offer in your defence.

And whereas this office is left with no option but to initiate defiance proceedings against the concerned Commissioner LTO, Lahore. You are therefore required to appear before the undersigned on 31/05/2023 at 10.30 am at FTO Secretariat Islamabad to explain the reason of non-compliance to the instructions. You are also called upon the show cause why proceedings under section 12(2) of the ordinance may not be initiated against you for defiance of FTO’s directions.

In case of failure to personally appear, furnish compliance report and written explanation on 31/05/2023 proceedings for “Defiance” under section 12(2) of the FTO Ordinance, 2000 shall be concluded without further notice.”

Once again, the concerned Commissioner did not attend the hearing on 31/05/2023 however on his telephone request hearing was adjourned without a date as Chief (Project & Refund) FBR, Islamabad assured the Registrar that the refunds will be credited to the bank account of the taxpayer within a week.

When contacted for comments, Shahid Jami, a Lahore-based tax lawyer explained that for the first time, the present FTO is a retired officer of the FBR who is probably taken lightly by the Department as evident from this case.

Copyright Business Recorder, 2023