ISLAMABAD: Sindh High Court (SHC) has dismissed the petition, on the point of maintainability, of a leading tractor manufacturer challenging requirements of certain documents under S.R.O 563 (I)/ 2022 by the Large Taxpayer Office (LTO) Karachi for processing of its sales tax refund claims.
The SHC has heavily relied on a recent judgment of Supreme Court of Pakistan in the case of Digicom where the court disapproved directly approaching the court by short circuiting the entire legal process provided under the law.
In this regard, the SHC has issued an order against Al Ghazi Tractors Limited in the C. P. No. D-4058 of 2022.
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SHC has further declared that as to placing reliance on the judgment of Lahore High Court in Millat Tractors Limited (MTL), the same besides being persuasive and not a binding precedent, it would suffice to observe that even in that case not only a show cause notice had been issued; but so also an order had been passed by the concerned Deputy Commissioner by holding that the new SRO.563 is applicable. In the instant matter no such finding has been recorded against the present Petitioner; hence, any reliance on the said judgment is of no help, SHC order added.
It is worth mentioning that the President of Pakistan in Review Jurisdiction under Federal Tax Ombudsman Ordinance 2000, has already rejected the appeals of the FBR and (MTL) in the MTL case.
The FBR and the said company had filed representations before the President of Pakistan against orders of FTO. The FTO had given judgement in favour of farmers against the company for allegedly charging extra amount from farmers under garb of sales tax. The FBR was directed to conduct an audit of the said company.
Recently, the FTO Regional Office Karachi has also directed the LTO Lahore to complete the audit proceeding of the MTL and submit compliance report to the FTO office.
According to the order of the SHC, Having said that, it may also be of relevance to observe that for claiming refund, the Petitioner is otherwise required under the Sales Tax Act, 1990 as well as the Rules to fulfil certain requirements which are to be probed into by the concerned Department. In fact, a factual determination is to be made that whether the refund claims are otherwise admissible or not. Only then, this Court will be in a position to answer the legal question including the argument that the impugned Rules notified vide SRO 563 are applicable or not to the Petitioners case.
In view of hereinabove facts and circumstances the petition appears to have been filed prematurely; hence, we are not inclined to exercise any discretion in this matter and therefore, the same is dismissed as not maintainable.
The Petitioner (tractor company), if so advised, may respond to the impugned letter dated May 16, 2022 by raising all such legal objections as may be available and the concerned Deputy Commissioner/ Department shall proceed further, in accordance with law.
Copyright Business Recorder, 2024
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